Qualcomm Seeks iPhone and iPad Import Ban in the United States

[iMi]

LOL!

The total economic impact of this for the US economy alone would be reason to throw this request out.

So, if Apple is in fact violating patents we should just take the "too big to fall" approach and let them?

Besides, the impact would be insignificant. First of all, we are a massive economy and, second, consumers would seek out alternatives. Large percentage of sales foregone by Apple would be shifted to others.

Apple is not invincible. They are not above the law and rules should still apply to them.
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I'm confused.

"Qualcomm is asking the ITC to block all iPhones that are equipped with LTE chips from competing mobile communications companies, which would include AT&T and T-Mobile iPhone 7 and iPhone 7 Plus models equipped with Intel chips, along with some iPad models."
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Qualcomm wants to ban anything except phones containing its chips? So the iPhone is allowed to be imported, as long as Apple uses Qualcomm's chips?

This doesn't sound like a royalty payment or a patent issue. It sounds like Qualcomm is upset that Apple can second-source the chips they need from Intel. The article doesn't seem to say that Apple is refusing to pay for use of Qualcomm chips; it seems to say that Qualcomm wants Apple to source their chips only from Qualcomm and pay the accompanying royalties.

If Intel made chips that enable the same features that Qualcomm has, shouldn't Qualcomm be going after Intel? If Intel produced compatible chips, shouldn't Intel pay Qualcomm royalties? If so, does Qualcomm get to double-dip and extract royalties from everyone who implements the competing chips as well?

Don't get me wrong, not defending either side here, Apple has done their fair share of deceptive and questionable business practices. Just trying to understand the specifics of this one.

It actually makes sense. I've seen a similar situation at work. We have created a specific mechanical design and some factory in China copied it. They sold it to a retailer here, but we had a patent in place. We had the same option to ask the government to stop imports as the product violated our design and we didn't grant a license. Thankfully the retailer made the right decisions and we didn't have to go that route.

This isn't any different from banning unlicensed or counterfeit products. The merits of their case will be decided by courts, but what they are asking is not that unusual.

 

[kdarling]

The total economic impact of this for the US economy alone would be reason to throw this request out.

Some of us remember that back in 2007, Qualcomm's chips were banned by the ITC for violating six Broadcom patents.

This meant that Verizon would soon have no new phones to sell. That would've had far more impact on the country than banning just one popular brand would have today, and yet the Bush administration refused to overturn the ban.

Verizon ended up negotiating their own payment of $6 per phone to Broadcom in order to get the phones imported.

Notice that averages $1 per patent. Qualcomm has thousands of patents in their license portfolio, and yet Apple balks at paying about $10 per phone for ALL of the ones needed for 2G/3G/LTE.

So what? It makes more sense to assemble the phone near where most of the parts are.

Since it's cheaper to ship packed parts than big finished unit boxes, no.

I don't care what Motorola CLAIMS they can do because it actually hasn't HAPPENED. Besides they aren't making iPhones, they're making low grade phones.

First off, the Moto X was not low grade. And it was Flextronics who said it would be no problem to ramp up production.

Do you even know who Flextronics is? They're the third largest ODM/OEM assembler in the world.

It's more efficient for Apple to make all their 50-80M iPhones PER QUARTER in a centralized location.

We're only talking about making phones for the US market, in the US.

Even if the iPhone cost $1 in R&D, that's quite disrespectful to the thousands of talented engineers that poured their heart and dedication into the iPhone.

Not sure what you're talking about as far as being respectful.

However, again your idea of what it takes to design and build a device is really exaggerated.

I've worked at companies where a handful, to a couple of dozen engineers and support staff, designed everything from the UI to electronics to the enclosures to the manuals, for major devices. Apple is just as capable.

From interviews we know that Apple only assigned about 100 people to the iPhone project. Even that was probably more than was needed, but they wanted to keep it compartmentalized to keep it secret. And that includes support staff such as secretaries, writers, managers, etc.

In any case, no sir, it was not thousands. Heck, as many other experienced people here can attest, using that many engineers would've only slowed down such a fast track project!

 

[MrX8503]

Since it's cheaper to ship packed parts than big finished unit boxes, no.

It's not just about cost, it's about what's easier logistically. Plus it doesn't take prototyping into account. It's easier for Apple to have the parts near the assembly plant. What's happening in Brazil is that the phones are being shipped there mostly assembled and then low level factory workers put it together.

