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

[Tigger11]

The original agreement was 7.50 a phone, once that went away, Qualcomm wanted to start charging Apple like everyone else, based on the price of the phone, so you add, 64Meg to the phone, charge 100 more retail and Qualcomm gets a bigger check, thats what the entire argument is about, the more expensive the phone the more money Qualcomm gets. If we have 2 phones with the same chip and the same software being put into them and one is a 200 phone and one is 1000 phone, Qualcomm gets 5x the money for the 1000 phone, while adding nothing to the phones value over the 200 phone. Now we have an agreement that once again has a fixed amount per phone, its larger then the 2011 number, but it also has 5G support, and they paid the back royalties, which even if we agree that the number here is correct still only amounted to less then 30 days of last quarters profit, or less the 1/40 of the cash on hand, and now Apple has Qualcomm parts for 2020 with a 5G license and no Qualcomm issues for 8 years, thats going to make the stock market go up on Apple and Qualcomm, not down.
-Tig

 

[jamezr]

Waiting for you to provide the details of the settlement to back your claim.

Did you not read the article that started this thread?
Apple Paid an Estimated $5-$6 Billion to Settle Qualcomm Dispute, Plus $8-$9 Per iPhone in Royalty Fees

Qualcomm may also be receiving between $8 and $9 per iPhone from Apple in ongoing patent royalties, a figure calculated based on guidance numbers that Qualcomm provided following the settlement. Qualcomm said that it expects its earnings per share to increase by $2.

Apple previously paid $7.50 in royalties, so at $8 to $9 per iPhone, Apple would be shelling out more cash than it did before.

 

[Baymowe335]

I agree, it's always the usual suspects as well.

You mean just as the usual suspects declare it a QCOM win without knowing because they are the typical Apple naysayers? This analysts has no more facts than anyone else.

We don't know the terms...we are speculating.

Apple didn't get to a near $1T valuation because they don't know how to manage a business, protect IP, source product, and be good managers in general. Acting like they are somehow a blind leading the blind company is completely absurd.

 

[H2SO4]

I think the years of this “partnership” would be pretty much numbered. Apple is only paying for some more time to develop its own modem.

Assuming their modems don't require Qualcomm patents, (or anybody elses).
[doublepost=1555623178][/doublepost]

You mean just as the usual suspects declare it a QCOM win without knowing because they are the typical Apple naysayers? This analysts has no more facts than anyone else.

We don't know the terms...we are speculating.

Apple didn't get to a near $1T valuation because they don't know how to manage a business, protect IP, dodge taxes, source product, and be good managers in general. Acting like they are somehow a blind leading the blind company is completely absurd.

You forgot one, so I added it for you.

 

[digitalexplr]

Enough already with the headlines-as-fact when it clearly isn’t, what are you trying to accomplish by doing this?

Click-bait. Not much else.

 

[realtuner]

Did you not read the article that started this thread?
Apple Paid an Estimated $5-$6 Billion to Settle Qualcomm Dispute, Plus $8-$9 Per iPhone in Royalty Fees

And where does it say the author of this had any inside knowledge of the settlement?

It doesn't. It's nothing more than a guess.
[doublepost=1555623563][/doublepost]

Can you post a link for this?

Sure. Which part? Or should I post 50 links?

 

[Baymowe335]

Assuming their modems don't require Qualcomm patents, (or anybody elses).
[doublepost=1555623178][/doublepost]
You forgot one, so I added it for you.

Apple has a responsibility to manage their business AND optimize taxation. The fact they take advantage of the tax law doesn't mean they don't follow the law. Every business does it. If you don't like it, write you congressman to change the law.

Why would you pay more than you have to?

Also, Apple didn't get their valuation by dodging taxes. They still pay more taxes than any other entity in the world.

 

[jamezr]

And where does it say the author of this had any inside knowledge of the settlement?

It doesn't. It's nothing more than a guess.
[doublepost=1555623563][/doublepost]

Ohhhhh....so it's your position that article that disagrees with your POV is guessing or lying....but YOUR POV is fact.... Got it

 

[paul4339]

I dont think it was a bad deal for either side:

• Qualcomm gets the royalties ($5-6B) that it was owed and was being withheld by Apple. QCOM itself said that Apple owes it $7B.
• The 2011 rates Qualcomm charged Apple $7.50 (2011) but by 2013 it wanted raise it to $17-$18 (court testimony).

They settled on at 6 year contract for $8-9 per device (2019-2025)... not bad for either party.

• QCOM got most of the suspended money that it was owed and significant stock bump.
• Apple got decent rates comparable to 2011 and saved $1-$2B.

Also, to my knowledge this doesn't extend to other smartphone manufacturers, who will can/will probably be charged alot more (which benefits both Apple and QCOM).

 

[H2SO4]

Apple has a responsibility to manage their business AND optimize taxation. The fact they take advantage of the tax law doesn't mean they don't follow the law. Every business does it. If you don't like it, write you congressman to change the law.

