What do you mean? Qualcomm sells the modem chip and they manufacturer the chip and sell it to oems.
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Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies
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What do you mean? Qualcomm sells the modem chip and they manufacturer the chip and sell it to oems.
It sounds to me like Apple wants to be able to charge more for its phones than other companies but doesn't feel it should have to pay higher royalties to Qualcomm than them for the exact same technology (since the royalties are based on the total price of the phone for some reason). This seems reasonable to me, though I'm personally still not sold on a $1000 phone.
The basis of Standards Essential Patents is that you HAVE to license them because they’re part of the standard. That’s why Qualcomm is being sued by certain governments, because they’re using Standards Essential Patents as weapons.
There not wrong they have built the foundation of our whole wireless base and invented and own the tech we all use.
You notice why Verizon uses cdma? It's because for the last 15 years it's been damn right the best cell phone service and call quality over any other standard and Qualcomm owns that tech.
Why is it wrong for them to charge 15 bucks for the whole damn modem that includes all license to Qualcomm? The Intel modem sucks ass and won't work at all on Verizon.
And there's a nuanced aspect of the consideration which many gloss over or don't take into account at all.
An SEP holder isn't entitled to whatever additional value is created by their SEP's use in a standard. A lot of the value of such patents is created by their being part of a standard and the resulting reality that industry participants have to use those technologies rather than other possibilities which exist or which might have been developed.
If a given SEP (or group of SEPs) hadn't effectively been incorporated into a standard, what would it be worth? That varies considerably from SEP to SEP, but for a lot of them the value would be very small (or perhaps even nil, as there are already better ways of doing what they seek to achieve).
At any rate, U.S. courts have been clear in that SEP holders are not entitled to value which is created by their SEPs being parts of standards. They aren't entitled to compensation based on the reality that industry participants are required to use them because they are parts of standards.
While I do understand the difference between a FRAND issue and the voluntary use of the App Store, this is somewhat analogous to the 30% "Apple Tax" on payments for digital goods made through an app. If I buy a subscription to Microsoft Office or another vendor offering a digital good Apple is going to take its 30% vig based on the value of what I'm buying from the other company, not what Apple is contributing. Apple is essentially saying the same thing Qualcomm is, "The simple fact we facilitate the service is what makes the end product valuable. If it wasn't for us you couldn't do all the great things you do and we deserve to be compensated based on your revenue stream."
Apple is being hypocritical.
Apple is being hypocritical.
No, it is nothing like the App Store model. You say you understand the difference between a SEP/FRAND issue and choosing to go to an App Store, but you clearly either don’t or you’re just arguing because you can. I can use a phone without ever touching the App Store. Try using a phone without the SEP around 3G or CDMA. You probably won’t be able to do these things like "make a phone call".
"Qualcomm Says Its Innovations Are At the Heart of Every iPhone
...snip...
Qualcomm's patented inventions make possible not only connectivity and high-speed data transmission across mobile networks, but also high-precision GPS navigation, app store operations,
...snip..."
So are they going after Verizon and AT&T then since their inventions are at the heart of every call? The possibilities are endless.
...snip...
Qualcomm's patented inventions make possible not only connectivity and high-speed data transmission across mobile networks, but also high-precision GPS navigation, app store operations,
...snip..."
So are they going after Verizon and AT&T then since their inventions are at the heart of every call? The possibilities are endless.
Right.
Also this insane idea that they are entitled to a % of the entire sale and not just the cost of the component they are responsible for is one of the key reasons we don't have a glut of LTE-capable macbook pros, surfaces, etc. It's harmful to the advancement of technology.
Neither did Qualcomm. The question remains, should the royalties for the radios in a smartphone be based on the entire value of the smartphone, which contains a wide range of patented technologies that Qualcomm does not own?
This approach made more sense in the days of flip phones, when the current royalty system was hammered out - there was far less of a price spread between the cheapest and most expensive phones, and the other features of the phone were so poorly executed (horrible cameras, unusable web browsers, awkward to use autodialers, etc.) that they added little perceived value in the eyes of the public. The rise of the smart phone allowed the phone makers to add features that enhanced the perceived value of the device to consumers - cameras good enough to replace their point-and-shoots, CPUs capable of supplanting desktop computers, music players that could replace their standalone iPods and Zunes, displays large enough to show movies and personal photo albums, enough Flash storage to hold it all... It doesn't matter who invented any one of those capabilities, what matters is that Qualcomm believes it's due a royalty on all of it.
Sure, telecommunications still sits at the core of the device - without communications there is no web browsing, no photo sharing, no music streaming. It's not a matter of whether the patents are unimportant, but rather whether they're all-important.
Imagine if someone held a fundamental patent on the automobile tire. Without it, no vehicle could move. Would it be justifiable for the tire-maker to assess a percentage royalty on the value of the car - the leather upholstery, air conditioning, optional V-8 engine, Bose entertainment system, anti-lock brakes, emission controls...? Or is it more justifiable to build it into the price of the tires?