First off, the Moto X was not low grade. And it was Flextronics who said it would be no problem to ramp up production.

Do you even know who Flextronics is? They're the third largest ODM/OEM assembler in the world.

Yes it is low grade and they're doing low level assembly.....just like in Brazil. Lets say Apple is able to do that, they're still crap seasonal jobs.

We're only talking about making phones for the US market, in the US.

I know, my statement still applies. Why would Apple bend over backwards to create very few jobs that would be seasonal in the US? They've already created millions of programming jobs by extension of the App Store. No one talks about that though because it's not "American" manufacturing?

Not sure what you're talking about as far as being respectful.

However, again your idea of what it takes to design and build a device is really exaggerated.

I've worked at companies where a handful, to a couple of dozen engineers and support staff, designed everything from the UI to electronics to the enclosures to the manuals, for major devices. Apple is just as capable.

From interviews we know that Apple only assigned about 100 people to the iPhone project. Even that was probably more than was needed, but they wanted to keep it compartmentalized to keep it secret. And that includes support staff such as secretaries, writers, managers, etc.

In any case, no sir, it was not thousands. Heck, as many other experienced people here can attest, using that many engineers would've only slowed down such a fast track project!

You're trying to dilute the innovation that is the iPhone by putting a number on it, when the cost of the project is not an accurate indicator of the work/talent involved.

Early iPhone, yes it was a 100 or so, but everything we know about the iPhone today is due to thousands of engineers as Scott Forstall said.

Your $150M figure, although correct, is a feeble attempt at undermining the iPhone's success.

 

[kdarling]

You're trying to dilute the innovation that is the iPhone by putting a number on it, when the cost of the project is not an accurate indicator of the work/talent involved.

Errr.... you're the one who tried to put a number on it

I don't think that a project has to have "thousands of engineers" and spend "billions of dollars" to be impressive. Quite the contrary, in fact.

Your $150M figure, although correct, is a feeble attempt at undermining the iPhone's success.

Nonsense. If anything, it's more more impressive with a smaller group and budget.

 

[cmaier]

So, if Apple is in fact violating patents we should just take the "too big to fall" approach and let them?

Besides, the impact would be insignificant. First of all, we are a massive economy and, second, consumers would seek out alternatives. Large percentage of sales foregone by Apple would be shifted to others.

Apple is not invincible. They are not above the law and rules should still apply to them.
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It actually makes sense. I've seen a similar situation at work. We have created a specific mechanical design and some factory in China copied it. They sold it to a retailer here, but we had a patent in place. We had the same option to ask the government to stop imports as the product violated our design and we didn't grant a license. Thankfully the retailer made the right decisions and we didn't have to go that route.

This isn't any different from banning unlicensed or counterfeit products. The merits of their case will be decided by courts, but what they are asking is not that unusual.

The impact on the economy and consumers is actually an important consideration in ITC actions and court injunctions. This is because the alternative is not "apple gets off for free" but is "apple pays the patent holder money as damages."
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Apple needs to pay what they agreed to and stop bullying their suppliers.

So Qualcomm doesn't need to pay apple the billion dollars it agreed to?

 

[tooltalk]

Apple won't try to "Squeeze" Qualcomm if Qualcomm didn't originally stop giving Apple the quarterly kickbacks for over a year, as its way of punishing Apple for cooperating with South Korean government's anti-monopoly investigation against Qualcomm.

Don't kid yourself. Apple is not only disputing the contract over rebates, but they are also challenging Qualcomm's whole licensing model (eg, royalty base, FRAND).

I just finished reading Qualcomm's complaint and I must say I'm impressed with Apple's ploy to screw Qualcomm. They definitely have thought long and through on how to go about it. Long story short, Apple proposed the exclusivity in exchange for rebates first; then it turned around and told regulators that Qualcomm forced Apple into the exclusivity and prevented Apple from working with Qualcomm's competitor. While all this was going on, Apple was also working with Intel, Qualcomm's competitor, and released new iPhone just a few weeks after it voluntarily gave adverse, misleading testimony before KFTC. You can't make this sh*t up. I'm also guessing Apple went begging for Obama's divine intervention again and USFTC's lawsuit was a parting gift from Obama in coordinated attack against Qualcomm.

