An analogy for this in the real world would be tips for waiters. As a foreigner, I'm aghast at the tipping culture in the US but more importantly, I fail to understand why tips are calculated on a percentage basis. It is no more effort to bring me out a $60 steak than it is to bring me a $5 coffee. So why should I tip $12 for the steak and $1 for the coffee? To Apple's point, they want a "fixed" tip charge. But then again, Apple charges devs 30% of revenue from their App store when really it's (arguably) no more effort for them to host/monitor a 99-cent app vs. $10 app.
Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
31–40 of 143 posts
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#32That's a very one-sided pro-Qualcomm piece. The big issue with Qualcomm IP practice is that they don't charge IPR on the modem function, but over the whole device. So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Historically, the cellular/3GPP world was very phone centric. The specs…
>So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Pot, meet kettle. Apple charges 30% at the App store, whether I want to sell an app for $1 or $1000. Also, if Apple wanted, they could package the modem separately. Sell it for $50. Again, this mirrors Apple's advice to Samsung to buil…
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Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#33I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Of course, that assumes the patents are good ones.
> I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's assertion is that the pricing is not Fair or Reasonable, which Qualcomm agreed to as a concession to make their patents part of the cellular network standards. > Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and g…
The problem seems to be that there's no definition what exactly FRAND actually means. The only thing everyone seems to agree on is that "you cannot exclude companies from licensing your tech", but apart from that it seems to be wild west.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#34That's a very one-sided pro-Qualcomm piece. The big issue with Qualcomm IP practice is that they don't charge IPR on the modem function, but over the whole device. So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Historically, the cellular/3GPP world was very phone centric. The specs…
>So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Pot, meet kettle. Apple charges 30% at the App store, whether I want to sell an app for $1 or $1000. Also, if Apple wanted, they could package the modem separately. Sell it for $50. Again, this mirrors Apple's advice to Samsung to buil…
You don't have to sell your app in the Apple ecosystem - its very hard to build a modern mobile device without Qualcomm IP.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#35Earlier quoted context omitted.
Doubtful. Did you see the graphic in the article which shows Apple's margins on an iPhone?
Those were Apple's gross margins. Cost of goods is never the total cost, even for retail. In Apple's case, a lot of the magic of the iPhone happens through the effort of R&D. The media saying Apple's profit margin is their gross margin is disingenuous and grossly misleading. Most companies' gross margins are somewhere around 70% for products, but Apple is the one that gets singled out.
Apple's total profit after everything, for 2016, was $45.69B on $214.23B. That's over 21% net profit after every expense they have, which is insanely high. Apple's entire reputation is based on having crazy high profits for their revenue. That you're arguing that they have ordinary profit margins is insane.
And no, "most companies" do not have gross margins of 70%.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#36That's a very one-sided pro-Qualcomm piece. The big issue with Qualcomm IP practice is that they don't charge IPR on the modem function, but over the whole device. So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Historically, the cellular/3GPP world was very phone centric. The specs…
That pricing argument is worthless when you start talking about percentages. 5% of a $500 device is quite a lot while 5% of some $25 IoT device is not very much.
Qualcomm spends around 5.5 Billion every year in R&D or 23% of net sales. For comparison, apple spends a paltry 2.2% of its net sales on R&D. Dry up Qualcomm's net sales and the R&D will dry up too.
All the most crucial wireless patents (the really fundamental ones) have already expired. Why doesn't Apple design another, competing system around Qualcomm's patents and license it for free? The answer is that it takes a decade and tens of Billions of dollars.
Apple has the money, but it's cheaper to work the courts over so they pay less. If Apple were the ones who built 4G, you can be very sure they'd be charging at least as much as Qualcomm.
Remember, Apple thought the look of their iphone was worth $40 per device when suing Samsung, but now they think the actual technology to make it work isn't even worth $10 per device. If Qualcomm were making the same profit margins (relative to R&D) as Apple, they'd have to go from $10 per device to $100.
I'm not a Qualcomm fan (or any big corporation for that matter), but if we were making a list of price gouging companies, I think there are a lot of companies that should be getting fined and regulated (especially Apple) before Qualcomm.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#37If AAPL thinks QCOM doesn't add proportional value to their phone, let them sell their phone without QCOM ip. Because we all know AAPL takes its proportional percentage of flesh from an app developer for having the audacity to add value to iOS, whilst simultaneously holding back the web. Hypocrisy all around.
Apple can't really do that (sell a phone without Qualcomm IP). Qualcomm agreed to FRAND terms in exchange to adding their patents to the 3G standard. Once that happened, Qualcomm then violated their FRAND terms to create a monopoly on CDMA chipsets, charge additional royalties, etc. If they drop Qualcomm, then they'll have to drop CDMA support (Verizon, Sprint, 3g, 4g).
>Apple can't really do that (sell a phone without Qualcomm IP).
Maybe they should do some long term investments in this realm if it is where they choose to make their profits from?
Or pound sand in court..
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#38That's a very one-sided pro-Qualcomm piece. The big issue with Qualcomm IP practice is that they don't charge IPR on the modem function, but over the whole device. So put the same modem in a cheap phone, or in an expensive laptop, and the IPR will be very different. This is really charging IPR on a lot of value completely unrelated to the modem. Historically, the cellular/3GPP world was very phone centric. The specs…
That pricing argument is worthless when you start talking about percentages. 5% of a $500 device is quite a lot while 5% of some $25 IoT device is not very much. Qualcomm spends around 5.5 Billion every year in R&D or 23% of net sales. For comparison, apple spends a paltry 2.2% of its net sales on R&D. Dry up Qualcomm's net sales and the R&D will dry up too. All the most crucial wireless patents (the really fundament…
You're the guy who hates big corporations? I'm the guy who wants to end world hunger.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#39I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Of course, that assumes the patents are good ones.
> I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's assertion is that the pricing is not Fair or Reasonable, which Qualcomm agreed to as a concession to make their patents part of the cellular network standards. > Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and g…
>Apple's assertion is that the pricing is not Fair or Reasonable
I assert Apple's markup on products is not fair or reasonable. Perhaps Qualcomm's demands are in line with the true value of the device and not the pie in the sky numbers Apple wants.
Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part
#40I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Of course, that assumes the patents are good ones.
It's not that black and white. When someone has IP that is included in an international standard, there are room for debate.