Apple Says Qualcomm Has Overcharged Billions of Dollars By 'Double-Dipping' on iPhone's Innovation

[Michael Goff]

I think you're overstating what he wishes to be able to do.

He's not asking hardware companies to support other OSes. He's simply asking that they don't deliberately block them.

Except to be able to install another OS, the other OS would have to support the hardware. Do you not know how an OS works?

 

[kdarling]

Except to be able to install another OS, the other OS would have to support the hardware. Do you not know how an OS works?

Heh. Those here who know my past will find that question to be quite amusing. In short, yes, I'm very aware of how an OS works

But again, I don't think he's asking for OSes to automatically work, either. He just doesn't want porting attempts blocked.

 

[Michael Goff]

Heh. Those here who know my past will find that question to be quite amusing. In short, yes, I'm very aware of how an OS works

But again, I don't think he's asking for OSes to automatically work, either. He just doesn't want porting attempts blocked.

So I guess you’d like Apple to provide the drivers for their AX series and anything else they make on their own?

 

[kdarling]

So I guess you’d like Apple to provide the drivers for their AX series and anything else they make on their own?

Nope. You're still assuming way too much, methinks

Granted, chip documentation would be handy so anyone could more easily write their own drivers for the OS of their choice. But even that's not strictly necessary, since you can disassemble the stock OS and figure all that out.

Been there, done that, more than once.

 

[Feenician]

I think you're overstating what he wishes to be able to do.

He's not asking hardware companies to support other OSes. He's simply asking that they don't deliberately block them.

Nope. You're still assuming way too much, methinks

Granted, chip documentation would be handy so anyone could more easily write their own drivers for the OS of their choice. But even that's not strictly necessary, since you can disassemble the stock OS and figure all that out.

Been there, done that, more than once.

What are Apple doing to actively prevent such a thing? Genuine question, no snark, since I do recall you’ve worked on such things.

 

[tooltalk]

You must not have read very carefully. I said, in general, you can charge whatever the market will bear, and that's true if you understand the law in this area of patents and anti-trust. It's clear that you don't, so you are letting your hatred of Apple blind you to basic facts. The issue in this particular case revolves primarily around FRAND, which is again, primarily a contract issue. As one analyst noted

"In addition, a royalty base premised on final selling prices means that Qualcomm charges manufacturers of high-value, feature-rich smartphones substantially more for a license than it charges manufacturers of basic cellphones, despite the fact that the embodied wireless communications functionality in the two products is similar or identical. This is inconsistent with the FRAND promise. Compared to a $100 Kyocera LTE smartphone, Apple estimates that its royalty payment for a $400 iPhone SE is "four to nine times more than Kyocera's royalty for its smartphone." That also means Qualcomm collects more when customers pay as much as $200 more for increased storage capacity, a feature that has nothing to do with cellular connectivity."

Qualcomm is in a lot of trouble. You may wish away the facts, but the FTC is suing them for this practice. The Korean government already found them in violation and fined them almost a billion dollars.

Sure, but your incoherent rant isn't helping Apple's case here.

 

[Michael Goff]

What are Apple doing to actively prevent such a thing? Genuine question, no snark, since I do recall you’ve worked on such things.

The boot loader is locked, and they’d likely sue anyone that would reverse engineer their drivers.

 

[Feenician]

they’d likely sue anyone that would reverse engineer their drivers.

I seem to recall a good few years ago there was succesful attempt to get android booting on iphones. was anyone sued?

 

[Michael Goff]

I seem to recall a good few years ago there was succesful attempt to get android booting on iphones. was anyone sued?

I have no idea what you're talking about.

 

[Feenician]

I have no idea what you're talking about.

Android iBoot is what you want to search.

 

[KeanosMagicHat]

I can't see how Apple can now turn round and accuse Qualcomm of double dipping when they willingly signed a contract which has been running for some time now.

Every business relationship over time involves some kind of contract renegotiation.

It's a shame that with all the employees Apple have they feel the need to resort to court action to achieve this aim.

Surely with skilled negotiators this could've been avoided?

I hope Qualcomm doesn't go a similar way to Imagination as a result of all this because competition for components for iPhones is good for customers (and for Apple) to keep overall prices in line and to maintain ongoing innovation.
[doublepost=1498210674][/doublepost]

"Oh it's Apple. They're wrong because I hate everything Apple does. What a hypocrite company."

Said no one who is educated in the matters.

I agree and would add that a similarly incorrect viewpoint is the other extreme of just blindly praising Apple for everything they do.

I'm not for one minute suggesting you personally are in this camp, but there are many on this forum that are and as a consequence, cannot take a view on each situation by its own merits.

 

[TechGeek76]

Sure, but your incoherent rant isn't helping Apple's case here.

It's simply astounding and ironic people like him say stuff like this "so you are letting your hatred of Apple blind you to basic facts. " when he blindly defends Apple no matter what.

