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. kdarling macrumors P6

    kdarling

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    #101
    Apple has spent years doing this.

    Think back to their complaints and lawsuits about Motorola's rates. I'm not sure Apple ever paid them. Too bad, it might've kept Moto a US company.

    Apple did the same to Nokia, who then sued them in Delaware for a jury trial. Apple, not having the advantage of a home California jury, saw the light and settled out of court.

    Mind you, it's considered normal to do this for a short while (using ETSI FRAND patents until a deal is made). But Apple's lawyers have turned it into a delay art form. After all, the worst case is they pay back royalties after denying funds to their patent holding competitors for years. The best case is, they find a sympathetic court which sets a much lower rate.
     
  2. apolloa macrumors G4

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    #102
    I think some on here are qualified. But it's common sense when you have an on going court case to know you can't take matters into your own hands like Apple has, Apples history is to screw everyone over to maximise their own greed.
    --- Post Merged, Apr 28, 2017 ---
    Apples business model is literally to screw everyone over, and they seem for the most part to get away with it until they are taken to courts outside the US, they they suddenly settle. It's stinks of corruption shown towards foreign companies. And no one cares so long as money is thrown around.
    The Ericsson case was the worst perfect example of how big Apples arrogance is when they tried this model on them.
     
  3. Razeus macrumors 603

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    #103
    All I know is that had better be sorted out before iPhone 8. I refused to use inferior technology and will only use a device with Qualcomm tech.

    I'm long Qualcomm so I'm highly interested in how this turns out in more ways that one. QCOM's royalty scheme is flat out genius.
     
  4. ryanwarsaw macrumors 68020

    ryanwarsaw

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    #104
    I give up. You win.
     
  5. ani4ani macrumors 6502a

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    #105
    Most of the agreements are for a % of the phones selling price, so if Apple wants to sell the most expensive phone.....I get it that Apple realise that wasn't a great deal to have signed, but hey that's the agreement they have.
     
  6. tooltalk macrumors 6502

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    #106
    No, There is absolutely zero evidence that Apple is paying 5 x other customers with the same terms and conditions. Apple has made accusations like this before without a shred of evidence -- eg, USITC case against Samsung where Samsung provided over 30+ contracts involving varying prices, cross-licensing, etc to contradict Apple's baseless accusation and Apple provided zero to support their claim.
     
  7. kdarling, Apr 28, 2017
    Last edited: Apr 28, 2017

    kdarling macrumors P6

    kdarling

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    #107
    Nope, you misunderstood, just as Apple's PR department no doubt hoped you would.

    Qualcomm charges everyone a higher rate than other patent holders do, that's what Apple meant.

    But ironically, Apple pays less to Qualcomm than some others. See post #96:

    Feud Between Apple and Qualcomm Continues as Apple Stops Paying iPhone Royalties Completely [Updated]
     
  8. ani4ani macrumors 6502a

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    #108
    It is when it has the same modem chip in it
     
  9. tongxinshe macrumors 6502a

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    #109
    When your so-called "NORMAL" method was established, phones were just phones, and the cellular chip / technology is THE (only) core of those products. Nowadays, smartphones are more of a computer than a phone, so it's obviously improper for the cellular technology to get a percentage style of cut of the whole product, because there are several MORE IMPORTANT components in the smartphones.
     
  10. lazard macrumors 68000

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    #110
    huh? The modem is one of the most important components in smartphones. Always has and always will.
     
  11. Rob_2811 macrumors 68000

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    #111
    Good luck using your "computer" without a modem.
     
  12. apolloa, Apr 28, 2017
    Last edited: Apr 29, 2017

    apolloa macrumors G4

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    #112
    And here you go, a statement has been added to the story which is the EXACT SAME EXCUSE Apple has used against every supplier it's gone to court with, and as highlighted in this thread already they are paying far less then anyone else.
    This is nothing more then Apples business model, plain and simple, it screws over everyone to get as cheap a deal as possible and far less then anyone else. All about the profit, nothing to do with a 'fair price', Apples idea of a fair price is zero!......

    "We've been trying to reach a licensing agreement with Qualcomm for more than five years but they have refused to negotiate fair terms," Apple told Axios in a statement. "Without an agreed-upon rate to determine how much is owed, we have suspended payments until the correct amount can be determined by the court. As we've said before, Qualcomm's demands are unreasonable and they have been charging higher rates based on our innovation, not their own."

    Now if I remember correctly, Ericsson offered to allow the courts to set the license fee from Apple, and Apple flatly refused the offer and counter sued, most likely because they felt they'd get more money that way. Morals don't fit in Apples business model..
     
  13. I7guy macrumors Core

    I7guy

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    #113
  14. techwhiz macrumors 6502a

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    #114
    So actually they won't and I think that's what makes them mad.
    Even with Intel there is licensing to be paid to Qualcomm.
    Qualcomm own the fundamental patents for CDMA and GSM.
    You also can't do LTE without Qualcomm licensing.

