Apple Paid an Estimated $5-$6 Billion to Settle Qualcomm Dispute, Plus $8-$9 Per iPhone in Royalty Fees

realtuner

macrumors 65816
Mar 8, 2019
1,404
3,658
Canada
Apple appears to have had no alternative but to settle with Qualcomm, as it had no other way to source 5G chips for its 2020 iPhone lineup.
This is a straight up lie by this analyst. Apple would have just bought Qualcomm modems regardless of who won their court case. There's no way Qualcomm would turn down billions in sales to Apple.

The purpose of this court case (from Apples point of view) is to stop the double-dipping and paying royalties based on device cost. From Qualcomms point of view the case is to allow them to keep charging the same royalty rates. Once the court decided the royalty rate, Apple and Qualcomm would be back doing business together. It doesn't matter who would have "won" the case - its purpose was just to settle the dispute over royalties.
 

realtuner

macrumors 65816
Mar 8, 2019
1,404
3,658
Canada
In other words, Charlie Demerjian was right:

"Qualcomm just pummeled Apple over patents and technology because, well, it appears the scales tipped in Qualcomm’s favor. SemiAccurate has been saying that Qualcomm would prevail and since we first started covering this suit and Apple’s tactics, and now they have. If you read our last piece on the suits it was pretty obvious that Apple was in the wrong, allegedly caught red handed, and dug the hole deeper with their petty and vindictive reactions. Qualcomm claims to have multiple emails where Apple gave sensitive trade secrets to a competitor, then refused to allow Qualcomm to exercise their contractual audit rights. While there may be some more evidence not presented publicly, it sure looks like Apple was in the wrong."

https://www.semiaccurate.com/2019/04/16/qualcomm-just-beat-apple-into-sumbission/
No, he was wrong.

That guy is a Qualcomm shill, plain and simple. Nothing he says should be taken seriously. Just look at his history of articles to see how obvious he is in support of Qualcomm.
 

adamjackson

macrumors 68000
Jul 9, 2008
1,640
2,387
If true, this means Apple has a few billion reasons a year to ace their 5G modem chips being built in house. If anything, Tim is very incentivized by saving money. This should work itself out even faster now.
 

apolloa

macrumors G5
Oct 21, 2008
12,241
7,694
Time, because it rules EVERYTHING!
This is a straight up lie by this analyst. Apple would have just bought Qualcomm modems regardless of who won their court case. There's no way Qualcomm would turn down billions in sales to Apple.

The purpose of this court case (from Apples point of view) is to stop the double-dipping and paying royalties based on device cost. From Qualcomms point of view the case is to allow them to keep charging the same royalty rates. Once the court decided the royalty rate, Apple and Qualcomm would be back doing business together. It doesn't matter who would have "won" the case - its purpose was just to settle the dispute over royalties.
Whilst these numbers are made up, what isn’t made up is the fact Apples global market share of the mobile market really isn’t that great. And that Qualcomm have as a fact not been supplying the iPhone X and XS and XR and 8 with its modems, so it’s not really lost anything it seems it can not afford to as it’s still around, happily supplying modems to the Android handsets which have the massive majority of the global market.
Whilst it’s nice for them to have Apples business, I don’t think you can claim their is no way they’d turn down Apples business.
 
Last edited:

MoreRumors?

macrumors 6502a
Feb 28, 2018
754
541
Whatever the amount it is, the settlement is done and over with. Now we can look forward and move on to next year with the 5G.
 

Intellectua1

Suspended
Jun 3, 2016
207
396
Seattle, Washington
Only if you believe liars and their made-up numbers.

There's no way Apple would settle by paying MORE than previously. They initiated this case and they had the upper hand. This analyst just caters to the anti-Apple crowd (and the stock market manipulators/stock shorters) by trying to spin this as a Qualcomm win and Apple loss.
So if these numbers are made up like you say we can expect a write up from you a bit later with the real facts, right? These people crunch these numbers for a living, if the numbers aren't 100% accurate they aren't too far off. I know it hurts but just face it, Apple didn't have the upper hand and Apple knew they would've lost, that's why they settled out. The fact that Apple lied about having talks with Qualcomm says it all. Apple will never admit failure whether it's in faulty products or legal battles because their whole model is we're perfection and we know what's right. If Apple came out on top in this you'd dang well know it.
 
Last edited:

DotCom2

macrumors 601
Feb 22, 2009
4,101
2,352
Fully expect to see a hit to Apple’s stock here.
I don't think so because Apple stock had taken a hit on rumors it would not be able to put out a 5G phone because of intel and not be able to compete. That is erased now so all is still good at Apple. In that regard anyway.
 

Rigby

macrumors 601
Aug 5, 2008
4,741
3,688
San Jose, CA
Fully expect to see a hit to Apple’s stock here.
There are two sides. On one hand Apple is paying a lot of money and higher fees now than they did before, on the other hand it'll help Apple stay competitive in the smartphone market. The investor sentiment is apparently that the positives slightly outweigh the cost, hence the very moderate stock price movement.