Why would you pay more than you have to?

Also, Apple didn't get their valuation by dodging taxes. They still pay more taxes than any other entity in the world.

They have an obligation to follow both the spirit and the letter of the law, if a deal stinks, (like Ireland), don't do it. They should be paying more.
I'm still stunned that people applaud companies for dodging tax. Tax that pays for the public services that protect them. Who cares if they pay more. Pay what is due. End of.

 

[DarrenSW]

I suspect Apple has bought Intel's 5G modem development IP. I sure as Hell would in their position.

 

[Bistroengine]

If Apple builds their own modem chip I'm guessing they would have to license all the patents currently owned by other chip makers.

However, I wonder if they could get around this by building an end-to-end encrypted modem and place it in the secure enclave chip.

This way all your phone calls would be encrypted and private.

 

[Defthand]

Assuming the cost of Qualcomm's modem chip is no more than $50, why would Apple bother to create its own? Considering the overall price of a phone, it's a small cost for something that is essential for a phone's usefulness.

 

[Mr. Dee]

They'll make that back in no time.

 

[tridley68]

So look forward to the 2020 I phones cost going up to cover the cost of this snafu.

 

[torana355]

WOW.

You're trying to argue Ford makes more cars than Ferrari therefore they have a higher market share than Ferrari when the only thing you can compare between the two companies is how many Ford GTs get sold vs Ferrari (the only car Ford makes that's in the SAME market).

Then again, this doesn't surprise me. Android fans always like to trot out the market share argument while ignoring market segments (apples to apples, oranges to oranges). Apple doesn't make $50-100 phones. Most Android phones sold worldwide are sub $100 junk phones.

You are speculating that mid tier android phones won't have 5g which is no more credible then the figures quoted in the linked article. I think we need to wait and see how it all pans out before making hasty judgements.

 

[realtuner]

You are speculating that mid tier android phones won't have 5g which is no more credible then the figures quoted in the linked article. I think we need to wait and see how it all pans out before making hasty judgements.

Not for some time they won't. Even Samsung's newest S10 only offered 5G on the top-end model, while the other 3 models (S10e, S10 and S10+). If Samsung can't even outfit their flagship devices with 5G art launch, what make syou think they're going to do it with their mid-range or low-end phones?

 

[TheShadowKnows!]

R.E.L.A.X. This is not a sporting contest. It is simply business.

Qualcomm had the goods.
Apple simply had no place else to turn for 5G-domain technology:

iNTEL, a poor, non-starter.
Huawei, would have been inviting the fox to the henhouse.​

Meanwhile, the known Apple acolytes in here claimed that delivering 5G functionality by the end of this decade would not matter...that Qualcomm was going to be skinned naked... blah, blah, blah.

Well, Apple decided not to test their blind faith.
And, made the deal.

Just business. And, not a sporting event.

 

[ChpTrk]

Nothing yet so far up strongly since yesterday. Time for Apple to maybe make their own modems in the future. I am sure there is a nice acquisition out there somewhere.

Just buy Qualcomm.

 

[Carnegie]

So look forward to the 2020 I phones cost going up to cover the cost of this snafu.

Why would iPhone prices go up because of this? Apple always expected to pay Qualcomm for its IP. It was just a matter of getting to a point where Qualcomm was willing to agree to something reasonable and wouldn’t require Apple to agree to onerous conditions. Apple has, according to it, long wanted a direct licensing agreement with Qualcomm, the parties just hadn’t been able to agree on terms previously.

As for the one-time payment, Apple has been accounting for what it expected to end up paying for back royalties. If what was agreed to is dramatically higher than what it expected, then we should get indication of that soon enough. Apple will have to account for the difference in its financial reporting.

 

[realtuner]

Ohhhhh....so it's your position that article that disagrees with your POV is guessing or lying....but YOUR POV is fact.... Got it

No, my position is that the analyst has no inside information at all, and is simply guessing at what the settlement entails.

It seems all the Apple naysayers want to throw common sense and logic out the window and accept anything bad they hear about Apple as the gospel truth.

 

[DynaFXD]

Well, they needed something to do with all that repatriated offshore money. A fly on a horse's butt and all that....

 

[jamezr]

No, my position is that the analyst has no inside information at all, and is simply guessing at what the settlement entails.

It seems all the Apple naysayers want to throw common sense and logic out the window and accept anything bad they hear about Apple as the gospel truth.

or...even the opposite happens sometimes....some will defend Apple to the death...well...just because...and throw common sense and logic out the window and refuse accept anything negative they hear about Apple..

 

[Kierkegaarden]

If they conservatively invested that money, I think a 5% return would be reasonable (about $500M) — but what if they held back the $6B and put it all into their own stock when it hit a low of $142? They would then have made about $2.5B! Fun to imagine.

 

[JRobinsonJr]

Exactly if there is enough money in it there will be the ambition to do so.

Profit brings competition... excessive profit brings ruinous competition!