Apple Wanted To Use Qualcomm Chips For Its 2018 iPhones, But Qualcomm Refused Because of Companies' Licensing Dispute (cnet.com) 144
Apple's operating chief said on Monday that Qualcomm refused to sell its 4G LTE processors to the company due to the companies' licensing dispute. According to CNET, that decision "had a ripple effect on how quickly Apple can make the shift to 5G." From the report: Qualcomm continues to provide Apple with chips for its older iPhones, including the iPhone 7 and 7 Plus, Apple COO Jeff Williams testified Monday during the US Federal Trade Commission's trial against Qualcomm. But it won't provide Apple with processors for the newest iPhones, designed since the two began fighting over patents, he said. And Williams believes the royalty rate Apple paid for using Qualcomm patents -- $7.50 per iPhone -- is too high.
The FTC has accused Qualcomm of operating a monopoly in wireless chips, forcing customers like Apple to work with it exclusively and charging excessive licensing fees for its technology. The FTC has said that Qualcomm forced Apple to pay licensing fees for its technology in exchange for using its chips in iPhones. The trial kicked off Jan. 4 in US District Court in San Jose, California. Testimony covers negotiations and events that occurred before March 2018 and can't encompass anything after that date. Apple is expected to only use Intel chips in its next iPhones, something that will make Apple late to the market for 5G phones. "By the 2019 holiday season, every major Android vendor in the U.S. will have a 5G phone available," reports CNET. "But Intel's 5G modem isn't expected to hit phones until 2020."
The FTC has accused Qualcomm of operating a monopoly in wireless chips, forcing customers like Apple to work with it exclusively and charging excessive licensing fees for its technology. The FTC has said that Qualcomm forced Apple to pay licensing fees for its technology in exchange for using its chips in iPhones. The trial kicked off Jan. 4 in US District Court in San Jose, California. Testimony covers negotiations and events that occurred before March 2018 and can't encompass anything after that date. Apple is expected to only use Intel chips in its next iPhones, something that will make Apple late to the market for 5G phones. "By the 2019 holiday season, every major Android vendor in the U.S. will have a 5G phone available," reports CNET. "But Intel's 5G modem isn't expected to hit phones until 2020."
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"ampathetic "?
So's your spelling!
He takes an "open" approach to spelling.
It's called hypocrisy (Score:2)
Can you imagine how much Apple would appreciate it if I insisted that they should give me an iPhone Xs for $200 (what I arbitrarily deem to be a reasonable price) and then be surprised that Apple wouldn't give it to me for that price.
This is no different.
Apple may have lucked out a bit here (Score:5, Insightful)
It seems like the whole 5G rollout thing is becoming a bit of a mess, maybe delivering 5G in 2020 is not so bad as most people are pretty happy with LTE speeds now and the question of you are getting 5G or not will have been resolved by then, along with somewhat expanded networks.
I will say that Qualcom chips did seem like they were more stable though, so from that aspect Apple has been hurt by this...
It's proven for sure that Apple is right to want to take all chip design in-house.
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then why go with the intel chip, I am sure we all really needed IME on our cell phones
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then why go with the intel chip
It's not like Apple can design the cellular modems over night, so until they can come up with something good the next best thing is to go with a medium term more stable competitor that will actually sell them chips.
Maybe in five years we'll see an Apple part replacing this...
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Qualacom has alleged in court filings that Apple provided Qualacom trade secrets and code to Intel to help intel improve their modems. This data had been transferred to Apple for evaluation for future products.
If it was my company and I believed that had happened I wouldn't sell Apple chips for new stuff either. They would want to evaluate the product and then they'd hand all the IP over to intel.
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The enormity of making your own 5G chipset is underappreciated I think.
First you need to licence all the necessary patents. Normally it doesn't cost you anything because you just licence your own patents in return, but Apple doesn't have any patents relevant to the owners of 5G tech so they will have to pay licencing fees.
