Qualcomm Got $4.5 Billion From Apple Settlement According to Earnings Release

[AFDoc]

does Qualcom produce anything or are they just a patent repository?
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Without knowing the terms of the future agreement, that assumption cannot be made.

anytime a company is forced to pay money they lost.... NOW that doesn't mean they didn't come out the same or better with that end result but they still lost.

 

[sdf]

Remember kids, the $4.5B is likely just royalty payments Apple stopped making during litigation and they are paying QCOM to make them whole on previously agreed terms. This isn't like a $4.5B bonus for QCOM.

Yup. Apple stopped paying two years ago. $4.5b sounds like a lot, but that settlement covers two years of iPhone sales. At issue was never if Apple should pay, but how much and as a percentage of what. I'm not going to be bothered to go back and look up iPhone sales for the last eight quarters, but at $560m per quarter I'd say Apple likely got a pretty steep discount.

 

[Baymowe335]

does Qualcom produce anything or are they just a patent repository?
[doublepost=1556757941][/doublepost]
anytime a company is forced to pay money they lost.... NOW that doesn't mean they didn't come out the same or better with that end result but they still lost.

They weren’t forced, my dude. They agreed to settle based on all the terms.

Sorry, but that’s not how this works. Apple got a future deal in which we don’t know the details and they already owed this money. This is not new money.
[doublepost=1556758951][/doublepost]

Yup. Apple stopped paying two years ago. $4.5b sounds like a lot, but that settlement covers two years of iPhone sales. At issue was never if Apple should pay, but how much and as a percentage of what. I'm not going to be bothered to go back and look up iPhone sales for the last eight quarters, but at $560m per quarter I'd say Apple likely got a pretty steep discount.

Exactly...and the new terms are obviously to their liking or I believe they continue waiting.

 

[Seoras]

If Apple thought they could win they would not have settled.

I suspect Apple still thinks it could have won but more importantly who's 5G chip set was it going to use in the mean time?
Intel threw in the towel on 5G and left Apple stranded. Huawei is out of bounds for US tech firms leaving only QCOM.
How bad would it have looked for next couple of years of iPhone models having no 5G and their competitors making good capital of that fact.
QCOM effectively ended up with a monopoly position on Apple which they couldn't work around.

 

[TVreporter]

Apple: Just a minute I think we lost a couple of billion in between the couch seats.

 

[Intellectua1]

Are you defending Apple preemptively?



I could be wrong, but I don't think that is what @I7guy was acting like.

I know what he meant, he was saying it like QC would die without that money which is not true, this is not the first time they've been without Apple's business and I'm sure it won't be the last, they'll adjust and be fine.

 

[I7guy]

I know what he meant, he was saying it like QC would die without that money which is not true, this is not the first time they've been without Apple's business and I'm sure it won't be the last, they'll adjust and be fine.

With a settlement it's about everybody getting what works for them, with no winners. Apple got something and Qualcomm got something. It's my opinion each caved to a certain degree. One can read between the tea leaves and attempt to decide who got the better of who, but it's all conjecture. Qualcomm wanted the money apple put in escrow and settlement as much as Apple wanted access to the tech. Was Qualcomm ready for years of a protracted trial and Apple ready to forego access to Qualcomm tech while the proceeds were in progress? No one really knows.

So you are entitled to your own opinion as others are entitled to theirs.

 

[BuffaloTF]

Apple claimed that Qualcomm "double dipping" was illegal and they did not have to pay them any royalties at all:

Now Apple has broadened its own attack. It told a U.S. court that Qualcomm’s licensing agreement, which allows it to claim a cut of every iPhone sold, is invalid. If Apple is successful, it could put a stop to Qualcomm’s longstanding business model.

In the settlement they agreed to pay the royalties. Clearly Apple lost to Qualcomm. You can't spin them out of this predicament.

???

Qualcomm employed a tactic of double dipping. You had to buy their license to get their chip. They’re the only supplier that does this. Under normal circumstances, the license is absorbed in the price of the chip.

They now only need to buy the chip, and if they don’t want the chip they have the license for what was reported as 8 years. How isn’t that a win for Apple? Cut the costs down to what they were paying Intel, with the freedom to make their own modems and not give another dime.

 

[Gasu E.]

Apple had claimed previously :

a) by patent exhaustion, Apple (or its CMs) owed no patent royalty
b) by SSPPU and FRAND, QCOM's royalty shouldn't exceed $1.50 per device at max
c) CM's old contracts with QCOM were invalid because QCOM's breach of FRAND
d) $1B rebates withheld by QCOM for breaching BCPA

Apple won (d), but lost (a), (b), (c). This effectively also ends Apple's 10-year campaign against wireless SEP holders, though the FTC case is still on.

