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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

#131

Post by mercutio2 »

abritinthebay wrote: post #105
rgbrenner wrote: post #50

Earlier quoted context omitted.

All the most crucial wireless patents have already expired The 2G patents (that Qualcomm owned 90% of) have expired.. but who uses that anymore? Qualcomm also owns 13% of the patents used for LTE (which they agreed to license under FRAND terms).. it's those patents they are using to create a monopoly on LTE chips. First they refuse to license their patents to other manufacturers who want to produce chips.. then they…

> First they refuse to license their patents to other manufacturers who want to produce chips Isn't that a FRAND violation?

IANAL, but yes, sure looks like a FRAND violation. And that is the lawsuit in a nutshell!

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

#132

Post by mcculley »

wernercd wrote: post #110
mcculley wrote: post #99

Earlier quoted context omitted.

Dell, HP, and Lenovo ship laptops with a built-in LTE modem.

"Built in" as soldered unto the mother boards? Or "Build in" as in an expansion card added to an expansion card slot (even if "internally")? I assume the difference between those two would be the difference between price?

I have no idea. I would only care how well integrated it is with the operating system. But yes, maybe this is some hardware designed against accounting constraints.

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

#133

Post by wolco »

firethief wrote: post #124
dheelus wrote: post #53

Earlier quoted context omitted.

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…

Proportional tipping is much better at aligning the waiters' interests with the restaurant's than a flat tipping model would be; better customers get better service.

Wouldn't tipping some amount before give better service than tipping after? What if tipping was related to the number of services and/or difficulity of each service?

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

#134

Post by ananthraghavan »

ianamartin wrote: post #128
briandear wrote: post #48

Earlier quoted context omitted.

What can you do with the $20 worth of memory by itself? That $100 "markup" is because it's part of a great whole -- a whole that took millions to engineer and create. It isn't like Apple is just reselling memory chips. I could buy all the raw materials that go into an iPhone, but that doesn't mean that I personally could make an iPhone. I'm glad to pay a premium because I don't have time to build a phone.

Not sure why this is being downvoted. The existence of Apple at all today is exactly because people perceive a value greater than the sum of the cost of parts. This isn’t a new idea, and people put tens of billions of dollars behind this concept every fiscal quarter.

> The existence of Apple at all today is exactly because people perceive a value greater than the sum of the cost of parts.

yes and Apple loves that and that's why it makes its phones notoriously hard to repair or upgrade. that's why there are no SD card slots. that's why you have to buy an overpriced Apple exclusive lightning earphones or connector or whatever.

everyone is acting like the price of the phone must go up so much if it has higher storage, like there is no other engineering option.

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

#135

Post by ianamartin »

ananthraghavan wrote: post #134
ianamartin wrote: post #128

Earlier quoted context omitted.

Not sure why this is being downvoted. The existence of Apple at all today is exactly because people perceive a value greater than the sum of the cost of parts. This isn’t a new idea, and people put tens of billions of dollars behind this concept every fiscal quarter.

> The existence of Apple at all today is exactly because people perceive a value greater than the sum of the cost of parts. yes and Apple loves that and that's why it makes its phones notoriously hard to repair or upgrade. that's why there are no SD card slots. that's why you have to buy an overpriced Apple exclusive lightning earphones or connector or whatever. everyone is acting like the price of the phone must go…

I wasn't making a value judgement about whether or not this is a good thing. I was just pointing out that many people do find this a good thing. The product is more valuable than the price of the components to a large number of people. Whether or not that should be the case is better left to a different discussion. But the objective fact is that it's true for a huge number of people, and that provides an incentive for Apple to do more of the same.

If people were buying tens of billions of dollars worth of your product every three months, what would you do? Make it worse? Not find ways to make it more profitable?

I think you're incorrect about why Apple devices are not easy to repair and upgrade. But we may have to agree to disagree or have a different conversation about that.

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

#136

Post by ksec »

rgbrenner wrote: post #50
hajile wrote: post #36

Earlier quoted context omitted.

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…

All the most crucial wireless patents have already expired The 2G patents (that Qualcomm owned 90% of) have expired.. but who uses that anymore? Qualcomm also owns 13% of the patents used for LTE (which they agreed to license under FRAND terms).. it's those patents they are using to create a monopoly on LTE chips. First they refuse to license their patents to other manufacturers who want to produce chips.. then they…

Yes one has to wonder why Ericsson and Nokia dont charges more.

