Qualcomm Says Apple is $7 Billion Behind in Royalty Payments

[fairuz]

I don’t see that as a relevant distinction. The op suggested that Apple and Qualcomm will be done after the dispute settles. I’m pointing out that it ain’t necessarily so.

It's relevant because the supplying from Qualcomm is how the lawsuits started, and Apple thinks they're untrustworthy. They've already pulled Qualcomm LTE modems out of iPhones.

 

[johnjstanton]

Not good to rely on one company to provide most of your companies income.

If Apple is destroying their business they need a shake up at the executive level.

I agree with Apple they are double dipping. Greedy.

Qualcomm doesn't rely upon one company to provide most of it's income.

Shakeup at executive level... because Apple and China are extorting the company? The current CEO prevented a hostile takeover by China (Broadcom), but admittedly he was screwed by the Chinese blocking a Qualcomm takeover of NXP.

It is not double dipping because the patents that Apple is violating have little to nothing to do with those chips. Apple is making lots of money profiting from technology developed by Qualcomm. Apple agreed to pay a certain amount and then skipped out on the bill. Dine and Dash is not cool when you are rich.

 

[Kabeyun]

It's relevant because the supplying from Qualcomm is how the lawsuits started, and Apple thinks they're untrustworthy. They've already pulled Qualcomm LTE modems out of iPhones.

It’s not relevant because I was simply disagreeing with the op’s suggestion that two companies cannot have a business relationship after they settle a corporate squabble. That Apple and Samsung do have a business relationship after settling a corporate squabble proves they can. I am not drawing any other parallels between Apple/Samsung and Apple/Qualcomm.

 

[bladerunner2000]

Apple is being shady? Omg, no way! Who would have thunk?

 

[sidewinder3000]

Is there anyone on these forums with some legal expertise who can weigh in here? On the surface, this seems a bit like a slamdunk for Apple. If they are paying to use the chips, then they should not have to pay again for patent licensing on the technology in those chips. But laws can be weird, so who knows. Anyone?
[doublepost=1540669616][/doublepost]

To what deal or agreement are you all referring?

That's part of the issue here. (To be clear, there are many other important aspects of this situation - many other improper or illegal or contract-violative things which Qualcomm has been accused, by numerous parties, of doing and which it has been found, by numerous regulatory bodies, to have done.) According to Apple and others, Qualcomm has long refused to enter into direct licensing agreements on FRAND terms with certain parties - to include Apple - despite the reality that it is required to do so.

Instead, Apple had been paying royalties to Qualcomm through its contract manufacturers. Those manufacturers had licensing agreements with Qualcomm, the terms of which they weren't allowed to disclose to Apple. It was to Qualcomm's advantage to have licensing agreements with those third parties rather than with Apple directly; it was one of a number of things which Qualcomm did - many of which were illegal or contract-violative - which worked together as part of a scheme that allowed Qualcomm to collect greater royalties than it otherwise would have been able to.

The point being, in response to your posts, Apple doesn't have a licensing agreement with Qualcomm which it is now refusing to honor. (That's leaving aside the reality that sometimes agreements are entered into under duress, where one party or the other employs illegal or contract-violative tactics in order to, essentially, force the other party to agree to certain terms.)

Apple has had some other agreements with Qualcomm. Some of them are no longer in force. Indeed, their expiration has much to do with the timing of Apple's legal actions. But, at any rate, they weren't direct licensing agreements which Apple is now violating by withholding royalty payments.

Further, there is nothing wrong with withholding royalty payments (for SEPs) in the absence of a licensing agreement if you have acted in good faith to try to reach one. If would-be SEP users weren't able to do that, the process for creating and adhering to industry standards (for, e.g., certain cellular technology) wouldn't work very well. SEP holders would have too much leverage, even when they were the ones acting wrongly - e.g., failing to honor their commitments to license SEP on FRAND terms. They (each of them) would be able to, in effect, shut down other industry participants. They'd be able to greatly constrain competition and demand exorbitant royalties for IP which might not have much inherent value (i.e. where the IP's value came mostly from its inclusion in industry standards, and where they aren't entitled to collect royalties based on such value). That's why SEP agreements generally limit SEP holders' abilities to take actions to stop the use of their IP, even in the absence of licensing agreements, so long as the users of their IP are willing licensees.

Put simply, Apple will pay Qualcomm the royalties it owes when it is determined what those royalties should be. The proper royalties might be the result of, e.g., a negotiation between Apple and Qualcomm or a court's decision. They won't, e.g., be unilaterally imposed by Qualcomm. That is as it should be.
[doublepost=1540650641][/doublepost]

That's one of the issues. But there are many more.

