It's all about image, Qualcomm can then no longer say their chipset is in Apple products, only the software portion. And that would hurt them even further.
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Qualcomm Accuses Apple of Helping Intel Using Qualcomm Software
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He was a very good boy so never an issue with him but unfortunately my best bud passed in July. He now immortally lives on via Macrumors.
Awwh man, I’m really sorry to hear that.
Yours is a very common mistake. You are mixing up two totally separate things (as Apple hoped you will), chips and IP.
CHIPS - The chip vendor side of Qualcomm sells each part at a fixed price. Apple can buy those chips, or chips from anyone else who sells a chip for less. Which they do already, having used chips from Infineon, Intel (who bought Infineon) and Qualcomm.
IP - But chips are just silicon, sold at a price reflecting what it took to design and manufacture them. They do NOT REPEAT NOT include all the IP surrounding them or software needed to run them, for which a device maker must pay all the companies who created that IP / software.
Think of it like the difference between selling an ARM chip and if Apple were to license iOS. They're not the same thing, and the chip would not include a license for the OS. Likewise a modem chip is just a fancy CPU (DSP), useless without code to run it.
Here are just some of the inventors whom a phone maker has to pay to utilize 3G:
And guess what? Most of them charge by the device cost. Just as with the App Store, everyone pays a percentage. In that way, higher cost products subsidize lower cost products, leading to more customers for everyone. It's a common way of licensing IP.
Apple is not just targeting Qualcomm. They want to shave royalties to everyone. Even though they've made hundreds of billions themselves selling phones that rely on the IP of others.
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The Bloomberg article states that Apple supposedly sent an email to Qualcomm, requesting proprietary information, while putting an Intel engineer on Cc.
I strongly assume that was just a mistake on Apple‘s behalf. I would guess that whoever sent that email was in contact with both Qualcomm and Intel engineers, and when they wanted to include another Qualcomm guy on the email, the address autocompleter found an Intel guy with a similar name. Something like that. It would be a simple mistake. A mistake that the Apple engineer in question would get fired for, but an honest mistake nonetheless.
Other than that, what proof would they have? If the allegations were really true, they would need insider witnesses from either Apple or Intel to confirm them.
Crap, I hope I won‘t get subpoenaed over this.
The Contract Law Police?
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Right. BCC would be a problem, but CC?
On a related note, Bas Ording (who did much of the major iPhone UI design features that people love), left Apple to work at Tesla.
Apparently he got tired of spending most of his time at Apple in patent trials instead of developing.
You've got a point. I think Qualcomm will run into trouble eventually, because it's only a matter of time before Samsung follows suit and start making their own chips too.
I guess they don't like paying Qualcomm more money when they make more expensive phones where the higher cost has nothing to do with Qualcomm parts. E.g. putting extra NAND storage in the phone? Pay Qualcomm more!
I bought the 7-plus through the Apple Upgrade program thinking I had an unlocked phone, but not knowing at the time it was BS because I couldn't use it on Verizon or Sprint, which is a pretty big deal when you think about it. I’m not upgrading now because of this and will jump ship if not resolved by next year.
Qualcomm on Wednesday filed yet another lawsuit against Apple, this time accusing the company of breaching software licensing terms and using Qualcomm code to help Intel, reports Bloomberg.
According to Qualcomm, Apple breached a contract that dictates the use of software that's designed to make Qualcomm chips work with other iPhone components. Qualcomm also believes Apple may have used its access to that software to help Intel with its own modem chip development.
Since 2016, Apple has been using LTE chips from both Intel and Qualcomm in an effort to diversify its supply chain and move some production away from Qualcomm. The iPhone 7, 7 Plus, 8, and 8 Plus all use a mix of Qualcomm and Intel chips.
In light of the ongoing legal battle with Qualcomm, Apple is said to be considering eliminating Qualcomm chips from its devices all together, instead adopting chips from Intel and possibly MediaTek. Rumors suggest Qualcomm has been withholding software from Apple that Apple needs to test prototype devices for next year, forcing Apple's hand.
Qualcomm and Apple have been involved in an escalating legal fight since the beginning of the year after Apple sued Qualcomm for $1 billion. Apple has accused Qualcomm of charging unfair royalties for "technologies they have nothing to do with" and failing to pay for quarterly rebates.