Then you need to get the talent. Obviously such people are in high demand and their employers won't give them up easily.
Then you need to do the actual design and figure out how to fabricat
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The enormity of making your own 5G chipset is underappreciated I think.
First you need to licence all the necessary patents.
And that's where your arguments already fails spectacularly - because Qualcomm refuses to give out licenses to competing chip makers.
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It has to, otherwise those patents can't be part of the 5G standard. The deal is that if patents are going to be part of the standard they must be licences under reasonable and non-discriminatory (RAND) terms.
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It has to, otherwise those patents can't be part of the 5G standard
Exactly, and that's why the FTC is suing Qualcomm, because they violate that principle (and then some). Haven't you been paying attention?
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It seems like the whole 5G rollout thing is becoming a bit of a mess
In what regard? It looks just like any other technology transition so far, and that even includes companies lying about their technology.
Better question: With phones no longer being yearly disposable devices does it make sense for Apple to continue to always adopt the latest modem last as they have done with all previous changes in technology? It may be far more than 1 year that you will be waiting.
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Specialists are better at first (Score:5, Interesting)
What? You don't think companies that specialize in a specific area are better at it than generalists?
That depends.
I agree that specialists can be better.
But don't you think it's also true with that specialists without strong competition can grow weak and lazy until suddenly someone comes along with better tech?
That's kind of where I feel like Qualcomm is at, yes they are clearly the best now, but I'm not at all sure it's impossible to dethrone them.
And there have to be many other companies besides Apple chafing at the bit for a strong competitor so Qualcom cannot hold cell phone makers hostage (not talking just Apple here)...
So please, do take it inhouse to save just $2 off of a $1200 phone.
The cost is not at all why, since with R&D costs it would probably cost way more.
The reason would be is if you could provide equivalent or superior quality of service in your own part, without being at the whims of a chip maker who has proven they are willing to withhold supply... and of course there's the matter of being sure as to what supply could be, rather than being taken out by a sudden shortage.
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No-one is going to challenge Qualcomm for 4G. When 5G arrives it will be the Chinese manufacturers that are the main competition for performance AND cost, but some western governments are trying to scupper them with national security concerns.
Intel is unlikely to catch up and has a fairly weak 5G patent portfolio so won't even be able to licence their way in. They will stick to what they are good at, which is providing OEMs with parts that are decent but not the best.
So Qualcomm is in a very strong position
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The cost is not at all why, since with R&D costs it would probably cost way more.
The reason would be is if you could provide equivalent or superior quality of service in your own part, without being at the whims of a chip maker who has proven they are willing to withhold supply... and of course there's the matter of being sure as to what supply could be, rather than being taken out by a sudden shortage.
Not only would Apple be demonstrating real courage in not producing a 5G phone until 2025, I can all but guarantee that once they release a 5G phone in 2025, they will be the first to do so, beating all those 2020 Android phones by at leas -5 years.
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The cost is not at all why, since with R&D costs it would probably cost way more.
Qualcomm is willing to withhold supply because Apple isn't willing to pay more. So it is pretty much about money.
That's how it works. If you refuse to pay the asking price you don't get the product.
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Apple charges the highest price hey can get away with
The difference is: Qualcomm asked for more than they could get away with. Whoops, there goes your billion dollar contract.
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Would that in turn drop the end price 2$? Any dollars? No? Fucks not given.
They'd probably put it up.
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Yup, go ahead. Enjoy the inferior tech!
What? You don't think companies that specialize in a specific area are better at it than generalists? Enjoy the shittier Intel generalist modem on the current gen too. :)
Your point must be that a company that bought a the part of a company that specialized in wireless technology must make better wireless technology than one that became famous for their mail client.
PS: before you try to correct me: I know. The OP doesn't. That's why I am making fun of his argument. It's a joke. Get it yet?
