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Say my neighbor and I both build devices with a Qualcomm LTE chip. His device sells for $100, my device sells for $1000. Why should Qualcomm get more $$ per device on mine when their chip is being used for the same function in both, which is LTE connectivity?

For a reason similar to why Apple gets 30% of every app in their store, even though storing and serving a $1000 app costs them no more than for a $1 app. Why doesn't Apple charge a flat distribution fee of $20, or whatever their server cost is?

Answer: partly because the higher priced devices / apps subsidize the lower cost devices / (free) apps, the latter of which could not possibly pay the desired fee. As I mentioned, a $40 phone that gives $4 in profit to the manufacturer, cannot afford a $20 royalty fee, whereas a $700 phone making $300 in profit certainly can.

Plus the expensive device / app makers benefit from all the cheaper phones / apps creating a larger infrastructure and future market.

To take it further, let say my neighbor across the street builds something that costs $10,000,000 with their LTE chip. Again, that's ludicrous that they get a cut of the $10,000,000 machine that has a $5 LTE chip in it.

Ah, I see. Good Q. There's a self-imposed maximum to prevent unfairly huge fees. For example, most LTE patents besides Qualcomm's and probably LG's, have been grouped together and even though their total percentage could be much higher, their fee is capped at $10 for even the most expensive device in the world.

To me what the industry is doing would be like Home Depot charging more $$ for 2 x 4 lumber just because it's being used in a more expensive house.

Not an accurate analogy, as the lumber (chip) is not being charged more for individually. Also, builders don't charge a set fee for any house. They charge a percentage on top of the cost of the house.

Wrong. The more money Apple makes the more they are charging for their licenses also that other companies pay less.

Except not really, since Apple reportedly only pays Qualcomm based on the price of the iPhone that Apple pays Foxconn... about $250. That cost hasn't changed a lot in ten years.

Also this isn't just Apple suing them it's a group of companies and government agencies. Nokia tried this multiple times and failed.

What is it that you think Nokia tried and failed at? Certainly not charging a percentage, because that's how major cellular patents are licensed. For example, for LTE, the starting negotiation prices are:

etsi_royalty_rates.png


Few companies pay the full starting percentage, because almost all of them cross license in order to reduce the fee. (Nokia is said to be so cross licensed that they pay virtually nothing.)

The reason why Apple wants to change this decades old practice, is because they understandably don't want to cross license to get lower fees. They just want the lower fees. Which is not fair to the other companies who gave up more.
 
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Does every MacRumors story have to suffer this same 'popcorn' forum cliché? What does it mean, really? That you're going to sit back and enjoy reading argumentative squabbles over semantics and irrelevance? Like going to the cinema and eating popcorn? It doesn't even make sense!

As I have not counted the number of uses, it's my first time using it, and I have not read every comment in every story, I cannot substantiate your claim that 'every' MacRumors story forum entry contains it.

Sorry you found it confusing and/or offensive...

Peace!
 
The timing of this is suspicious. Very likely a distraction and finger pointing for upcoming earnings release surprise.
 
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Apple will never see a dime unfortunately, but that's our justice system for you.
Qualcomm will file appeal after appeal before writing a check to Apple for $1 billion. It's a matter of public image and opinion in their eyes, not just money. If they fold on Apple, every other manufacturer that licenses their patents will take them as a joke. In the wake of their 5G cellular modem, that might be major.
 
Great post.
But Apple have such a gigantic war chest off shore I dont know -$150B is it.
They need to use some of that money to buy component suppliers.
Tim Cook surely now realises that the Beats purchase of the massive headphones that US Basket ball players were seen wearing 3 years ago and that will be 'out of fashion' in 2 years, with the bolt on beats music was the 2nd worst investment in Corporate history.
@$5.3B

esp. with apple going their 'normal' minimalist 'airPods' route.

We live, we learn, hopefully Apple HQ have learned and they will aim their 'war chest' as great value investments and buy out component suppliers.

Assuming all this from OP press statement is not to garner press attention.

Sueing suppliers
I wouldn't expect the same level of service if I sued a supplier.
I'd expect - delays in delivery, phone calls not answered, e-mails not answered, mis-priced invoices, curt response to Head Office etc

This can not go on, Apple are too reliant on iPhone to be sueing iPhone suppliers again and again, a la - Samsung.
What are you talking about, seriously? This is so wrong and misinformation.

Apple paid a mere $3B for beats, not $5B, and it isn’t close to the worst investment in corporate history. It was actually quite a good purchase.

Do you have an idea how many bad deals have been made? HP paid over $11B for Autonomy, only to later write off $9B of that value.

Exxon bought XTO for $41B and basically got nothing out of it.

TXU was taken private for $46B and went bankrupt.

The Beats story is still going and I’d bet Apple has at least broken even on the hardware and launched what is almost all margin, Apple Music.
 
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