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

[kdarling]

So this is from 2010?

There are later charts, but a major point of FRAND is that rates do not change much over time

If you're not too lazy, you can always research their rates on your own. Let us know if you find anything different from what I've posted. Thanks.

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.

It's not just so-called normal, it IS one quite normal, valid way of licensing patents. This is indisputable. As for a smartphone, without cellular it becomes just a plain WiFi device like an iPod touch. But see below:

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?

Certainly a popular feeling these days is that royalties should be based only on a patent's contribution towards the entire device. Determining that contribution can be difficult though.

For example, when sued for infringement, Apple's lawyers always claim that Apple should pay just pennies for anyone else's patents -- even if they're core technology. Yet when Apple sues someone else like Samsung, suddenly minor UI patents with workarounds are worth hundreds of millions of dollars in damages

As for paying by product price, here's a great example of doing that: Apple taking 30% of app sales!

Storing a $1,000 app costs the same as doing so for a $1 app. So why does an app developer have to pay Apple $300 in the first case, and only 30 cents in the second case. Because it's exactly like the way Qualcomm and other cellular patent holders charge: by using a fixed percentage of the price, so those who make more, pay more.

 

[Septembersrain]

Great more crappy Intel modems for everyone!

Ugh. I've had terrible luck on my T-Mobile 7 Plus with my data, calls and my 6s doesn't experience them.

Edit: So in my eyes as Apple charges us more they get charged more. Should we all start suing because they are using unfair business models to charge us out the ying yang too?

 

[Glideslope]

Great more crappy Intel modems for everyone!

Ugh. I've had terrible luck on my T-Mobile 7 Plus with my data, calls and my 6s doesn't experience them.

Edit: So in my eyes as Apple charges us more they get charged more. Should we all start suing because they are using unfair business models to charge us out the ying yang too?

Give Intel a chance. They are entering a new chapter along with ARM Fabrication. Do not underestimate them.

 

[Septembersrain]

Give Intel a chance. They are entering a new chapter along with ARM Fabrication. Do not underestimate them.

I sure hope they've learned from using us as a model that they need major improvement. You've got a multitude of people moving through a device to get a Qualcomm. Those of us with Intel feel very sighted by Apple. We've got a product that only works with GSM and has multiple complaints. We didn't pay less for having less. Apple is just as bad as Qualcomm.

 

[Abazigal]

Good luck using your "computer" without a modem.

Apple - "If you don't lower the price of Qualcomm chips, we're going to make Intel the standard"
Qualcomm - "You can't be serious. They're slower and everyone knows it."
Apple - "Ask nVidia."
Qualcomm - "..........crap"

 

[I7guy]

There are later charts, but a major point of FRAND is that rates do not change much over time

If you're not too lazy, you can always research their rates on your own. Let us know if you find anything different from what I've posted. Thanks.



It's not just so-called normal, it IS one quite normal, valid way of licensing patents. This is indisputable. As for a smartphone, without cellular it becomes just a plain WiFi device like an iPod touch. But see below:



Certainly a popular feeling these days is that royalties should be based only on a patent's contribution towards the entire device. Determining that contribution can be difficult though.

For example, when sued for infringement, Apple's lawyers always claim that Apple should pay just pennies for anyone else's patents -- even if they're core technology. Yet when Apple sues someone else like Samsung, suddenly minor UI patents with workarounds are worth hundreds of millions of dollars in damages

As for paying by product price, here's a great example of doing that: Apple taking 30% of app sales!

Storing a $1,000 app costs the same as doing so for a $1 app. So why does an app developer have to pay Apple $300 in the first case, and only 30 cents in the second case. Because it's exactly like the way Qualcomm and other cellular patent holders charge: by using a fixed percentage of the price, so those who make more, pay more.

There is a clear difference between licensing patent technology and going to the courts to protect your(or apples) intellectual and/or patents. The app store example is a retail operation and the price has nothing to do with how much the storage costs to store the apps. It's like saying Macy's should set the price of suits based on the cost of the cash register and not on the inherent value.

 

[MrX8503]

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)

That logic is flawed because I buy the phone for the WHOLE EXPERIENCE.

Non Apple users don't understand that.

 

[grkm3]

I don't get it apple...just buy the damn Qualcomm modem and put it inside the phone.

You don't have to design or do anything and the new gs8 is using it and can hit 1gb speeds.

 

[techwhiz]

GREAT! Steve Jobs invented the iPhone, not Qualcomm!!! Don't give one dime to those lawyer leaches.

So sell a phone with no modem......
[doublepost=1493433164][/doublepost]

Apple - "If you don't lower the price of Qualcomm chips, we're going to make Intel the standard"
Qualcomm - "You can't be serious. They're slower and everyone knows it."
Apple - "Ask nVidia."
Qualcomm - "..........crap"

Qualcomm says we don't care because Intel also pays a licensing fee. We own the core technology.

 

[jase1125]

Milk 'em Qualcomm for all you can get and then some...

 

[alexgowers]

From the sounds of it apple is being charged higher rates than competitors. Qualcomm have also not been paying back money owed to apple from some kind of rebait system. I'm very rarely on the side of apple in these cases but I really hate patents being used unfairly like organised crime protection rackets. They should either be licensed fairly to everyone or not at all. I'm always surprised apple can't involve themselves in next gen standards to become a licensee like Nokia used to be.

