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Apple Says Qualcomm Has Overcharged Billions of Dollars By 'Double-Dipping' on iPhone's Innovation
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Yes and no. Is it a free market economy? Generally, but with restrictions on certain business practices. It's been like that since the Sherman Act in 1890, actually.
As for the price they charge, they can, as long as they don't submit their product to become an industry standard. If they do want it to be a standard, they are subject to FRAND rules which severely restrict that practice. This prevents a single company from holding an industry hostage financially, or pricing out nascent competitors.
No, the most likely outcome is that after Qualcomm puts on clean underwear, they meet with Apple, beg forgiveness and agree to stop illegal practices and sign agreement per FRAND law as required.
Its not about setting their own prices. It is about FRAND licensing for essential technology patents. No smartphone can be made without a radio modem and for a very long time (until Intel recently) Qualcomm had a virtual monopoly. FRAND licensing was established to prevent technological chokepoints from holding back innovation (ie. the iPhone). The alternative is not granting licenses for core technologies, but that also diminishes innovation, because what company is going to pay millions to develop a technology that they can't guarantee they are going to make money off of. The middle ground is FRAND and this is what Apple is saying Qualcomm is violating by setting their price as a fraction of the cost of the phone as opposed to a set price for each modem and its license.
This stuff is always tricky. You know, three sides and all, but it seems like Qualcomm is violating at least the spirit of FRAND if not the actual the law.
Some have accused apple of not paying Billions in taxes.... though apple always the victim.
They would still have to license the technology the modem runs on which will bring us right back to these two lawsuits.
Apple accusing someone else of overcharging? Is this an Onion article?
Pretty cogent explanation there, Chaginxin.
However, I just wonder what would be Apple's stand if the roles were reversed.
[I always do a "role reversal" test, when there is a dispute]
Apple are making up for the money they lost from the ebook collusion class action lawsuit. Btw, claim your credits now before they expire this Saturday 6/24/2017!
https://www.inc.com/bill-murphy-jr/...-apple-lawsuit-and-it-all-expires-this-w.html
https://www.inc.com/bill-murphy-jr/...-apple-lawsuit-and-it-all-expires-this-w.html
Good, sure, whatever. As long as this doesn't raise the already high price of the iPhone for consumers.
Despite many here defending the craptastic Intel Modems that the GSM iPhone 7 has, it's seriously much worse than my 6S ever was. dropped calls, 4G instead of LTE reception are par for the course for this phone. Tried arguing with Apple to get me the Qualcomm equipped CDMA iPhone 7, but by the time I tried to get Apple to do the exchange it was too late, someone from upstairs nixed the trades that they were allowing initially for the first few months. If the iPhone 8 GSM model has the same crappy Intel radio, I'll just have to wait until the contract free phone shows up...
When your patent is a part of the "standard essential" collection, all products in that industry are required to use your patent and required to pay you the royalties, as a return, you are required to abide by a loose FRAND term -- a fair rate and be fair to all players in the industry.
Reminds me more of Brown V. Board cause if one even walked near any school they would know Ames doesn't get a cut of the dirt you dig with their brand of shovel.
It's not about making their own modem chip or not. Even if Apple made their own modem chip, they have to follow the long-established cellular standards, thus using the patents from Qualcomm (and a list of other companies), then pay royalties to Qualcomm (and all other companies that holds some industrial essential patents).
Thats not the same. You can get other mail apps for example, but apple does allow them to be set as default.
There are a lot more people feel the same as you do, unfortunately none of the existing laws can hold Apple accountable, even if you can get enough people to start a class suit against Apple. Maybe there should be an over-priced products tax law introduced.
Over its whole lifetime, Apple has only gained monopoly position in one product category -- digital music retail (i.e. iPod and iTunes). To my memory, that's also the only category of product that Apple didn't over-charge.
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Okay, so you think Cinemark is anti-competitive because it does not allow customers to bring in their own food and drinks?
No they aren't. Qualcomm's patents in question are SEP/FRAND type patents. These are special patents that are put into are particular standard. If you want to use that standard (e.g. LTE, CDMA, GSM, etc), then you must design your product to use those patents. In return for getting the patent approved, Qualcomm must offer licenses to those patent at "fair and reasonable" rates.
If Qualcomm were confident in the nature of their technology, they would not submit their tech under FRAND patents. They would then be allowed to license their patents at any price they choose, but then others would potentially be able to work around these patents.
So when Qualcomm chose to submit for FRAND patents, they get the benefit of having guaranteed customers, but that comes at the cost of not being able to charge whatever they want.
Apple's argument is 2-fold.
1. Qualcomm is basing their royalty rate based on the final cost of the end product. Apple is arguing that this is unfair and that Qualcomm's royalty should be based on the cost of the component that the patent was used for (e.g. the modem and the wifi chips).
Apple's position is that why should Qualcomm's royalties be based on other components which have nothing to do with Qualcomm's patents (e.g. screens, touchID, etc).
2. I think I read where Apple is claiming that Qualcomm is double charging for their patents. They first charge companies like Foxconn a royalty for assembling a device with an LTE chip. Then they charge Apple a royalty for selling the iPhone that was assembled with an LTE chip. To Apple, this is a double dip.
If I recall correctly, this was the same thing that Apple claimed that Samsung was pulling with some of their chips. Can't remember the outcome of that one.