2019 will not see widespread 5G rollouts (Score:4, Interesting)
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yes but the real issue here is that apple will then have to couragify its 5g rollout a bit later than everyone else and they are already projecting looses in hardware market. without the coolest new tech... it would look more bleak.
Kinda Sorta (Score:3)
The really high speed 5G will only be in cities and more densely populated areas. The long range 5G based on existing cell towers will be rolled out everywhere. It will offer marginally faster speeds, though from what I've read the main benefit is better channel management, meaning towers will be able to pump out more speed overall.
OMG (Score:3, Funny)
Can we ever survive without 5G on iphone 9? Crapdroids will have it! OMG OMG! How can the world survive without 5G on iphones??? no gigabit speed!!! no 8k!!!
Ten pounds of **** in a five pound bucket (Score:2)
no 8k!!!
Indeed, Apple will be forced to leaving downloading 8k content to watch on 4K screens the size of your hand to all the Android phone makers. :-)
Patents grant monopolies (Score:2)
Isn't that the intention of patents? They grant a limited-time monopoly (in exchange for the design details being made public).
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How dare you sully a Slashdot thread with facts?
Re:Patents grant monopolies (Score:4, Insightful)
Isn't that the intention of patents? They grant a limited-time monopoly (in exchange for the design details being made public).
No. Patents give you a limited monopoly. It is not illegal to have a monopoly.
It is illegal to ABUSE a monopoly through market manipulation, exclusive distribution deals, coercive licensing, and predatory pricing.
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If apple doesn't like the price they can buy from any other LTE vendor.
... or they can sue Qualcomm for anti-competitive behavior.
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Apple pays for the qualcomm chips, like everyone else. But then has to pay qualcomm a patent license for using those qualcomm chips.
As a patent holder you can have any kind of license you want and change the rules any time you want.
As the owner of a standard essential patent, you (usually) can't.
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Patents give you a limited monopoly. It is not illegal to have a monopoly.
It is illegal to ABUSE a monopoly through market manipulation, exclusive distribution deals, coercive licensing, and predatory pricing.
Intel is second supplier, and going by the article would normally supply about half the modems for each iPhone model. That means Qualcomm (QC) does not have a monopoly.
There's more details in the article about how QC (and other manufacturers do this too) price the cost of using their technology based
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It is not illegal to have a monopoly.It is illegal to ABUSE a monopoly through market manipulation, exclusive distribution deals, coercive licensing, and predatory pricing.
No it's not, not in the US anyway. It's illegal to leverage a monopoly to take control of another market or product. Otherwise there is nothing illegal about a monopoly in the US at least. I suggest you evaluate the Sherman Anti-Trust law and the case law behind it. There's nothing illegal about obtaining a trust, or abusing customers afterwards. It's only illegal to use that monopoly to enter another market or service.
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Isn't that the intention of patents? They grant a limited-time monopoly (in exchange for the design details being made public).
No. Patents give you a limited monopoly. It is not illegal to have a monopoly.
It is illegal to ABUSE a monopoly through market manipulation, exclusive distribution deals, coercive licensing, and predatory pricing.
It's not illegal to do so through a patent, though. The patent owner is under no obligation to be reasonable with their patent. They can outright refuse to license the patent to one company while giving it away for free use to another.
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So... Has any other phone maker complained about the payment to Qualcomm to the point of withholding payment?
No, for that they are are too afraid. But Samsung, Google, & others formally back Apple in legal dispute with Qualcomm [reuters.com]
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Sure, they'd all love to pay less! I'd love not to have to pay a $4 "license fee" to Apple
Stop lying. You keep insisting that you'd never buy something from Apple, so don't pretend you would so you cn whine about their prices. You lame little liar boy.
Thanks for admitting you were wrong by lying though.
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I don't buy Apple products - you are correct. However, I design plenty of audio products for companies that do Apple-based products. Headphones, amplifiers, microphones, etc.
Please warn us which companies you work for.