Well stated. But wasn't the royalty settlement somewhere between Apple's asking position and QCOM's position?

 

[pweicks]

“Gooood. Goooooooood!”
-Palpatine

 

[calstanford]

Was all this drama with Qualcomm worth it, Apple? Was it?

 

[ksec]

It's not a win if QCOM wanted $15/iPhone and Apple stopped royalty payments already agreed from before. How much of the $4.5B was stopped royalty payments they owed anyway?

And how much did Apple save in their new terms versus what QCOM wanted over the next 5 years?

Yeah, you don't know.

It was never $15. It was the widely misinterpreted bit. Qualcomm wanted 5% of the Foxconn Sale price to Apple, not retail price. With a Cap of $400. That is the standard rate without all the rebate and discount, along with other amount passed to non-qualcomm entity. ( IPs used within the Modem that does not belongs to Qualcomm )

Tim Cook has been arguing they should paid 5% of the $30 Modem part, not the iPhone.

Steve Jobs made the deal with Qualcomm at $7.5 per unit. Qualcomm tries to rise that number, and then they got the lawsuit.

And it reads to me the UBS analyst got it right.

Your math is suspect.

If Apple is currently paying $7.50 for 4G modems (which is what Apple claimed), and now gets 5G (which also includes 4G for compatibility) for $8-9, then it means Apple is only paying between $0.50-1.50 for 5G. Seems like a bargain to me.

Qualcomm stated back in Oct 2018 that Apple owed $7 billion in withheld royalties. Minus the $1 billion Apple won in a previous ruling leaves $6 billion. The actual amount was $4.5 billion so that "analyst" was off a whopping $1.5 billion.

Looks like he wasn't right AT ALL.

The $7.5 is for patents, not modem. The modem price is entirely different. If I had to put a guess 5G modem will be $40+ per unit. And that is excluding all the additional antenna required for mmWave and other crap..... i.e Expensive.

Again the $7 billion is basic figures, does not include what Qualcomm will need to rebate back to Apple. It is like saying Apple owes me $7B but we need to give back $ (x) B without mentioning the last part.

All in all, this is better than previously thought. You can see this as both party didn't get exactly what they *wanted* and both lost, or both party compromise and got what they *needed* and both Win.

Actually the more I read the more I admire Qualcomm's professionalism, Samsung, and now Apple all got a license with Qualcomm.

Edit: Turns out the dispute with Huawei over patents is still on going.

 

[ani4ani]

The last laugh will be Apples’ now they have stopped selling phones /s

 

[Naraxus]

How can it not be a win? They presumably got their overdue royalty payments, an increase in the royalty rate from $7.50 to between $8 to $9 per device, and another long term commitment. Supposedly wanting $15 and getting ~$8 or so can't be considered losing... especially when they were getting $0 in overdue payments, $0 dollars per device in current and future payments, and no commitment for 5G modems. In no version of this tale did Qualcomm not win. That's not to say Apple lost, because they didn't. But you can't honestly put forth an argument where Qualcomm didn't win.

It is a win for Qualcom but like many here, the op won’t or can’t admit to that fact for some reason.

 

[ROGmaster]

Honestly, I expected Apple to have bought Qualcomm, take their patents and R&D team, and fire the entire executive team just to spite them.

Seems like something Apple would do, just saying.

Yeah this is what users that have no arguments keep expecting every time Apple has a problem with another company.
There was even a user here that was thinking Apple should buy Samsung and fire everybody for example.

 

[gnasher729]

More confirmation apple was lying about being overcharged.

Total nonsense. Qualcomm did try to overcharge. This is much less than Qualcomm _wanted_.

 

[pmore]

Of course it did. Qualcomm gave apple the products it needed and in return apple broke their agreement and payed nothing. That's called a scam and there's no way to defend apple in this.

Exactly. I'm glad Apple lost. They are in the wrong. And we get to keep using Qualcomm modems.

 

[FFR]

I'm sure you'd need your $4.5B too, in fact I bet you'd need your $100 if someone owed it to you. Stop acting like someone needing their money is a bad thing

Needing the money would be a big incentive to settle.

 

[Flight Plan]

And Qualcomm needed the money.

Probably.

A drop in the bucket for Apple, and it gets them access to quality modem chips, which they weren't able to get from Intel. Sounds like winners all around, except Intel, who didn't seem to really want to be in the business anyway.

Probably.

That's Four Thousand and Five Hundred Million Dollars. Money none of us can even imagine!

