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The Secret Behind Qualcomm's Margins? Patents

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Re: The Secret Behind Qualcomm's Margins? Patents

#41

Post by shuckles »

er4hn wrote: post #14
whynot-123 wrote: post #4

I question who this article is for - having worked at Qualcomm, they beat you over the head on how their business is built on patents and how they were going to go belly up some 20 years ago had they not pivoted to this model. I can't imagine a single analyst or anyone interested in the company not aware of their business model in the same way it doesn't take long to figure out that Apple is in the business of sellin…

I think this is valuable for those outside of Qualcomm to understand why they have the role that they do in the mobile space. Having worked there as well I have two observations: - So much of that wall of patents was undergrad level CS concepts with ", for mobile device" tacked on the end. Paraphrasing, don't sue me (kidding..), but that was the gist of it. - Their actual development process was pretty bad. I submitt…

Really incredible stuff. Thank you for sharing. Reminds me to continue losing sleep at night over baseband software.

Re: The Secret Behind Qualcomm's Margins? Patents

#42

Post by [deleted] »

whynot-123 wrote: post #4

I question who this article is for - having worked at Qualcomm, they beat you over the head on how their business is built on patents and how they were going to go belly up some 20 years ago had they not pivoted to this model. I can't imagine a single analyst or anyone interested in the company not aware of their business model in the same way it doesn't take long to figure out that Apple is in the business of sellin…

[deleted]

Re: The Secret Behind Qualcomm's Margins? Patents

#43

Post by [deleted] »

AlbertCory wrote: post #33

If you're serious about "reforming" software and standards patents, you should first carve off that area from pharma and bio patents. Make software just plain not patentable. Why? Strategically, you don't want those drug people as enemies. They have an extremely powerful lobby in D.C. and many "reforms" that make sense in software would get them up in arms. Choose your battles.

[deleted]

Re: The Secret Behind Qualcomm's Margins? Patents

#44

Post by underlipton »

AlbertCory wrote: post #33

If you're serious about "reforming" software and standards patents, you should first carve off that area from pharma and bio patents. Make software just plain not patentable. Why? Strategically, you don't want those drug people as enemies. They have an extremely powerful lobby in D.C. and many "reforms" that make sense in software would get them up in arms. Choose your battles.

I'm not convinced that pharma or bio patents are justified, either.

>Strategically, you don't want those drug people as enemies.

Oh, actually, yes, can we please ream the m*****f*****s already? To talk about a group of people like that, suggests that they wield far too much power. It gets worse when you learn about what they actually do. Enough already.

An "extremely powerful lobby" is not so scary when you outlaw the type of corporate lobbying they engage in. And the American people don't have to let you have a business.

Re: The Secret Behind Qualcomm's Margins? Patents

#45

Post by jauntywundrkind »

In the west, Qualcomm won. There's basically no one else even trying to make medium or high end chips. The patent encumbrance seems total.

Even the mega giant Apple is reportedly just giving up on trying. And at huge real world impact, as well as market drive. Apple designs tend to use a third or more of their phone motherboard's real estate supporting Qualcomm's forest of different parts required for cellular. It's been stubbornly hard to integrate well, forever.

The other IT field I'd cite is GPUs, where it's not at all a secret that companies would love to make more open hardware & stop using so many firmware blobs, but those blobs are the obfuscation layer that gets them legal protection, by making it unclear how the hardware works.

In these regards, it's just a miracle wifi and bluetooth and consumer GPUs exist. That anyone can build any chips, given our shitty onerous forsaken legal IP system, seems like a miracle. Qualcomm feels like the dark world hell nightmare we can never escape from but miraculously nightmare-shit-world is in only one key part of information technology, not all of IT. Somehow. Thank the stars.

Re: The Secret Behind Qualcomm's Margins? Patents

#46

Post by lxgr »

avidiax wrote: post #6
mushufasa wrote: post #2

This is the patent system working as intended. Protection for technology development. You may say it limits innovation. But it also protects smaller players from investing in innovation, by de-risking that a big customer might copy them and destroy their business. Which is mostly this scenario. I think the bigger problem with the patent system is the patent trolls. Please someone solve that problem.