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Isn't that the intention of patents? They grant a limited-time monopoly (in exchange for the design details being made public).
Yeah, but then those pesky standards with their silly FRAND terms come in and ruin the racket. Companies with patents should be able to force other companies to license them even without standards that require them.
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I wouldn't consider that a monopoly, and if the phone OEMs prefer the Qualcomm chipsets then that's just because... maybe they are really better for that phone OEM's purposes?
Do you actually believe Samsung chooses to use a Qualcomm SoC over their own in their Galaxy Sx Smartphones in a few countries because they are better? What makes them better in that handful of countries?
I'm sorry, but how is this an issue? (Score:2, Insightful)
Re: I'm sorry, but how is this an issue? (Score:4, Informative)
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If what I read a while back is true, not only the $7.50 per chip, they then have to pay a larger royalty/percentage if they charge more for the phone in question... So, they can be selling a 6S and pay the $7.50... for a $400 phone, but then Qualcomm can charge them MORE if they put the exact same chip, doing the same thing into an iPhone XRPlus (That sells for $1200) or whatever, with the bigger screen an triple the memory... I think it's this that Apple had a problem with. So Qualcomm is saying using thei
License Fees? (Score:1, Insightful)
The FTC has said that Qualcomm forced Apple to pay licensing fees for its technology in exchange for using its chips in iPhones.
Am I missing something? Isn't that how licensing works?
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There's only one thing missing from your analysis, and that's the FRAND contract Qualcomm agreed to when their patent-encumbered designs were selected for the LTE standard. Apple's argument is that the deal they're getting from Qualcomm isn't fair, reasonable, or non-discriminatory. I'm not sure if it is or if it isn't, but there's certainly enough gray area to dispute that this is all Apple's fault, hence the lawsuit.
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Apple are the only ones, everyone else has the same deal.
So it's non-discriminatory.
You can argue that 1.5% is or is not fair and reasonable for the cellular modem in a cell phone.
Apple is just pissed the illegal agreement Qualcomm gave them to exclude Intel & others has finished, along with the cash payments they were getting from Qualcomm.
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Is it the same deal that other phone makers get? Then it's fair (Apple agreed to it right up front), reasonable (all others - dozens of them - pay it), and non-discriminatory (all others pay the same basic rate).
Is it though? Do you know because you shill for either company (well Qualcomm obviously)? Or are you just talking out of your ass?
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I haven't heard otherwise - Apple's never complained they are getting a different deal, just that they "pay too much". They've never asserted they are paying terms more than others - and the onus is on the accuser.
Well, you are right in so far that Apple doesn't explicitly say so. Because nobody but the different customers can actually tell what their deals are - at least when they don't buy Qualcomm chips. Explained here [patentprogress.org].
But of course that ignores that the FTC anti trust case against Qualcomm - the very case this article is about - alleges that Apple got a different deal than others and had to pay less for making Qualcomm their exclusive supplier. IOW, you are wrong, Qualcomm does not give everyone the same deal.
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Having a case filed in FTC does not mean the charges are good; there is still due process in the world (or there used to be). I'll wait until there is a decision. Until then - it's really just Apple bitching about the terms, the same terms everyone else pays. And terms that are LESS onerous than Apple's own terms to use their IP.
And again you are ignoring that there already was a (preliminary) ruling in this very case 2 months ago, that Qualcomm had to license their patents to competing chip makers because their obvious disregard for anti trust law was so blatant. Stop being such a shill.
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Yes - and that ruling has nothing to do with the costs that Apple pays relative to others.
Nobody said it did, liar boy. It just proves you defending a bunch of criminals, who you all but admitted pay you for posting here.
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Potentially $15 on a $1000 phone. It was $7.50 back when iPhones only cost $500.
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Wow, poor Applel...that's liable to drain their cash reserves in about 50 million years.
Well, that would be 350 million US$ last quarter alone - many companies have literally killed for less.
