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Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

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Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#51

Post by hajile »

samfisher83 wrote: post #22
jimrandomh wrote: post #3

Qualcomm's chips have a very bad computer security track record, and their patent-enforced monopoly status makes this a serious problem. If they would go the way of Flash and Acrobat, this would make the world much better off.

Qcom is not a chip company. It is an IP company that happens to make some chips on the side. A majority of their profits are based on their IP portfolio. As a percentage of revenue they spend more on R&D than most Tech companies especially apple. Apple spends less than 5% on R&D. However I am not a fan of their chips. Their chips aren't that great, but its hard to compete with them since you have to use their patents…

Qualcomm reports QCT (chips and software) separately from QTL (licensing). In 2015, their Form 10-K reported that licensing was around 30% of their income and the rest was chips and software (see page 8).

http://investor.qualcomm.com/secfiling.cfm?filingID=1234452-...

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#52

Post by MBCook »

dheelus wrote: post #31

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…

Qualcomm agreed to only charge 50¢ per item (FRAND licensing) but is complaining Apple isn’t paying 20%. They’re violating an agreement.

In the App Store Apple offered a deal and sticks to it. You may not need like it but they’re doing exactly what they agreed to.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#53

Post by dheelus »

smm2000 wrote: post #45
dheelus wrote: post #31

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…

Throughput, expectation of service and number of tables/waiter are very different for coffeeshop/casual diner and place that sells $60 steak. In casual restaurant you can expect one waiter per 8 tables compared to 4 tables/waiter in fine dining place. People easily take 2x time to eat the same amount of food in fine dining place compared to something cheaper. In fine dining place waiters are better trained/educated (…

Agreed and my analogy is imperfect at best. However, assuming I am eating at a fine-dining establishment, why should tips be percentage calculated? Shouldn't the tip amount be the same regardless of whether I order the expensive items on the menu or the (relatively) cheaper ones? Which is basically what Apple's argument boils down to.

FWIW, I don't really have a dog in this race (except as an AAPL stockholder I want the stock to do well). If any judgement mandates that the license fee be charged on the cost of the chip and not the device, then I'd like to see that be extended to the App Store ToS as well.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#54

Post by somenewacc »

yaantc wrote: post #42
danjoc wrote: post #29

Earlier quoted context omitted.

>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…

This story is very Apple vs. QCOM, but I don't care much about this angle really. What I care about is the underlying question: is it ok to charge IPR on value added way outside the scope of the given IP? I don't think so. QCOM does so. Apple is against. So I'm just sympathetic with Apple position in this strong debate and that's it (I'm not even an Apple user). And I don't feel sorry for Apple. I feel sorry for all…

Why can't we let the markets regulate themselves?

Or, if we're dictating what's a fair price.. can we at least force Intel, AMD and other relevant parties to license X86 patents?

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#55

Post by ksk »

kartD wrote: post #10
mchafkin wrote: post #7

Earlier quoted context omitted.

did you read the story? we discuss the very disagreement you reference.

From the guidelines: Please don't insinuate that someone hasn't read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that." https://news.ycombinator.com/newsguidelines.html

The guidelines are indeed a nice idea. Its a pity a tiny minority seems to care for or follow them. IMO Using them to selectively criticize is worse than not having them in the first place.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#56

Post by MBCook »

RandVal30142 wrote: post #39
dpark wrote: post #15

Earlier quoted context omitted.

> 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.

FRAND is a legal term in a contract.

You can’t just arbitrarily apply it to something that’s not under a contract (Apple’s device prices) and say that because you don’t like that due to a non-legal system definition of FRAND Qualcomm is off the hook.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#57

Post by dheelus »

MBCook wrote: post #52
dheelus wrote: post #31

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…

Qualcomm agreed to only charge 50¢ per item (FRAND licensing) but is complaining Apple isn’t paying 20%. They’re violating an agreement. In the App Store Apple offered a deal and sticks to it. You may not need like it but they’re doing exactly what they agreed to.

Can you please point out where in the referenced article there is a mention of QCOM changing the terms of the deal? I seem to have missed it. Thanks.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#58

Post by AlphaSite »

hajile wrote: post #44
dpark wrote: post #15

Earlier quoted context omitted.

> 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…

Qualcomm's R&D budget is around 25% of net sales. Google, Cisco, Intel, and Microsoft (for example) are considered big spenders, but they only spend 12-15% of net sales (apple spends 2.2% of net sales on R&D). Qualcomm sounds a lot more fair and reasonable than any of the other multi-billion dollar companies I know of.

Actually don’t they spend 5-7%? It’s not huge percentage wise, but it’s still 10billion.

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#59

Post by briandear »

throwaway000002 wrote: post #12

If 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.

How is Apple holding back the web? Is there an assumption that every application ought to be on the web and that a browser is the best means to use an application?

Re: Apple and Qualcomm’s Billion-Dollar War Over an $18 Part

#60

Post by scarface74 »

somenewacc wrote: post #54
yaantc wrote: post #42

Earlier quoted context omitted.

This story is very Apple vs. QCOM, but I don't care much about this angle really. What I care about is the underlying question: is it ok to charge IPR on value added way outside the scope of the given IP? I don't think so. QCOM does so. Apple is against. So I'm just sympathetic with Apple position in this strong debate and that's it (I'm not even an Apple user). And I don't feel sorry for Apple. I feel sorry for all…

Why can't we let the markets regulate themselves? Or, if we're dictating what's a fair price.. can we at least force Intel, AMD and other relevant parties to license X86 patents?

The difference is that for cellular phones to be effective, they all must use the same standard. Companies agree that for their inventions to be part of the standard, they will license their patents to all comers at FRAND. The patent holders are basically granted a monopoly by the standard setters in exchange for fair licensing terms.
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