If someone really wants to understand the situation well, they should probably read for themselves things such as: Court filings (from both Apple and Qualcomm and amici and those form other cases, e.g., the FTC's action against Qualcomm) and the findings of various regulatory bodies.

Many people, of course, don't have time for that and / or don't care enough to. That's understandable. We could bullet point some of the issues, and some of us have elsewhere. But that doesn't really have a lot of value if time isn't taken to explain the various issues, why they create problems (or, e.g., are illegal or contract-violative), and how they have worked together to lead to (what many consider) improper results.
[doublepost=1540651191][/doublepost]

Part of the reason Qualcomm's modems were, in certain cases, better was that the scheme it had put in place (which included, e.g., refusing to license to competitors in the modem market and effectively charging device makers higher royalties if they used competitors' modems) severely limited competitors' abilities to compete - to, e.g., spend money to develop competitive modems. That wasn't unintentional. Qualcomm tried to use existing market dominance to prevent competition (and, effectively, stifle innovation) and maintain dominance going forward.

That scheme had to be broken up in order to open up competition and for, e.g., Intel to be able to justify spending the kind of money it would need to (and have real world use to guide its R&D) in order for its modems to be competitive. For all intents and purposes, that scheme has now been broken up (though we don't know what some of the fallout will look like). So, going forward, competitors' modems may well compare favorably to Qualcomms'.

Dude, thank you.

 

[lec0rsaire]

The hell with Qualcomm. Apple should just not pay a single cent. Let them sue Apple again.

Apple has already gone above and beyond and paid them enough. They should be happy with what they have received.

 

[sidewinder3000]

Qualcomm should remote disable their modems.

Well thought out plan.
[doublepost=1540670123][/doublepost]

They don’t just rely on Apple, though. Qualcomm have an absolute monopoly on everything non-Apple. Unfortunately if you’re not looking to buy an Apple phone, the competition will only use Qualcomm chips as both CPUs and modems.

It’s as if somebody boycotted a pop album by buying a metal album. You’re not off the grid — your money’s just going to another massive conglomerate record company instead.

Even Samsung have identified this is a problem and are finally fully transitioning to their own SoCs.

If they lose Samsung, Qualcomm is in trouble. Imagine all the hard-working, regular people who work at QUALCOMM who are going to be screwed by the devious and selfish practices of their management. It’s a real tragedy. This didn’t need to end this way.

 

[now i see it]

This verdict will be decided in the courts. Both parties are going to ultimately lose. Fools.

 

[sidewinder3000]

Qualcomm is charging unfair royalties? But apple is charging unfair prices for their products with obscene profits. they figured out a way to charge more for a Mac mini by putting the word "pro" in front of it.

This makes zero sense. You are just complaining, and trying to create a parallel were not exists.

You may think Apple’s prices are high, but they are not unfair. Apple, in fact, may be the most fair company in terms of pricing I can ever think of, aside from the old Saturn car company. They charge the exact same retail price in every retail outlet, and insist that all their retailers do the same across all channels. An iPhone XR is the same price from Apple that it is from Sprint, or Best Buy, or anywhere else. That is fair.

QUALCOMM pricing is unfair because they charge different prices for the same technologies and products depending on who they sell them to. Along with a handful of other shady practices that allow them to double dip, unfairly cripple competition, etc.
[doublepost=1540671402][/doublepost]

So is Apple, Tim.
[doublepost=1540654943][/doublepost]

Site? You should become a teacher, lol!

OMG! Posting comments about people’s grammar instead of responding to the content of their post is hiLARious!

 

[macfacts]

The hell with Qualcomm. Apple should just not pay a single cent. Let them sue Apple again. ...

This is the problem, apple hasn't paid a cent and it has added up to $7billion now

 

[Chloros]

So apple isn't paying Qualcomm......went with cheaper intel chips and raised the prices on their top tier phones (Which should have the best parts). Wow

 

[sidewinder3000]

Seems black-and-white to me. They agree on a price, and Apple pays it. I don't get why Qualcomm claims Apple just didn't pay them $7B they must've agreed upon in written records.
[doublepost=1540658683][/doublepost]
Yeah, but Apple and Samsung's dispute wasn't over the phone supplies.
[doublepost=1540658829][/doublepost]
The issue isn't Qualcomm's prices being high. Apple claims that Qualcomm charges them extra, and there are other disputes.