I've been following Apple's lawsuits with its competitors and suppliers and, while this doesn't surprise me, seriously, these guys are scumbags.

 

[cmaier]

Don't kid yourself. Apple is not only disputing the contract over rebates, but they are also challenging Qualcomm's whole licensing model (eg, royalty base, FRAND).

I just finished reading Qualcomm's complaint and I must say I'm impressed with Apple's ploy to screw Qualcomm. They definitely have thought long and through on how to go about it. Long story short, Apple proposed the exclusivity in exchange for rebates first; then it turned around and told regulators that Qualcomm forced Apple into the exclusivity and prevented Apple from working with Qualcomm's competitor. While all this was going on, Apple was also working with Intel, Qualcomm's competitor, and released new iPhone just a few weeks after it gave adverse, misleading testimony was made before KFTC. You can't make this sh*t up. I'm also guessing Apple went begging for Obama's divine intervention again and KFTC's lawsuit was a parting gift from Obama in coordinated attack against Qualcomm. Seriously, these guys are scumbags.

The Supreme Court agrees that Qualcomm's business model doesn't work. (Impression Products v. Lexmark). Samsung, Intel and the FTC agree that Qualcomm is violating antitrust laws. South Korea fined Qualcomm nearly a billion dollars for antitrust violations just in Korea.

But it's apple that is making this stuff up. Sure.

 

[tooltalk]

The Supreme Court agrees that Qualcomm's business model doesn't work. (Impression Products v. Lexmark). Samsung, Intel and the FTC agree that Qualcomm is violating antitrust laws. South Korea fined Qualcomm nearly a billion dollars for antitrust violations just in Korea.

But it's apple that is making this stuff up. Sure.

care to explain why the Lexmark decision is relevant here? The Lexmark decision forbids companies from imposing restriction after a product sale since a patente owner's rights are now exhausted. Qualcomm doesn't automatically grant their licenses with the sales of their chips.

 

[cmaier]

care to explain why the Lexmark decision is relevant here? The Lexmark decision forbids companies from imposing restriction after a product sale since a patente owner's rights are now exhausted. Qualcomm doesn't automatically grant their licenses with the sales of their chips.

Qualcomm requires apple to take a license even if apple uses qualcomm's chips. The fact that they don't automatically grant the license with the chip sale is precisely the problem. Once the chip is sold (to Foxconn or apple) Qualcomm has no right to assert patent infringement for products infringed by the use of those chips. Apple explains this in their first amended complaint, by the way.

 

[szw-mapple fan]

It was a ridiculous over ruling, I literally do not know of any other company that has gone crying to the leader of its home country when they lose in court, a court which by all intense and purposes based its judgement on fair and reasonable evidence, a court bound by law and sworn oaths.
It has absolutely NOTHING to do with it being America, because like I stated, I do not know of any other company that has done what Apple did.... or are you implying that Apple is some sort of higher level of American compared to other companies like Qualcomm?

I'm saying overruling in this case would not likely happen because they are both American companies and the government would be less likely to favor one over the other whereas in the Samsung case it was an American company vs a foreign one.

 

[MrX8503]

Errr.... you're the one who tried to put a number on it

I don't think that a project has to have "thousands of engineers" and spend "billions of dollars" to be impressive. Quite the contrary, in fact.



Nonsense. If anything, it's more more impressive with a smaller group and budget.

To refute your number.

 

[LordVic]

Qualcomm requires apple to take a license even if apple uses qualcomm's chips. The fact that they don't automatically grant the license with the chip sale is precisely the problem. Once the chip is sold (to Foxconn or apple) Qualcomm has no right to assert patent infringement for products infringed by the use of those chips. Apple explains this in their first amended complaint, by the way.

at first I was leaning towards Apple in this case because of this.

However, After reading the history of CDMA and what the license is for, Apple's actually on dangerous ground here. Not saying they're wrong. There could be more in the background

We seem to be conflating that Apple's paying licenses to Qualcomm directly for Patents on the modem. This is the confusion I was having.

This has nothing to do with the modems themselves.

So, the history of Qualcomm actually starts to make a little more sense. Whether or not QC is asking reasonable money, that's up to the courts to decide.

But essentially, What QUalcomm has the patent for that they charge license to is the CDMA technology itself (which they actually invented).