 

[kdarling]

... As one analyst noted
"... That also means Qualcomm collects more when customers pay as much as $200 more for increased storage capacity, a feature that has nothing to do with cellular connectivity."

Yep, unless Foxconn's license has an exemption for memory (which it might), they (and thus Apple) would pay Qualcomm an extra ~ $1.53 in royalties for a $47 memory increase that Apple charges its customers $200 extra for. Coincidentally, that's an extra $153 in profit, or 100 times the amount of the extra license fee.

Poor, poor Apple. How did they ever get to a quarter trillion dollars in pure stashed profit with such a horrible burden? Oh, that's right. By selling a phone with 3G/4G courtesy of companies like Qualcomm.

It's hard to be sympathetic to either company, frankly. They're both quite wealthy. Of course, if Apple disappeared tomorrow, we'd still have plenty of smartphones to choose from, and we'd still have 5G coming, courtesy of companies like Qualcomm.

I can't see how Apple can now turn round and accuse Qualcomm of double dipping when they willingly signed a contract which has been running for some time now.

My question is, how can they accuse them of double dipping at all?

Qualcomm's license is not with the modem chipmaker. It's with the phone OEM. So Apple (I mean, Foxconn) is NOT paying twice for that IP.

This is just Apple lawyers handwaving like crazy, hoping to twist the royalty base away from the device to relatively cheap chips.

But as one court has noted, basing an IP royalty off the cost of a chip that uses it, is like saying a book is only worth as much as its paper and binding.

 

[Michaelgtrusa]

Who is the real threat here?

 

[Michael Goff]

Who is the real threat here?

Qualcomm is worse than Apple on this one. I mean, Apple just wants money but seems to have given up on killing Android. Qualcomm is abusing their parents to keep Snapdragon relevant.

This case isn't about that, but it's still relevant to me.

 

[kdarling]

Qualcomm is worse than Apple on this one. I mean, Apple just wants money but seems to have given up on killing Android. Qualcomm is abusing their parents to keep Snapdragon relevant.

Umm, can you please explain how? Since they don't charge anyone any differently for using different modems?

Remember, Foxconn and some of the other OEM factories had IP licenses with Qualcomm for years before Apple ever came out with a phone.

It didn't matter whose phones Foxconn was making all that time, or even whose modem chip was being used all that time. (And it often wasn't Qualcomm's.) The license rate was all the same.

Moreover, the rate didn't change when Apple came along. No doubt Apple loved the heck out of that, as Foxconn was only paying based on the relatively small amount that they charge Apple for a ready-to-sell device... instead of Apple having to get their own license and pay based on the full wholesale or retail price like some other makers do.

The upshot is, if Apple pays a lower rate, all that happens is that their offshore accounts will simply get richer. Which means Qualcomm gets a lower rate, thus they have less incentive to pour billions into the R&D that has given us 3G/4G/5G. So a lower rate does not seem beneficial to the user, especially since the current method allows even $40 smartphones with a $4 profit margin to exist... thus benefiting the world at large.

 

[Michael Goff]

Umm, can you please explain how? Since they don't charge anyone any differently for using different modems?

Remember, Foxconn and some of the other OEM factories had IP licenses with Qualcomm for years before Apple ever came out with a phone.

It didn't matter whose phones Foxconn was making all that time, or even whose modem chip was being used all that time. (And it often wasn't Qualcomm's.) The license rate was all the same.

Moreover, the rate didn't change when Apple came along. No doubt Apple loved the heck out of that, as Foxconn was only paying based on the relatively small amount that they charge Apple for a ready-to-sell device... instead of Apple having to get their own license and pay based on the full wholesale or retail price like some other makers do.

The upshot is, if Apple pays a lower rate, all that happens is that their offshore accounts will simply get richer. Which means Qualcomm gets a lower rate, thus they have less incentive to pour billions into the R&D that has given us 3G/4G/5G. So a lower rate does not seem beneficial to the user, especially since the current method allows even $40 smartphones with a $4 profit margin to exist... thus benefiting the world at large.

“Despite having requested a license from Qualcomm, Samsung cannot sell licensed Exynos chipsets to non-Samsung entities because Qualcomm has refused to license Samsung to make and sell licensed chipsets,” Samsung said in its brief, calling Qualcomm’s actions “exclusionary.”

www.theverge.com/platform/amp/2017/5/15/15640498/samsung-intel-back-ftc-lawsuit-qualcomm

 

[Michaelgtrusa]

Sounds a lot like QC is standing up to giants.

 

[Michael Goff]

Sounds a lot like QC is standing up to giants.

Only if you don't know the facts, then you'd realize QC is a shady company that does shady things.

 

[TechGeek76]

Only if you don't know the facts, then you'd realize QC is a shady company that does shady things.

Because you are privy to the actual facts yourself? No? Didn't think so.

 

[Michaelgtrusa]

Only if you don't know the facts, then you'd realize QC is a shady company that does shady things.