The comparison you're making (assuming that's what you're doing) doesn't fit this situation well.

Did Apple negotiate a deal with a third party whereby you, in order to do whatever it is that you primarily do in order to generate income, are required to buy those things from Apple? And did Apple, in exchange for that (i.e., in exchange for you being required to buy those things from Apple) agree to do things certain ways? And did Apple then fail to do things those ways, fail to do the things it agreed to do in order to make it such that you had to buy certain things from it?

Further, did Apple do other improper (i.e. contract-violative and, in some jurisdictions, illegal) things which made it such that no one else would be able to sell you other things which you need?

If Apple didn't do those things (and more), then I don't see your comparison fitting the Apple - Qualcomm situation.



As I asked others before, what deal are you referring to? Apple doesn't have a direct licensing deal with Qualcomm. That's part of the problem. According to Apple, other industry participants, and various regulatory bodies, Qualcomm has refused to offer licenses to certain industry participants (to include Apple) on FRAND terms, even though Qualcomm is under contractual obligations to do just that.

Further, some of the deals Apple has had with Qualcomm have expired and that has factored into the timing of the recent legal actions.

To be clear, industry participants are allowed to use SEPs even if they don't have licensing agreements in place (and aren't currently paying licensing fees) if they are willing licensees. At some point, they and the SEP holders need to agree to licensing terms or a court (or some other entity) needs to decide what terms are proper.
[doublepost=1540665119][/doublepost]

Are you suggesting that both Apple and Qualcomm have lied in their court filings about whether they have a licensing agreement in effect?

We, of course, don't know the details of various agreements between the parties (or even, perhaps, of the existence of some agreements). But I think we can safely assume that, to the extent that both parties indicate in their respective court filings that certain things (which they are both in position to have knowledge of) are true, those things likely are true.

Again, well said. We need more Carnigies in these forums and fewer mouth breathers and knee-jerk, partisan whiners. But I digress. Thanks for your expertise and calm, reasoned responses.

 

[TehFalcon]

Qualcomm doesn't rely upon one company to provide most of it's income.

Shakeup at executive level... because Apple and China are extorting the company? The current CEO prevented a hostile takeover by China (Broadcom), but admittedly he was screwed by the Chinese blocking a Qualcomm takeover of NXP.

It is not double dipping because the patents that Apple is violating have little to nothing to do with those chips. Apple is making lots of money profiting from technology developed by Qualcomm. Apple agreed to pay a certain amount and then skipped out on the bill. Dine and Dash is not cool when you are rich.

Them claiming "Apple is destroying their business" is what I was getting at by them relying on one company. It's just BS on their side to claim that.

 

[Wags]

I have no idea if true or not but sure would help Qualcomm’s situation with their investors or creditors to make a statement like that.

 

[psingh01]

So qualcomm wants a percentage cut out of every iphone sale and apple thinks its unfair?

Yet apple takes a percentage cut out of every appstore sale...

 

[JoshBoy]

I th

A deals a deal. Pay up Apple.

I'm sadly not surprise there are already a few people defending Apple on this.

I think what it doesn’t explain from I know is Apple was paying them then they were also charging other people in the supply chain and Apple said that their agreement. To pay covers anyone below them. So it’s not as simple as a deal is a deal, Apple interpreted the deal one way and the other party another.

 

[bayelrey80]

Apple is being shady? Omg, no way! Who would have thunk?

Riiiggghhhhtttt because everybody else soooo honest. So within a month, we've had the cofounder of Broadcom busted for drug trafficking, Google paying Andy Rubin $90 million after coercing an employee to have sex, Facebook hacked and leaking 30 million user's info AFTER the Cambridge Analytica scandal and Elon smoking a blunt on JRE after accusing a guy, who saved those people trapped in that cave, a pedo on Twitter bc hd didn't want to use his tinker toy. Nvm Qualcomm's greedy ass for trying to squeeze Apple, Samsung, etc. over their modems.

But yeah Apple is shady.

 

[341328]

Not good to rely on one company to provide most of your companies income.

If Apple is destroying their business they need a shake up at the executive level.

I agree with Apple they are double dipping. Greedy.

So you’d tell all iOS developers this?? Sure they might do android also but Apple is price gouging at 30%.

 

[Solomani]

"They're trying to destroy our business," Qualcomm lawyer Evan Chesler said at the hearing in federal court in San Diego. "They're now $7 billion dollars behind in royalties. The house is on fire and there is $7 billion of property damage right now."

The roof, the roof, the roof is on fire!

