Feud Between Apple and Qualcomm Continues as Apple Stops Paying iPhone Royalties Completely [Updated]

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Apr 28, 2017.

  1. VulchR macrumors 68020


    Jun 8, 2009
    It seems odd that when Apple is coming out with probably the most important iPhone is years that they would choose this conflict with Qualcomm. Imagine if this delays the iPhone 8....
  2. applelover1016 macrumors regular


    Jun 12, 2013
    From what I understand, Qualcomm sells the same chip to other manufactures for 5 times less than what they charge apple. That isn't fair. Imagine your in line with a chocolate bar and so is the person in front of you. The person in front pays a dollar, but when they see it's you the cashier charges you five. You would be pissed too lol
  3. Amacfa macrumors 68000


    May 22, 2009
    What? Where is Apple charging customers 5 time more?
  4. FrenchRoasted macrumors regular

    Sep 21, 2016
    Are these patents recent? Doesn't the legal monopoly expire after 7 years? You would think phone manufacturers and mobile networks would want to get together and create an open standard for modem hardware. Legal patents or not, Qualcomm's business model seems tenuous.
  5. inscrewtable macrumors 68000


    Oct 9, 2010
    Apple are understandably jacked off with everybody from patent trolls to disgruntled users' speculative pointless class actions and now that that Qualcomm have lost their leverage this is a day that had to happen.
  6. obiwan macrumors 6502

    Jun 7, 2004
    Have you seen their RAM prices lately?
  7. kingpushup macrumors regular

    Jun 24, 2013
    Yes, not bad morality but greedy wrt ethics wrt peers in the same IP space. Exactly to your point that Qualcomm would not want to forego the product revenue, most likely anyone other than Apple would not be able to prepare itself to free its production from Qualcomm. Apple poured money and engineers into Intel projects, but who else could do this to stem the tide of Qualcomm's anti-competitive practices.

    Qualcomm just wanted to be biggest fish, but its royalty demands were unethically large compared to others in the same IP space, and Qualcomm knew they could do this because others needed to not lose its "friendly" supply.

    So they say: you get a taste of your own poison eventually, sometimes in marrying your equally ambitious type. Here clearly Qualcomm partnerer up with Apple, which is now giving Qualcomm a taste of its own poison: cant live with em, cant live without em. Qualcomm will keep supplying Apple.
  8. applelover1016 macrumors regular


    Jun 12, 2013
    In all honesty no I haven't seen ram prices lately, but it's still different it's apple's branded RAM your speaking of if i'm not mistaken. There is no alternative company selling the exact same ram for cheaper. It may house the same components, but, it isn't apple branded. I'm not agreeing with paying a premium, i'm just stating facts. Apple isn't charging customer's five times more for anything. It's their product, they choose what it sells for, we as consumer's choose whether or not to buy.
  9. shareef777 Suspended


    Jul 26, 2005
    Chicago, IL
    Simplified explanation:

    Apple pays Qualcomm a percentage of every iPhone sold.
    Average selling price of iPhone goes up based on larger screen and camera (nothing to do with Qualcomm, but they reap the benefits in royalties because of the percentage based royalties owed).
    Apple gets mad that they're paying millions extra to Qualcomm for upgrades that they had nothing to do with and sues.

    At the end of the day Apple is wrong here. They agreed to a percentage based royalty payment. They only have themselves to blame for continuing to ignore the fact that there is a large demand for larger screened phones which would drive up the ASP.
  10. obiwan macrumors 6502

    Jun 7, 2004
    Except from what I understand, Qualcomm sells the licence to Apple based on the 'Total Selling Price' of the device. So the reason they charge other manufactures 5 times less, is because their phones cost 5 times less. If Apple sold the iPhone at a much cheaper price, the licenses would not cost as much.

    It's mentioned in this article.
    --- Post Merged, Apr 28, 2017 ---
    Ok fair point.

    Apple agreed to pay a percentage in royalties to Qualcomm, now they've gone back on their word.
  11. applelover1016 macrumors regular


    Jun 12, 2013
    I didn't see this, all in all I still don't agree, you should pay to use the tech and that's it. But if apple signed it they have to abide by it. Simple as that.
  12. samcraig macrumors P6

    Jun 22, 2009
  13. Xgm541 macrumors 65816

    May 3, 2011
    Wait are you sure? I'm pretty sure the OEM is the reason android isn't updated, not Qualcomm. Can you explain what blobs are?
  14. Michaelgtrusa macrumors 604

    Oct 13, 2008
    Then stop selling Apple modems until it's resolved, that would send a message.
  15. techwhiz macrumors 6502a

    Feb 22, 2010
    Northern Ca.
    As long as you get what you paid for at the price you both agreed, I don't see the issue.