All of the are. Apple sold Apple care to customers in Italy that didn't need it got caught and continued to sell it.
[doublepost=1498245276][/doublepost]

Only if you don't know the facts, then you'd realize QC is a shady company that does shady things.

I've been watching this for months and in some cases years, you're assuming that I don't know the facts.

 

[Michael Goff]

Because you are privy to the actual facts yourself? No? Didn't think so.

I can do a basic amount of research.

All of the are. Apple sold Apple care to customers in Italy that didn't need it got caught and continued to sell it.
[doublepost=1498245276][/doublepost]
I've been watching this for months and in some cases years, you're assuming that I don't know the facts.

I don't know who you are, what threads you've read, what your education level in the area is, what any biases are, and how interested you are in the subject. Of course I'm assuming things.

As for Apple being shady, that is true. But QC is doing shady things right now that is having a negative effect on the entire industry.

 

[kdarling]

“Despite having requested a license from Qualcomm, Samsung cannot sell licensed Exynos chipsets to non-Samsung entities because Qualcomm has refused to license Samsung to make and sell licensed chipsets,” Samsung said in its brief, calling Qualcomm’s actions “exclusionary.”

All the quote above means, is that since Qualcomm only licenses OEMs, then there is no such thing as a "pre-licensed Exynos chipset" for Samsung to sell to OEMs.(*)

BUT that does NOT mean that Samsung cannot sell Exynos processors. On the contrary, Meizu is well known for using the Samsung Exynos 8890 APU with integrated modem instead of a Qualcomm Snapdragon.

Moreover, MediaTek is already the second-largest maker of LTE modems, according to Strategy Analytics. Until 2013 Qualcomm controlled 95% of the market. But by 2016 its share was down to 66%, with MediaTek next at 17% and growing like crazy in China.

----

Charging the OEM is no different than the way that Apple pays Nokia and others royalties for celluar IP. What confuses things is the fact that Qualcomm also sells their own chips, which are licensed the exact same way as anyone else's... by the OEM only.

(*) Likewise, would Apple allow the maker of a chip that could be used for MFi (made for iPod) products, to be the ones to license and collect royalties for the end MFi product maker? Heck no. Apple will only sell licenses to an OEM.

Speaking of MFi, remember the original MFi license fee? $10 or 10% of the product's retail price, whichever was higher.

 

[Michael Goff]

The clever wording Samsung used is what has confused people.

All the quote above means, is that since Qualcomm only licenses OEMs, then there is no such thing as a "pre-licensed Exynos chipset" for Samsung to sell to OEMs. (*)

Of course, that does NOT mean that Samsung cannot sell Exynos processors. In fact, Meizu is well known for using the Samsung Exynos 8890 APU with integrated modem instead of a Qualcomm Snapdragon.

No matter if Huawei uses a MediaTek chip, Meizu a Samsung chip, or Foxconn uses either a Qualcomm or Intel chip in an iPhone... they all pay Qualcomm the same basic rate for using Qualcomm's IP.

Speaking of which, MediaTek is already the second-largest maker of LTE modems, according to Strategy Analytics. Until 2013 Qualcomm controlled 95% of the market. But by 2016 its share was down to 66%, with MediaTek next at 17%.

Folks this is no different than the way that Apple pays Nokia and others royalties for celluar IP. What confuses people is the fact that Qualcomm also sells their own chips, which are licensed the same way as anyone else's.

(*) A chipmaker would not know how much the OEM device is going to cost, so it makes no sense for them to try to retroactively collect royalties to pass onto Qualcomm. In fact, when it used to be done that way, all that happened was that chipmakers often "forgot" to collect or audit the OEM royalties.

And yet nobody sells in the US when it comes to Exynos.

 

[macTW]

Yep, unless Foxconn's license has an exemption for memory (which it might), they (and thus Apple) would pay Qualcomm an extra ~ $1.53 in royalties for a $47 memory increase that Apple charges its customers $200 extra for. Coincidentally, that's an extra $153 in profit, or 100 times the amount of the extra license fee.

Poor, poor Apple. How did they ever get to a quarter trillion dollars in pure stashed profit with such a horrible burden? Oh, that's right. By selling a phone with 3G/4G courtesy of companies like Qualcomm.

It's hard to be sympathetic to either company, frankly. They're both quite wealthy. Of course, if Apple disappeared tomorrow, we'd still have plenty of smartphones to choose from, and we'd still have 5G coming, courtesy of companies like Qualcomm.



My question is, how can they accuse them of double dipping at all?

Qualcomm's license is not with the modem chipmaker. It's with the phone OEM. So Apple (I mean, Foxconn) is NOT paying twice for that IP.

This is just Apple lawyers handwaving like crazy, hoping to twist the royalty base away from the device to relatively cheap chips.

But as one court has noted, basing an IP royalty off the cost of a chip that uses it, is like saying a book is only worth as much as its paper and binding.

So because apple has made a lot of money, they should lose this case...?

A case, if you actually look at and read, that they legitimately have reason to file.