If true, Kuo just blew a huge hole in the theory that Apple came crawling back to Qualcomm on its knees and was forced to settle in order to have 5G in 2020.
That said, it doesn’t really make sense that Apple would add Samsung as a modem supplier. 1) The whole point of dual sourcing is to reduce supply risk and gain pricing leverage. Neither should be necessary since Apple just negotiated a multi-year supply agreement. TSMC will have no issue cranking out the necessary quantity. 2) To get the reported $8-9 royalty rate for Qualcomm’s baseband chips—cheaper than the $7.50 Apple was paying for 3G modems in the 2007-2011 timeframe, and certainly no more than the 4G modems in the 2013 agreement, Qualcomm would have wanted exclusivity. (But I believe that behavior also has antitrust implications, so maybe exclusivity was no longer a requirement?) 3) Samsung had been playing hard to get, recently claiming they couldn’t sell their 5G modems to Apple because they were unable to manufacture sufficient quantity. 4) Apple is making their own baseband chip, why would they bother second sourcing them for the short period of time they’ll need to rely on anyone else at all?
Yes. Just a few things.Exactly. The Apple haters/naysayers are looking for anything to make Apple look like the bad guy or that they lost/caved in. There’s no logic to their reasoning other than....because Apple.
Qualcomm actually wanted $13 (3.25% royalty on a $400 capped device value) per iPhone. So if that $8-9 figure is true it’s actually a big discount (31-39%) compared to what Qualcomm was looking for.
Further, Apple and Qualcomm ceased all lawsuits. So it makes sense that there are other non-essential patents included in that licensing agreement.
Yet we have people throwing around an old $7.50 figure so they can claim Apple lost by supposedly paying more ($8-9).
1. "$7.50 Apple was paying for 3G modems"
The $7.5, $8-9 are for Patents fees, not for Modems. Those are in $30s.
2. Apple is making their own baseband chip, why would they bother second sourcing them for the short period of time they’ll need to rely on anyone else at all?
The whole point of the 6 years deal ( including this year ) is that Apple knew they are going to take at least 3 - 4 years to get an 5G Modem. And that is if the Modem is any good compared to Qualcomm's 3 - 4 years from now. We will see if Intel decide to sell off their Modem division to Apple in one way or another.
Qualcomm forbid Samsung to sell modem or Soc to anyone else. I highly doubt Qualcomm will make a new arrangement with Samsung just for them to produce and compete with themselves. And it was Qualcomm that had the upper hand in the case.
4. So if that $8-9 figure is true it’s actually a big discount (31-39%) compared to what Qualcomm was looking for.
Qualcomm wanted 5%, and they are willing to back to 3.25%. Although the price are capped to $400 since 2018, Apple had never had reached the cap as it was changed to Foxconn on its BOM cost, which even the iPhone XS Max don't reach $400. If you do an average across all iPhone, from 8, XR, XS and take it as around $250, a 3.25% gives $8.125 per phone. Now it is likely a fixed cost per unit as the license are Direct to Apple and not to Foxconn, Apple could no longer use BOM cost to shield its value.
And as it stand everything remain pretty much the same as pre Intel Modem era, except without further price increase from Qualcomm. I cant say Apple had lost, but they didn't win as they thought they would either.