Apple has since stopped paying royalties to Qualcomm until new licensing fees have been worked out, as have Apple suppliers, significantly impacting Qualcomm's profits.
Qualcomm has since levied several lawsuits against Apple, accusing the company of patent infringement and asking both the United States and China to block imports and exports of some iPhone models.
Article Link: Qualcomm Accuses Apple of Helping Intel Using Qualcomm Software
That doesn‘t automatically imply that you have to buy their chips. You just have to pay licensing fees to them.
The reason why Apple used their modems was that they are simply the best in the market, which is the case due to QCOM‘s self-sustaining business model: They invest a lot into research for the next generation of wireless technologies. That way, they generate a lot of patents and are then able to build cutting-edge modems before their competitors. They then push their patents into the standards, which is easy if you are the first company with a functioning prototype. That way, they make huge amounts of money from patent licensing fees, which in turn is invested into research. And so on.
So yea, if you want the best modems, you have to buy Qualcomm, but companies like Apple are aware of the fact that they are feeding a highly profitable business model that is a near-inevitable path to a full monopoly, as there are fewer and fewer competitors in the market. Samsung realized that a few years ago, and their way out was to build their own modem.
Rubbish. Apple isn’t acting like they “can’t pay”. They can clearly afford to pay. They have issues with how payments are calculated.
With the way Qualcomm has behaved how likely are standards bodies willing to choose their IP for future standards? They’re not behaving like a company with a long term plan.
You make it sound as if standards bodies are somehow impartial courts of technical law where the objectively best solution with the most viable roadmap for the future is chosen.
The standards bodies are composed of the various companies that have an interest in the given technology. And the biggest and most important companies usually have the most power there. In the case of mobile, that would be Qualcomm, also due to the fact that their research tends to be ahead of most other companies. In fact, they usually do not even have to push their own patents into the standards, as they have researched and patented all potential options for implementing a new technology, so no matter which options the other companies choose, Qualcomm wins. They are just obliged to disclose the fact that they have essential patents in the standards.
But that's how IP licensing works. Apple aren't (just) buying components, they're also licensing intellectual property. Licenses and costs are structured differently depending on how they're used by the licensee. That business model is how that stuff was invented by Qualcomm in the first place: They spent money on R&D to develop the technologies that enable an entire industry, based on the assumption that that industry would grow as a result of their effort.
Don't like it? Fine, don't license anyone's IP. But you also shouldn't cheat companies out of what you owe them just because you're Apple.
And guess what? Most of them charge by the device cost. Just as with the App Store, everyone pays a percentage. In that way, higher cost products subsidize lower cost products, leading to more customers for everyone. It's a common way of licensing IP.
Apple is not just targeting Qualcomm. They want to shave royalties to everyone. Even though they've made hundreds of billions themselves selling phones that rely on the IP of others.
Yes, this is what it is all about. As the most expensive phones, under this model of the patent regime, Apple pays much higher royalties per phone than any of their competitors. If it was me that would annoy me too.
And the justification for this practice is supposedly altruism. In reality what it actually does is lock everyone in to a particular product as the startup gets cheap, possibly at even or below cost access to the currently leading product (in this case, Qualcomm chips), thus ensuring competing products get less of a look in and effectively manipulating the market so that the current leader, in this case Qualcomm, will dominate.
The way I see it, Apple is the Little Red Hen and Qualcomm is one of the other barnyard animals, with the extra twist of Qualcomm using the variable prices regime possible under the current patent system to gain a slice of the value of a multitude of other peoples’ patents that go into making a complex product like a phone. Snouts in the trough.
For any FRAND product, there should be a fixed price for the use of the product, the same for all buyers. Other types of patents could be up for negotiation, but I think the practice of charging a percentage of retail price has got to end.
Warped view as always.
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You forgot to discuss the double dipping of royalties. But I would never expect anything less than highly biased explanations from you.
The App Store model is nothing like Qualcomm’s licensing model. Not even in the slightest.
And, of course, Qualcomm and the others haven’t made any money at all selling components to Apple by the hundreds of millions.