 

[Delgibbons]

Milk 'em Qualcomm for all you can get and then some...

As we've said before, Qualcomm's demands are unreasonable and they have been charging higher rates based on our innovation, not their own."

Apple and innovation? Go home Apple, you're drunk. Previous gen intel chips in a "PRO" laptop. One or two USB ports.

Develop your own screens and memory like Samsung, or develop a decent modem like Qualcomm (or just use Intel's far inferior solution) then we can talk about innovation.

Hell Apple's entire profit is based on the genius of the ARM company giving power saving mobile chips.
[doublepost=1493458150][/doublepost]

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):

View attachment 697813

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.

Look at all the patents innovative Apple own....

Oh.

 

[dilbert99]

Or Qualcomm.

It should be resolved through the courts, not by one side ceasing payments.

 

[Glideslope]

I sure hope they've learned from using us as a model that they need major improvement. You've got a multitude of people moving through a device to get a Qualcomm. Those of us with Intel feel very sighted by Apple. We've got a product that only works with GSM and has multiple complaints. We didn't pay less for having less. Apple is just as bad as Qualcomm.

In some areas yes. Apple can be just as nasty. However, if you look closely you'll notice the Intel Modem has it's limitations due to Qualcomm Licensing constraints more than an inability to fabricate.

 

[thisisnotmyname]

...and if Qualcomm stops shipping their chip to apple?

Qualcomm's stock price would crater.

 

[ROSSMUNCH]

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.

I'd climb out of the hole and change horses if I was you.
Their royalty scheme has it's days numbered.

 

[justperry]

It should be resolved through the courts, not by one side ceasing payments.

Oh, I agree, I just responded to that poster that more or less said it's Apple's fault, we don't know this, so I replied back with my comment.

 

[Rob_2811]

Apple - "If you don't lower the price of Qualcomm chips, we're going to make Intel the standard"
Qualcomm - "You can't be serious. They're slower and everyone knows it."
Apple - "Ask nVidia."
Qualcomm - "..........crap"

And put out a poorer product as a result.

Apple admitted that they throttled the Qualcomm iPhone 7 because the performance outstripped the models with Intel modems. Graphics performance on Macs is dire for similar reasons.

Very odd that people would be pleased about Apple products with inferior components just to boost their already huge profit margins. Unless they hold Apple stock at which point you can't really take their opinion seriously.

 

[tooltalk]

Apple - "If you don't lower the price of Qualcomm chips, we're going to make Intel the standard"
Qualcomm - "You can't be serious. They're slower and everyone knows it."
Apple - "Ask nVidia."
Qualcomm - "..........crap"

I don't get the nVidia reference.

 

[I7guy]

And put out a poorer product as a result.

Apple admitted that they throttled the Qualcomm iPhone 7 because the performance outstripped the models with Intel modems. Graphics performance on Macs is dire for similar reasons.

Very odd that people would be pleased about Apple products with inferior components just to boost their already huge profit margins. Unless they hold Apple stock at which point you can't really take their opinion seriously.

Even though Apple throttled the performance downloads could still hit a healthy amount, what use cases does one need 400-500 down, more than most home internet connections, even while tethering. Except for bragging rights I suspect most of the iPhone population does not require 500 down.

In that vein why wouldn't I be pleased with my iPhone and simultaneously care about apples profit margin? I find it odd that people care about apples margins, except as an Internet talking point.

 

[Rob_2811]

Even though Apple throttled the performance downloads could still hit a healthy amount, what use cases does one need 400-500 down, more than most home internet connections, even while tethering. Except for bragging rights I suspect most of the iPhone population does not require 500 down.

In that vein why wouldn't I be pleased with my iPhone and simultaneously care about apples profit margin? I find it odd that people care about apples margins, except as an Internet talking point.

Right but the comparison to the AMD/Nvidia graphics issue was a terrible one.

The use of AMD cards is why graphics performance on the Mac is a joke. It's nonsense to suggest that is an internet talking point only.

 

[I7guy]

Right but the comparison to the AMD/Nvidia graphics issue was a terrible one.

The use of AMD cards is why graphics performance on the Mac is a joke. It's nonsense to suggest that is an internet talking point only.

I wasn't referring to amd cards, nor do I have a Mac with one, only to the references to lte download speed.

 

[Rob_2811]

I wasn't referring to amd cards, nor do I have a Mac with one, only to the references to lte download speed.

My post, which you have just responded to, was a response to another post which compared this situation to the Apple switching to using AMD graphics cards in Macs from Nvidia.

The use of inferior components because of Apples refusal to pay the appropriate royalties might not have hindered real world performance of the iPhone 7 but it certainly has the Mac.

 

[vmistery]

I'm not sure how people can be taking sides here as no one here has all the facts yet. At the moment all we really know is Apple are not (indirectly) paying Qualcomm for some reason. Two US companies having a spat over something which is in every single iPhone made before the Intel chips in some 7s is indeed a big deal however, I am interested to find out who is at fault. It does seem odd to pay anything at all however.

 

[Septembersrain]

Right but the comparison to the AMD/Nvidia graphics issue was a terrible one.

The use of AMD cards is why graphics performance on the Mac is a joke. It's nonsense to suggest that is an internet talking point only.

Just like TSMC/Samsung, now Qualcomm/Intel. It feels like some of us get inferior hardware while others get their superior ones throttled to meet the inferior one.

That's not making good leaps and bounds with the technological front.