You, sir or madam, are an underachiever. I can imagine that much money times four thousand and five hundred million MORE. You should enroll in my imagination school, especially if you can't even imagine how magically powerful a diploma from my institution would be.

Apple had claimed previously :

a) by patent exhaustion, Apple (or its CMs) owed no patent royalty
b) by SSPPU and FRAND, QCOM's royalty shouldn't exceed $1.50 per device at max
c) CM's old contracts with QCOM were invalid because QCOM's breach of FRAND
d) $1B rebates withheld by QCOM for breaching BCPA

Apple won (d), but lost (a), (b), (c). This effectively also ends Apple's 10-year campaign against wireless SEP holders, though the FTC case is still on.

Pffft, pocket change.

Honestly, I expected Apple to have bought Qualcomm, take their patents and R&D team, and fire the entire executive team just to spite them.

Seems like something Apple would do, just saying.

Hell, it's what I would have done, and I'm not even Donald Trump!

Yup. Apple stopped paying two years ago. $4.5b sounds like a lot, but that settlement covers two years of iPhone sales. At issue was never if Apple should pay, but how much and as a percentage of what. I'm not going to be bothered to go back and look up iPhone sales for the last eight quarters, but at $560m per quarter I'd say Apple likely got a pretty steep discount.

The art of the deal.

With a settlement it's about everybody getting what works for them, with no winners. Apple got something and Qualcomm got something. It's my opinion each caved to a certain degree. One can read between the tea leaves and attempt to decide who got the better of who, but it's all conjecture. Qualcomm wanted the money apple put in escrow and settlement as much as Apple wanted access to the tech. Was Qualcomm ready for years of a protracted trial and Apple ready to forego access to Qualcomm tech while the proceeds were in progress? No one really knows.

So you are entitled to your own opinion as others are entitled to theirs.

This deal was pure art.

Exactly. I'm glad Apple lost. They are in the wrong. And we get to keep using Qualcomm modems.

The real art of this deal is that you think Apple lost. They didn't (it was a settlement, which is a negotiation and agreement), but that doesn't matter, because you're happy and won't be complaining or making a stink.

Needing the money would be a big incentive to settle.

Both parties got what they needed. Apple can move forward now without having to buy Qualcom this year, and Qualcom can stave off bankruptcy and a leveraged buyout from Apple for another few years. Win win win win! Umbrella drinks for everybody, yay!

 

[0947347]

That's Four Thousand and Five Hundred
Million Dollars. Money none of us can even imagine!

I can imagine
Imagine only though

 

[FFR]

Probably.

Probably.

We always will, for as long as people like you put up with policies that encourage the practice to continue. Whatever you're doing, it's surely not enough to FIX the problem.

You, sir or madam, are an underachiever. I can imagine that much money times four thousand and five hundred million MORE. You should enroll in my imagination school, especially if you can't even imagine how magically powerful a diploma from my institution would be.

Pffft, pocket change.

Hell, it's what I would have done, and I'm not even Donald Trump!

The art of the deal.

This deal was pure art.

The real art of this deal is that you think Apple lost. They didn't (it was a settlement, which is a negotiation and agreement), but that doesn't matter, because you're happy and won't be complaining or making a stink.

Both parties got what they needed. Apple can move forward now without having to buy Qualcom this year, and Qualcom can stave off bankruptcy and a leveraged buyout from Apple for another few years. Win win win win! Umbrella drinks for everybody, yay!

Sure but only one party couldn’t wait for 6 days. Qualcomm needed the trial to be over quickly and quietly.

It took intel completely by surprise. Hell if intels 5g modem was vaporware like so many on here keep claiming, then intel would have expected this. They clearly didn’t.

The only logical explanation is that apple were in talks to acquire intels 5g modem business, when Qualcomm caught wind of it, they offered apple a settlement apple couldn’t refuse.

Apple even got the head of intel 5g modem division to come work for them. Wouldn’t make sense to hire a man that couldn’t deliver a 5g modem. So much rampant speculation without looking at all the facts.

More information will come to light. It always does.

 

[joueboy]

We all know and it's obvious that Apple owe Qualcomm big time as in B and that they need to pay up. But I guess that includes to secure a millions of 5G chips for future iPhones.

 

[FFR]

We all know and it's obvious that Apple owe Qualcomm big time as in B and that they need to pay up. But I guess that includes to secure a millions of 5G chips for future iPhones.

5g chips for 2020 iPhones couldn’t wait 6 days?

 

[RickInHouston]

They weren’t forced. By virtue of the settlement, which could have resulted in a protracted legal battle had they not settled, they (Apple) settled and that means voluntarily handing over the money.

Interesting way of putting it. Thank you for that.

 

[Benhamdoun]

Bully owned.