We don't need no water….

 

[bayelrey80]

So you’d tell all iOS developers this?? Sure they might do android also but Apple is price gouging at 30%.

App developers generally get paid more for iOS vs Android. And read up on Qualcomm, sounds like your disdain for Apple is clouding you from the fact that Qualcomm IS greedy. How do you explain charging more for components based on the selling price of the device? So you sell a modem used in a cheap phone at a set price and then have the audacity to charge that company more if they decide to use it in a more expensive phone? Seriously??? Qualcomm has had their head up their asses for a while and soon as Apple wins, best believe Samsung, Google, etc will be next taking their bite out of Qualcomm.
[doublepost=1540699887][/doublepost]

So qualcomm wants a percentage cut out of every iphone sale and apple thinks its unfair?

Yet apple takes a percentage cut out of every appstore sale...

Please explain your logic? So Qualcomm wants to charge MORE for a modem used in a Note 9 versus one used in a S9 because the Note 9 has a higher ASP, for ... the ... same ... component. They want a cut of every phone that's sold.

Apple maintains the app store, sets the rules/guidelines for app developers to follow, monitors the app store to make sure ******** apps aren't published and they pay THE MOST TO THE DEVELOPERS VS ANDROID. You didn't actually think Apple would provide that for free because Google sure as hell doesn't. At least Apple tries to enforce a privacy policy for app developers to follow.
[doublepost=1540700291][/doublepost]

So apple isn't paying Qualcomm......went with cheaper intel chips and raised the prices on their top tier phones (Which should have the best parts). Wow

Intel modems are cheaper?? Where is this information? They went with Intel as they were the only other option whom Apple had a relationship with that could produce modems at the volume Apple needed just so they could say "**** you" to Qualcomm.

And prices are more than the sum of the parts. Explain why Google charges $900 for a Pixel 3 XL...

You do realize Apple designs most of their hardware, especially their CPUs, AND has their own mobile OS AND provides retail locations AND support their products AND they do it without allowing carriers to load a ton of crapware on your phone? And they still
manage to spend tons on R&D while providing FREE OS updates that supports devices as far back as 4 years. Good luck getting software support on an Android beyond 2.

 

[TehFalcon]

So you’d tell all iOS developers this?? Sure they might do android also but Apple is price gouging at 30%.

Google charges 30% on the play store also, whats your point?

Apple isn't double dipping though. Qualcomm is making Apple buy the chips from them, and pay to license the use of them too. Should be one or the other.
[doublepost=1540700695][/doublepost]

Intel modems are cheaper?? Where is this information? They went with Intel as they were the only other option whom Apple had a relationship with that could produce modems at the volume Apple needed just so they could say "**** you" to Qualcomm.

Qualcomm themselves have said the Intel modems were cheaper for Apple. I for one support the change, it helps fuel competition by allowing Intel to put their feet in the mobile business more.

 

[Jimmdean]

There’s really no way for Qualcomm to come out on top in this one if they don’t make nice with Apple. The FTC here (and others abroad) know exactly what they have been up to. Eventually they’ll be found to have violated FRAND and all the dominos will fall. They’ll take a hit, but I expect them to stick around. They should think of the future and make nice with Apple - maybe drum up new business with them for their supposedly top-shelf tech.

 

[Technarchy]

Strangely, I don’t care who wins or loses this one.

 

[gnasher729]

I don’t agree with Apple’s pricing, but I don’t go in their store and take things without paying. Funny that they have no problem doing the same thing.

If you don’t like the deal, then try to renegotiate or wait until it is up. Withholding $7 billion in payments is not right. They need to get smacked down for this.

There _is_ no deal. Apple and Qualcomm are in court, and the court will decide how much Apple owns. 7bn is what Qualcomm wants in their wildest dreams. 0bn is what Apple is offering.
[doublepost=1540707152][/doublepost]

This is the problem, apple hasn't paid a cent and it has added up to $7billion now

7bn that Qualcomm asks for, not that Apple owes. Apple says they owe nothing. Qualcomm says seven billion dollars. It’s in court, and the court will decide.
[doublepost=1540707433][/doublepost]

So you’d tell all iOS developers this?? Sure they might do android also but Apple is price gouging at 30%.

Let’s say you have five apps in the store, and I buy one. Apple charges you 30% of the price of the app. Qualcomm would charge you 30% of the price of all apps, so if I bought an app, you would actually owe them money.

 

[SvenSvenson]

I agree with Apple they are double dipping. Greedy.

What do you base this statement on?