To answer another question in Macrumor's article: it was Apple that made the decision and Intel reacted (don't ask me how I know). Though it was bad news for Intel, they obviously knew that this was a possibility and had considered their options, so they were prepared to respond quickly. Given that Apple was the only customer for their modem chips with sufficient scale, this was really the only sensible option.
 

ryanwarsaw

macrumors 68030
Apr 7, 2007
2,517
1,964
No reason there would be. Apple’s been accruing the estimated expense and setting aside money to pay for it. There’s nothing unexpected here to cause a hit to the stock.
People don't seem to understand that Apple guaranteeing its modem supply is a good thing. For investors this offers security. If any hit is taken it will be later on if the price of these modems eat into earnings. Had Apple gone any longer and no news of where they were getting modems from was forthcoming people would have got nervous.
 

nt5672

macrumors 68000
Jun 30, 2007
1,901
3,943
It does not matter who is right and who is wrong! Apple had to settle, no matter the cost and it is at least obvious to me that Apple knew Intel was getting or wanted to get out.

Did Intel do enough to sell its IP to Apple? Is it possible to do 5G without Qualcomm patents?

Only time will tell.
 

Kenn Marks

macrumors regular
Dec 22, 2005
118
0
At least Apple isn’t paying for chips based on the cost of the phone they’re going into. It was like buying a filter for your VW but when you buy the exact same filter for your Porsche it costs 4 times the price (it’s only 2 time if you’re getting it for your Audi).
Apple should offer Intel to buy all their cellular IP especially 5G since intel won’t be using it, it could save IP Litigation in the future.
 

realtuner

macrumors 65816
Mar 8, 2019
1,404
3,658
Canada
Whilst these numbers are made up, what isn’t made up is the fact Apples global market share of the mobile market really isn’t that great. And that Qualcomm have as a fact not been supplying the iPhone X and XS and XR and 8 with its modems, so it’s not really lost anything it seems it can not afford to as it’s still around, happily supplying modems to the Android handsets which have the massive majority of the global market.
Whilst it’s nice for them to have Apples business, I don’t think you can claim their is no way they’d turn down Apples business.
Say what? Apple OWNS the premium smartphone market. That's why:

  • The App Store revenues are double that of Google Play, despite having fewer devices.
  • The average iPhone users spends 4X as much money as the average Android user.
  • In online shopping iOS users spend 5X as much as Android users.
  • In enterprise/corporate use Apple commands an 80% market share.

Qualcomm isn't going to be selling 5G modems to those billion or so $50-100 Android phones sold around the world every year. Even Samsung's latest flagship, the S10, only has 5G on the top end model while the other 3 models use 4G. 5G will be a premium-only market for the first couple years.

The last report from Counterpoint Research showed that Apple had 61% of the $600 and up smartphone market and a whopping 79% of the $800 and up market. Don't kid yourself - Apple will be selling more 5G devices than any other vendor for quite some time.
 
  • Like
Reactions: flofixer

Degerz

macrumors newbie
Apr 16, 2019
23
23
It does not matter who is right and who is wrong! Apple had to settle, no matter the cost and it is at least obvious to me that Apple knew Intel was getting or wanted to get out.

Did Intel do enough to sell its IP to Apple? Is it possible to do 5G without Qualcomm patents?

Only time will tell.
Intel currently aren't interested in selling their IP to Apple and are still looking for opportunities elsewhere ...

It's not going to be the IP that will be the stumbling block, it's going to be the implementation that's the roadblock. If a giant like Intel struggled to make 5G modems for the mobile market even with access to Qualcomm's patent then don't expect Apple to come out any faster ...
 

apolloa

macrumors G5
Oct 21, 2008
12,241
7,694
Time, because it rules EVERYTHING!
Say what? Apple OWNS the premium smartphone market. That's why:

  • The App Store revenues are double that of Google Play, despite having fewer devices.
  • The average iPhone users spends 4X as much money as the average Android user.
  • In online shopping iOS users spend 5X as much as Android users.
  • In enterprise/corporate use Apple commands an 80% market share.

Qualcomm isn't going to be selling 5G modems to those billion or so $50-100 Android phones sold around the world every year. Even Samsung's latest flagship, the S10, only has 5G on the top end model while the other 3 models use 4G. 5G will be a premium-only market for the first couple years.

The last report from Counterpoint Research showed that Apple had 61% of the $600 and up smartphone market and a whopping 79% of the $800 and up market. Don't kid yourself - Apple will be selling more 5G devices than any other vendor for quite some time.
No, you’ve selected one part of the market, the global market is just a tad different I’m afraid:

http://www.statista.com/statistics/266136/global-market-share-held-by-smartphone-operating-systems/

http://www.idc.com/promo/smartphone-market-share/os

A quick google. Apple only has 11 to 13% I’m afraid.
Qualcomm is still here, fact. Sorry to burst your rather blinkered bubble.