Qualcomm (Score:2)
1.5% (Score:3)
Qualcomm wanted 1.5% of an iPhone Xr ($499).
Which Apple deems to be too much.
But Apple will happily take 15% from a app sale without any negotiation...
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Solution (Score:2)
Allow third parties to sell computers and phones based on Apple chips.
Whatâ(TM)s good for the goose ought to be good for the gander.
$7.50 per iPhone is too much??? (Score:3)
Seriously? On $1000 devices that cost them $300 to make? And I assume this is some sort of actual/essential technology, they are not seeking to license gestures or shapes, correct? And from a company that keeps 30% of developer earnings (a bit more, devs also pay currency conversion, I end up with closer 66% of revenue)?
Apple never ceases to amaze me with their hypocrisy and audacity.
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The license cost is for a patent pool that is still quite generic and is on top of the actual chip and its cost.
Apple and Qualcomm have negotiated license exchanges but Apple seems to have nothing that Qualcomm wants except a boat load of money. Apple could pay it but then all its suppliers will start charging a shakedown/licensing fee.
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They want 1.5% of the sale price for the technology that makes a cellphone a cellphone.
The same rate everyone else pays.
I guess Apple didn't think it was fair that just because they jack up the retail price, they should pay more for the primary feature. The thing that differentiates an iPhone from an iPod.
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Qualacom's patents are essential to all cellular networks. If you want to use a cellular service that's digital you have to license Qualacom's patents. They are the guys that control about 50% of the entire patent pool on digital networks. Asking for $7.50 is FRAND IMO, now if they were asking for $75.50 it might be a different story but hell, it's under $10 for world changing technological advances.
Not feeling it, sorry (Score:1)
Apple jacks up the price of the iPhone, then raises a stink that one of their parts suppliers is jacking up their prices, too? Oh, the irony.
They're just delivering you more value, or whatever bullshit excuse you used for your price increase, Apple. Capitalism 101, baby.
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No, their supplier wants to charge them the same they charge all the other OEM's.
They had a deal which is the subject of an anti-trust suit in EU. The deal is long over so Qualcomm wants its standard rates. Apple wants to keep its old "exclusive qualcomm rates" without the anti-trust exclusive part.
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No, their supplier wants to charge them the same they charge all the other OEM's.
But Qualcomm isn't their supplier. They are the patent troll that double dips on their patents - hence the anti trust suit this article is about.
Intel's 5G modem wont hit phones unitl 2020 (Score:2)
With Apple as a paying customer Intel would move that up significantly. Heck they might even hire 3 more engineers.
har har (Score:2)
When Intel's modem comes out in 2020, it won't be as good as the 2019 Qualcomm ones either.
They may make decent CPU's but Intel suck at modems.
Please, enlighten me... (Score:2)
Let's say the Qualcomm chip cost $30. If the licencing fee is $7.5 per chip that means the chip really cost $37.5. Why does Qualcomm call it a licencing fee? It's simply the price of the chip.
I think Apple does not have to pay this fee annually or something after they sold the phones to customers.
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Let's say the Qualcomm chip cost $30. If the licencing fee is $7.5 per chip that means the chip really cost $37.5. Why does Qualcomm call it a licencing fee? It's simply the price of the chip.
The problem is that Apple buys their chips from Intel, not Qualcomm. Then Qualcomm says they owe them a license fees for the patents chip, and then a percentage from the sales price of the phone on top of that, for the same patents.
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The licensing fee is actually 1.5% of MSRP of the device. Apple MSRP is huge, so the licensing fee is huge. If the phone sold for $20 on the Indian market, the same license for the same chip would be much lower.
That would be right if Qualcomm didn't also ask for a fixed fee per chip (even those not made by Qualcomm) on top of that.
Price negotiation (Score:2)
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If Apple truly wants Qualcomm chip, they would have settled the lawsuit,
Which one? The one of the FTC against Qualcomm or the one by the Korean government against Qualcomm?