    Viterbi was Qualcomm founder and invented the algorithms that make any efficient cellphone communication possible. This also applies to dial up modems, satellite transmission, 802.11, speech recognition.
    It's a probability algorithm. It can also be used in the area or machine medical diagnosis.

    Apple is going to pay. No way around it.
    They were getting rebates as long as they only used Qualcomm. The rebates stopped when they started using Intel.

    Also, this is about a grab to increase profits.You can believe they will not be passing any savings to you. Most companies don't complain and just pass the cost to the consumer.
     
  15. MrX8503 macrumors 68020

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    #115
    There are Android phones just as expensive as the iPhone.
     
  16. Le Big Mac macrumors 68030

    Le Big Mac

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    #116
    That's why Apple has Qualcomm over a bit of a barrel, plus Qualcomm can't stop Apple from using the IP any faster than Apple can get a resolution on royalties.

    They've been arguing for years, but kept it out of the public eye. Plus, Apple was stuck with Qualcomm until they got Intel to design a comparable chip, so now they're less stuck.
    --- Post Merged, Apr 28, 2017 ---
    That's the crux of a complex argument. Qualcomm has licensing terms it demands that allow them to get around the exhaustion rule, which otherwise would mean once the chip is sold they can't keep charging for it. Qualcomm's rationale is (a) that's legal and (b) they need to structure contracts that way so they can be compensated for their IP, as otherwise they couldn't keep track of who sold chips where and what royalties they were due. Apple on the other hand argues that by charging royalties based on the handset value, Qualcomm gets paid for Apple's innovation on other aspects of the iPhone (i.e., why should Apple pay more than an Android phone maker when Apple has a more innovative software in the phone that consumers are willing to pay more for)
    --- Post Merged, Apr 28, 2017 ---
    And that's going to be the next fight for IoT devices - should a company pay the same royalties for a wireless chip that goes in a phone, a refrigerator, or a car? Or should they pay in each case based on the value of the item its embedded in?
     
  17. RickInHouston macrumors 65816

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    #117
    ...and if Qualcomm stops shipping their chip to apple?
     
  18. ani4ani macrumors 6502a

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    #118
    No one is arguing that, but if the same chip exists in a cheap android phone as well as an iPhone then, if the royalty is paid on the sell price, then Apple will be paying 5 x as much ( read consumer is paying more)
     
  19. tongxinshe macrumors 6502a

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    #119
    You missed one word -- "combined"! So, 340/45 is TOTALLY wrong an equation, it's more like 340/220.

    As Qualcomm says, Apple withheld $500 million royalty fees, which is the amount for the phones Apple sold in the first quarter of this year. So, the royalty rate is about $10 per phone. So, some part of your information is wrong, either the base phone price for the calculation, or the rate percentage. To my understanding, both of them are wrong, because I remember reading a document saying that the percentage Qualcomm asks for is something like 1.35%. $10 / 1.35% = ~$700, that is clearly around the average iPhone retail price.
     
  20. agsystems macrumors 6502a

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    Aug 1, 2013
    #120
    thanks for the background...what you are saying is that even after Intel pays for licensing -
    Apple will continue to pay both Intel and Qualcomm - I am very interesting to see how this goes after the next iphones are released.
     
  21. kdarling, Apr 28, 2017
    Last edited: Apr 28, 2017

    kdarling macrumors P6

    kdarling

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    #121
    Qualcomm's royalty rate is well known, and it's an open secret that Apple only pays according to the Foxconn price. I've posted sources here before; you can search if you wish.

    As far as rates go, here is an older chart of the starting negotiation rates for LTE (which includes a 3G license):

    etsi_royalty_rates.png

    The last I checked, I think most LTE licenses were capped by a licensing consortium at 15% or $10, whichever was less. Then there's Qualcomm which I think is at or below 3.0% now. Plus a smattering of other minor licenses for pennies.

    No, because Apple made a different deal with Qualcomm. See above and post #96, please.
     
  22. I7guy macrumors Core

    I7guy

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    #122
    So this is from 2010?
     
  23. Juan007 macrumors 6502a

    Juan007

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    #123
    GREAT! Steve Jobs invented the iPhone, not Qualcomm!!! Don't give one dime to those lawyer leaches.
     
  24. prasand macrumors 6502

    prasand

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    #124
    The upcoming iPhone release is anticipated to be a supercycle. The iPhone 8 is also expected to be the most expensive iPhone thus far. So not only will the number of sales go through the roof, the profit per sale compounds it and will push revenue through the roof. As a consequence, Apple would have in turn also been paying record-breaking royalties to Qualcomm, for technologies and cycles Qualcomm has nothing to do with.


    Apple needed to push the matter before the next iPhone event.
     
  25. itsmilo macrumors 68020

    itsmilo

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    #125
    Reminds me of our CEO who simply withholds payments from our suppliers/developers until something has been fixed ^^
     

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