That would be like requiring every cell phone owner to acquire a license from Qualcomm.
Carriers do not pay a license directly to Qualcomm. The equipment they buy includes the cost of the license.
The manufacturer of the equipment is responsible for the license costs.
Apple is the hardware vendor and they are responsible for acquiring the licenses needed to make their phone function correctly.
As I understand the case, Apple doesn't have an issue with paying for the required licenses. They just don't think the payment should be based on % of the entire device, that they shouldn't have to pay for licenses twice (themselves and built into the price of the components they purchase), and that Qualcomm is charging a more than FRAND rate for their patents.
I think that's the point ...they did sign a deal, except Apple no longer thinks it's reasonable
You're misinformed if you think the the difference between the two radios is 1% in real world scenarios. Theoretical max isn't everything.
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Qualcomm will soon discover they have no friends in the industry. They've been milking it long enough. Nobody says they shouldn't be paid. But they've been gouging, which is clear once Intel entered the market.
Not unlike Apple's App Store receiving a 30 percent take for 99¢ and $4.99 apps alike, even though the provided service is the same for both.
What a well-crafted intentionally misleading statement!
The phrase "make possible" is the key, so that he can basically list all technologies that involve data transmission, and that's where its role ends, for all of the long technologies he lists in the second half (after "but also") of his sentence. He is such a great lawyer -- blatantly lie using factual statements.
And, "less than what Apple charges for a single wall plug."? Sure, go ahead and set up a retail network and retail your patents at the same price, see how the retail costs make you bankrupt in just several weeks!
The phrase "make possible" is the key, so that he can basically list all technologies that involve data transmission, and that's where its role ends, for all of the long technologies he lists in the second half (after "but also") of his sentence. He is such a great lawyer -- blatantly lie using factual statements.
And, "less than what Apple charges for a single wall plug."? Sure, go ahead and set up a retail network and retail your patents at the same price, see how the retail costs make you bankrupt in just several weeks!
Apple doesn't pay twice as they claim.
The license to manufacture the chip does not include a license for the software.
Apple pays two separate licensing fees... one for the hardware and one for the software.
Apple wants the chip maker to incur the full cost of the licensing and then pass that cheaper fee onto Apple as part of the device fee. It would be cheaper because Qualcomm charges the software fee based on the device total cost.
If the fully licensed device is only the chip, the fee would be MUCH smaller.
This is why Qualcomm splits the licensing. It's more profitable for them.
The key is not the sales price of the product, but the product's nature. For dumb phones (some sells for $20, some for $100), the cellular technology is the only core technology, while for smartphones, the cellular technology is just one of the ever growing numbers of multiple core technologies. In some sense, the cellular technology is not even the most important core technology in the smartphones. As a result, it is definitely wrong for the cellular technologies to charge the same royalty rate against smartphones as against dumb phones.
Further more, given the fact that the industry is introducing more and more core technologies into smartphones, the idea of calculating cellular technology royalties on the full price of the smartphones should actually be revised.
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When did Apple say that? I never see news about Apple making this obviously wrong statements.
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I totally side with QC here. I say their licensing terms are very FR. It enables manufacturers to use state of the art tech in cheap phones. It's not QCs fault that Apple only makes extremely expensive phones.
I guess the reason no one else is complaining is that all other manufacturers have a diverse portfolio of products ranging from dead cheap to expensive and dead cheap is where the volume's at.
If Apples gets their way, QC will have to raise the price significantly on the chip as it will include the software license and considering the R&D costs they put into their technology, that will still be considered FR. That would mean that small manufacturers with only cheap phones and small margins will be pushed out of business as they will not be able to afford to use QC tech in their products.
This is not Apple being on the side of the consumer to get lower prices on parts and pass on those savings onto their customers, oh no. They see a possibility to both widen their margin while at the same time get rid of competition.
I guess the reason no one else is complaining is that all other manufacturers have a diverse portfolio of products ranging from dead cheap to expensive and dead cheap is where the volume's at.
If Apples gets their way, QC will have to raise the price significantly on the chip as it will include the software license and considering the R&D costs they put into their technology, that will still be considered FR. That would mean that small manufacturers with only cheap phones and small margins will be pushed out of business as they will not be able to afford to use QC tech in their products.
This is not Apple being on the side of the consumer to get lower prices on parts and pass on those savings onto their customers, oh no. They see a possibility to both widen their margin while at the same time get rid of competition.
That's why Apple also needs to pay royalties to the company who invented this technology, and a list of other important technologies that make the whole smartphone idea possible. Or at least, Apple trades their own royalty rights with some of these companies.
With smartphones cramming so many important technologies together, if all of them collect royalties in the same way as Qualcomm, the whole smartphone idea has to die, because it bounds to negative profit.
You're a very astute individual.
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Yes, let's all not forget that Apple is only one of several similar suits against Qualcomm. QC has in a put themselves in this corner.
Apple gets 15% of the recurring subscription charges, but 30% of the one-time purchase charges.