    What the other guy pays is not your negotiation.
    If they wanted those kind of terms, they should have said in the contract that they wanted lowest price/percentage royalty.

    They negotiated poorly when Qualcomm was the o ly game in town, now they want a price change.

    They are playing a dangerous game and by refusing payments, they are now in breach. They are also possibly guilty of business interference by not paying the pass through to those companies that collect the royalties.

    I can see Apple slapped with an injunction or Qualcomm refuse to give them chips while in breach.

    Apple should have made payment into an escrow account pending litigation outcome. Completely withholding payment puts them on the wrong end of the law.

    Big league poker. Let's see who blinks and bluffs.
  16. Rob_2811 macrumors 68000

    Mar 18, 2016
    United Kingdom
    Well its good to see you've taken a balanced view. Pushing their own proprietary nonsense aswell we know how Apple hates that kind of thing.
  17. atomic.flip macrumors regular


    Dec 7, 2008
    Orange County, CA
    Qualcomm doesn't sell chips or chipsets directly. They design them. Various manufacturers then license their design and manufacture chips and sell direct to companies like Apple etc.

    The fact Qualcomm survives "exclusively" off its intellectual property and Apple is saying they will refuse to pay for the cost of royalties to manufacturers is beyond shameful. I don't know what is going on with Apple these days. The more time passes the less I recognize this company.

    Also, Apple inciting this sort of behavior on the part of chip suppliers (to not pay royalties in order to drive down the price of their supplies) is illegal in just about every nation in the world. Just so happens it's also the least well regulated and enforced in China (where most fabs are).
  18. mi7chy macrumors 603


    Oct 24, 2014
    Rather odd that the licensing agreement hasn't been an issue since 2007 until now. Perhaps there's a bigger issue such as Apple overspending on the spaceship building and/or phone sales has tanked so they have run out of money to pay their bill. Doesn't send a positive message to other suppliers when Apple can pull the same stunt with them.
  19. lazard macrumors 68000

    Jul 23, 2012
    Of course, at that time Apple planned to keep on making 3.5" screen iphones in perpetuity, until Samsung made large screens popular.
  20. agsystems macrumors 6502a

    Aug 1, 2013
    that solution is called the Intel XMM7560 "it offers download speeds of 1Gbps and upload speeds of 225Mbps. It supports up to 8×4 MIMO, up to 35 LTE bands, and all of the current evolutions of LTE, GSM, and CDMA" - bye bye Qualcomm

  21. ryanwarsaw macrumors 68020


    Apr 7, 2007
    Does Apple make it's own RAM? I am not sure this argument makes sense. AFAIK there is no such thing as Apple branded RAM. Same with storage. If you look inside I think you will find it to be Samsung or whoever. I could be wrong but if you look at the RAM inside a computer it won't have an Apple sticker on it.

    I would say Apple maybe Apple uses it's brand to sell RAM at a premium. The brand distinction is the Apple logo on the outside. This is what accounts for the premium. Most of what is inside I think is random parts from various manufacturers. The end result and sum of them working together is what accounts for the premiums charged.

    Correct me if I am wrong.
  22. MikeFromTexas macrumors member

    Apr 30, 2010
    Seems to me that this is a contract issue, not a "fairness" issue.

    If Apple owes the money under contract they should pay it. Be more careful of the contract terms you agree to in the future.
  23. applelover1016, Apr 28, 2017
    Last edited: Apr 28, 2017

    applelover1016 macrumors regular


    Jun 12, 2013

    That was literally my argument lol. Your paying a premium, but the person I was quoting was saying apple charges the user 5 times more. The little apple sticker on the ram is them branding it. You won't see that branding anywhere else but in an apple computer. Therefore, his argument wasn't valid. These chips are identical in every way AFAIK. The only difference is that because apples phones cost more, qualcomm charges more, which isn't fair. but as I stated earlier, If apple knew all of this going in and still signed then yes they should be obligated to pay because they made the agreement, However, just because they signed doesn't mean it's right.

    And if they don't brand the ram in the mac book, that makes his argument make even less sense who cares what apple charges for the ram, they aren't even making or branding it.
  24. ackmondual macrumors 65816


    Dec 23, 2014
    U.S.A., Earth
    Both companies need to "pull up their big boy pants".
  25. ryanwarsaw macrumors 68020


    Apr 7, 2007
    I didn't think the RAM inside an Apple computer had and Apple sticker on it?

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