But Ericsson and Nokia do charges a lot for their Mobile Carrier Infrastructure and Equipment, where as Qualcomm dont have part in that industry. And one reason why Huawei is winning because Huawei has been offering similar equipment for much cheaper price.

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

#137

Post by ksec »

tooltalk wrote: post #65
rgbrenner wrote: post #26

Earlier quoted context omitted.

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).

in what ways did Qualcomm violate FRAND terms? Nokia, Ericsson and pretty much everyone else uses the entire device as a royalty basis. This is a fairly standard industry practice -- and has been so for decades. While Qualcomm is the largest contributor of wireless standards, it is far from a monopology. Also note that Apple accuses of every wireless patents holders of some sort of unfair pricing and violation of FRA…

Qualcomm collect more royalty from Apple then every other wireless patents holder combined.

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

#138

Post by tooltalk »

ksec wrote: post #137
tooltalk wrote: post #65

Earlier quoted context omitted.

in what ways did Qualcomm violate FRAND terms? Nokia, Ericsson and pretty much everyone else uses the entire device as a royalty basis. This is a fairly standard industry practice -- and has been so for decades. While Qualcomm is the largest contributor of wireless standards, it is far from a monopology. Also note that Apple accuses of every wireless patents holders of some sort of unfair pricing and violation of FRA…

Qualcomm collect more royalty from Apple then every other wireless patents holder combined.

Your source and your point being?

First, Apple doesn't directly pay Qualcomm. Apple has refused to take Qualcomm license, though I'm pretty sure Qualcomm would love to have Apple as their customer and start collecting license fees based on their retail price.

Second, Foxconn, Pegatron and Apple's contractors are the ones paying for Qualcomm licenses. Their licensing agreement with Qualcomm likewise precedes Apple's iPhone release in 2007. In another word, those contract manufacturers pay the same royalty rate to Qualcomm whether their end-products are for Apple, HTC, or whoever -- they all pay the same rate. Apple's rates are probably lower given various "collation" agreements (and rebates) Apple imposed on Qualcomm.

If you are trying to say Qualcomm unfairly charges Apple more, you need to bring some facts.

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

#139

Post by tooltalk »

rgbrenner wrote: post #50
hajile wrote: post #36

Earlier quoted context omitted.

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…

All the most crucial wireless patents have already expired The 2G patents (that Qualcomm owned 90% of) have expired.. but who uses that anymore? Qualcomm also owns 13% of the patents used for LTE (which they agreed to license under FRAND terms).. it's those patents they are using to create a monopoly on LTE chips. First they refuse to license their patents to other manufacturers who want to produce chips.. then they…

@rgbrenner:

First, Qualcomm chipset also comes with IPs owned by Samsung and a slew of other wireless patent holders who crossed-licensed theirs with Qualcomm. Samsung and LG, along with Qualcomm, are the largest contributors of LTE SEP's and make up the bulk of LTE patents (KFTC likewise found that Qualcomm used its monopolistic position to force them to cross-license their patents for almost nothing in return). So no. Even if you stack everything, it won't be anywhere close to your nonsensical $77.

Second, under ETSI (see section 1.11), Qualcomm has the right to refuse the granting of licenses.

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

#140

Post by ksec »

tooltalk wrote: post #138
ksec wrote: post #137

Earlier quoted context omitted.

Qualcomm collect more royalty from Apple then every other wireless patents holder combined.

Your source and your point being? First, Apple doesn't directly pay Qualcomm. Apple has refused to take Qualcomm license, though I'm pretty sure Qualcomm would love to have Apple as their customer and start collecting license fees based on their retail price. Second, Foxconn, Pegatron and Apple's contractors are the ones paying for Qualcomm licenses. Their licensing agreement with Qualcomm likewise precedes Apple's i…

Directly From Apple. And they have said these number of times in the public. Apple did not bring out any thing to prove it, so i am going to take its word they are not lying.

Those agreement also precede LTE.

You cant NOT use Qualcomm patents in LTE, but if Qualcomm were allowed to charge whatever they wanted, then they have a monopoly case, and we have to have somebody to define what is a fair price. Since Qualcomm are subject to FRAND.

All these patents fee were one of the reason why HEVC started charging $100M / year combined for their Video Codec, 20 times more the AVC / H.264. Because they saw what 4G patents were capable of charging.

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