Back in the 80's, Qualcomm spent millions/billions on building hardware to monitor and detect satelites. Using this they discovered a patern and was able to invent the algorithm that allowed them to then invent the CDMA network itself.

This is what they have a patent on. Anyone who uses CDMA technology today, is using their algorithm and technology which they invented. So, QC asks for anyone who wants to use CDMA, to pay a license, on what they invented.

So fast forward today. Apple themselves don't actually have this license. They're not paying QC directly for this. Their manufacturers, however, who build CDMA phones pay the license, which is passed through to the buyer (Apple).

What Apple has decided is they don't want this license to be paid. They don't believe QC's invention of CDMA is important enough to the iPhone to warrant paying this license.

So, they demanded that QC repay them the license fees that were passed to them as form of "Rebate". QC said "No ****ing way". so Apple leveraged their manufacturers to stop paying QC their licenses (which some had been paying since the 90s)

At the end of the day, I believe Apple should back off the "not paying" aspect. Either they stop using CDMA and invent their own formula, or they pay the license.

They can argue and debate the license costs in court all they want since I'm pretty sure these patents are FRAND anyways. But they do not have the right to say that QC's technologies didn't help.

There would likely be no iPhone if QC didn't invent CDMA

 

[kdarling]

To refute your number.

Ah, now I understand. I was responding to Juan007, who was claiming that it took billions for Jobs to develop the iPhone in the first place. Instead, you're talking a total amount over the past ten years, I think.

The Supreme Court agrees that Qualcomm's business model doesn't work. (Impression Products v. Lexmark). Samsung, Intel and the FTC agree that Qualcomm is violating antitrust laws. South Korea fined Qualcomm nearly a billion dollars for antitrust violations just in Korea.

That's conflating a lot of different things.

The KFTC / USFTC is concerned about Qualcomm requiring full licensing, and not giving credit for mandatory cross licenses. Which actually makes some sense, even if it's changing the methods that have been in place for decades.

Everyone else is talking about wanting a license to go with a chip, but for what reason?
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Samsung's lawsuit claims that, "Despite having requested a license from Qualcomm, Samsung cannot sell licensed Exynos chipsets to non-Samsung entities because Qualcomm has refused to license Samsung to make and sell licensed chipsets."

That makes it sound at first like they can't sell chipsets at all. But that's just clever handwaving, as Samsung does indeed sell Exynos chipsets to at least Meizu and ODroid for their phones. Their price simply does not also include a Qualcomm license.
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Likewise, Intel has claimed that, "These practices have illegally coerced mobile phone manufacturers into purchasing the chipsets they need from Qualcomm and Qualcomm alone."

Wow, really Intel? So how did your baseband get into the iPhone? Magic?
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The upshot is that the lawyers for these companies are trying to make it sound like they're unable to sell their chips, when the reality is that non-Qualcomm chips are selling fine to phone makers. The real problem for Intel and the companies that quit making chips, is that few phone makers these days want to buy a STANDALONE chip instead of an INTEGRATED baseband + CPU package.

That's why MediaTek is outselling Qualcomm in China, with their combined chipset. Nobody wants a standalone baseband chip except Apple, and I betcha a zillion dollars they want to become integrated too.

Qualcomm requires apple to take a license even if apple uses qualcomm's chips. The fact that they don't automatically grant the license with the chip sale is precisely the problem.

Neither does it make any sense that it would. Otherwise the chipmaker would have to collect royalties from their customers and pass on the correct amount to Qualcomm based on the phone price. QCOM tried that before, and all that happened was the chipmakers often "forgot" to do so.

Instead, it makes far more sense for chipmakers to compete on chip price alone, and let QCOM collect their IP royalties directly from each phone maker, EXACTLY THE SAME WAY that Nokia, Ericsson, Motorola, Samsung, LG and everybody else with cellular IP does without chips.

You and I and everyone else, knows that the real reason behind this is Apple trying to get royalties tied to ever decreasing chip prices instead of to their ever increasing iPhone prices.

This is what they have a patent on. Anyone who uses CDMA technology today, is using their algorithm and technology which they invented. So, QC asks for anyone who wants to use CDMA, to pay a license, on what they invented.

It should be noted that every phone on the planet uses CDMA for 3G. Also, Qualcomm had a lot to do with LTE.