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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

#81

Post by threeseed »

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…

Don't people understand the App Store model ?

You aren't paying for their effort in hosting the app. It's a fixed cost and the App Store runs largely on the back of the iTunes Store platform. You are paying Apple for being a distribution channel i.e. channel to market. And it's incredibly common for those to be based on a percentage rather than fixed amount.

Apple does spends a significant amount of money (far more than your 30%) on giving developers the perfect market to sell to. Every customer has a credit card, is on the latest OS, is willing to spend, is unable to pirate etc.

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

#82

Post by ballenf »

danjoc wrote: post #29
yaantc wrote: post #6

That'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…

Apple pays $10 on a $1k phone due to rebates (before the dispute started). Without rebates the cost would be $50. Apple will actually benefit less from a win here than the small phone manufacturer.

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

#83

Post by mcculley »

greglindahl wrote: post #74
mcculley wrote: post #67

Earlier quoted context omitted.

>they don't charge IPR on the modem function, but over the whole device. Is this why there's no option for an LTE modem in a MacBook Pro?

It's much more cost-effective to have a mobile hotspot, because then you're only paying the Qualcomm tax on a minimal thing.

I get that. I was wondering why Dell ships laptops with an LTE modem and Apple ships every mobile device except a MacBook with an LTE modem. It makes sense if it is some stupid negotiation tactic. I was wondering why they would not put something in so obvious to the benefit of users.

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

#84

Post by threeseed »

RandVal30142 wrote: post #64
MBCook wrote: post #56

Earlier quoted context omitted.

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.

Not saying Qualcomm is on or off any hook but perhaps Apple's valuations are a bit off and Qualcomm's closer to reality.

What you are saying has no basis in fact or reality. FRAND has a specific meaning.

You don't get to agree to parts of it just because the company you are licensing to has more money to spend.

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

#85

Post by ballenf »

threeseed wrote: post #81
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…

Don't people understand the App Store model ? You aren't paying for their effort in hosting the app. It's a fixed cost and the App Store runs largely on the back of the iTunes Store platform. You are paying Apple for being a distribution channel i.e. channel to market. And it's incredibly common for those to be based on a percentage rather than fixed amount. Apple does spends a significant amount of money (far more t…

And don't forget that Apple doesn't get a cent of any non-IAP monetization of the app of which advertising is primary.

Off topic here, but I find it interesting that Apple cracks down on various other workarounds like in app "tipping", but doesn't touch ads.

Would be interesting to see what the effective % apple tax is, if all ad revenue was factored in to the gross.

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

#86

Post by pwinnski »

threeseed wrote: post #79
danjoc wrote: post #69

Earlier quoted context omitted.

>Apple is against. In this case. Apple has a history of demanding extortionate patent licensing fees for incredibly obvious ideas. You seem to be missing the bigger picture. The attack on Qualcomm is against the company, not the patents. Qualcomm snapdragons are the only competitive ARM chips against Apple's A series. Apple is trying to destroy Qualcomm and monopolize the market. That's not going to help the little g…

> Apple has a history of demanding extortionate patent licensing fees for incredibly obvious ideas When ? I am only aware of one situation in their history i.e. Android where Apple has sought an ongoing royalty. > Apple is trying to destroy Qualcomm and monopolize the market What ? Apple is never going to sell their CPUs to their competitors. They are a product company not a components vendor so not sure what market…

Has Apple sought a royalty on Android? My belief has been that Apple refused to license any of their patents. They've sued Samsung not to extract royalties, but to stop them infringing Apple's patents, full-stop.

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

#87

Post by ballenf »

newusertoday wrote: post #66
MBCook wrote: post #52

Earlier quoted context omitted.

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.

So why is apple suing in 2017? why didn't they sued in 2007 at time of launch of iphone? Issue is way more complex in this fight. 1. Qc has more than 130k patents,licensee gets blanket protection for all.(one can argue about bundling though) 2. Qc,ericcson,nokia and other patent holders have cross licensing agreements with each other.This is to avoid negotiating individual contracts with every patent holder in a stan…

The article explicitly says Apple waited until they could get chips from another source, Intel. Their general counsel explicitly said they would have sued sooner, but were at Qualcomm's mercy and feared retaliation. Maybe that's revisionist history and seems unlikely to be so clearcut, but that's their story.

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

#88

Post by threeseed »

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.

Using a percentage to compare R&D budgets is incredibly stupid.

If I own a company with 100K revenue and spend 5K on R&D that doesn't make me more innovative, relevant or noteworthy than Apple.

It's all about the amount and quality of R&D that is important.

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

#89

Post by ballenf »

alexandercrohde wrote: post #78

You guys are making this a really irrational, really emotional "Apple vs Qualcomm" issue. The root of the problem is not that. The root of the problem is bad patent law. It really doesn't matter what apple does, it doesn't matter if their CEO eats babies, the merits of a patent are irrelevant to whether the company "feels like a baddy." If you think apple has bad monopolistic practices in its app store, that only rei…

And a broken cellular standards body that doesn't nail down in explicit detail how the IP will be licensed before granting a government-sponsored & mandated monopoly.

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

#90

Post by pwinnski »

mcculley wrote: post #83
greglindahl wrote: post #74

Earlier quoted context omitted.

It's much more cost-effective to have a mobile hotspot, because then you're only paying the Qualcomm tax on a minimal thing.

I get that. I was wondering why Dell ships laptops with an LTE modem and Apple ships every mobile device except a MacBook with an LTE modem. It makes sense if it is some stupid negotiation tactic. I was wondering why they would not put something in so obvious to the benefit of users.

I think the key there is that Dell ships with an LTE modem, a separate device with a separate price. They pay royalties to Qualcomm on the price of the modem.

Apple would never (for some value of never) ship a laptop with an external device like that. The LTE is either baked into the laptop (at which point Qualcomm would demand a % of the entire laptop's sale price), or it's not included at all. They choose not at all.

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