Unless I misunderstand, they are codifying their patents into open standards like 5G. So you can't implement 5G without their patents. Add that to encouraging complexity (10,000+ pages of spec to do something outwardly similar to WiFi), and they have a really effective moat around an "open" standard. The entire protocol space is somewhat arbitrary. This is a bit like patenting a strategy in a board game you created,…

> they are codifying their patents into open standards like 5G.

What do you mean by open standard? I don't think 5G is patent-free by any means, nor is 802.11/Wi-Fi for that matter!

That's just how most hardware standards are developed, as far as I know. The best thing you can hope for is a consortium maintaining a FRAND patent pool, like for the MPEG family of codecs (and even there you can't be sure that there aren't any patent trolls lurking outside the pool).

Re: The Secret Behind Qualcomm's Margins? Patents

#47

Post by jauntywundrkind »

FredPret wrote: post #7

Qualcomm does have a nice margin (20%) [ https://valustox.com/QCOM ] but this is roughly in line with other big co's in the industry. Motorola makes 18% [ https://valustox.com/MSI ] Broadcom, Nvidia, and even Texas Instruments are around 40%! [ https://valustox.com/AVGO , https://valustox.com/NVDA , https://valustox.com/TXN ]. Intel and AMD bring up the rear with 1.8% and 0.5%. [ https://valustox.com/INTC , https://v…

Having margins because no one can legally compete with you is pretty remarkable in the chip industry. No one else has carved out such a large market like this.

The other bit that blows me away is that sometimes it feels like Qualcomm's perpetual inability to integrate chips is a vast submarine point no one using Qualcomm sees coming, but which forever works out in Qualcomm's favor. I don't know how many chips a MediaTek cellular modem takes, but iPhone 15 pro has 6+ chips dedicated to cellular, probably more. Modem, two transceivers, an envelope tracker, and probably a bunch of in this case non-qualcomm power supplies but most probably use Qualcomm pmics, maybe plural. https://www.ifixit.com/Guide/iPhone+15+Pro+Max+Chip+ID/16532... . There's also separate but non-Qualcomm solutions for wifi & bt too, where-as again I rather expect a company like MediaTek has much more working together.

I'm really interested to see chip identifications of the upcoming desktop/server class Qualcomm Oryon, supposedly by the Nuvia team (one of the strongest possible cases for anti-trust I have ever seen). https://www.semiaccurate.com/2023/09/26/whats-going-on-with-... is not partial journalism, but this cavalcade of ridiculousness is entirely the sort of poorly integrated Qualcomm solution I'd expect, that both builds terrible terrible products but which also lets Qualcomm fail upwards by requiring 5x more board components than is reasonable. Terrible for consumers, OEMs are in tears, but oh sorry, your design is late hot over priced and seemed reasonable but you're going to have to add a bunch more pmic's to get to market because we are Qualcomm and we spend more on lawyers than design.

Re: The Secret Behind Qualcomm's Margins? Patents

#49

Post by p1necone »

mushufasa wrote: post #2

This is the patent system working as intended. Protection for technology development. You may say it limits innovation. But it also protects smaller players from investing in innovation, by de-risking that a big customer might copy them and destroy their business. Which is mostly this scenario. I think the bigger problem with the patent system is the patent trolls. Please someone solve that problem.

> I think the bigger problem with the patent system is the patent trolls.

This is almost a no true scotsman argument.

The patent trolls are a direct result of incentives the patent system creates, getting rid of them necessarily involves seriously reforming the system.

Re: The Secret Behind Qualcomm's Margins? Patents

#50

Post by vvvvvvvvvvvv »

AlbertCory wrote: post #31
RachelF wrote: post #15

Earlier quoted context omitted.

In fact they have the opposite effect on smaller players. The big players all have a few thousand (junk) patents and they make deals with each other to exclude the smaller players, who can't afford to file thousands of patents to join the club.

Everyone always says this. In fact, I was in Google's patent litigation division, and I can tell you firsthand that there is WAY less of this than you think. A cross-licensing deal is incredibly hard to negotiate. So if you could back this up with some links, it'd be appreciated. Otherwise it's just an urban myth.

they might mean an unspoken deal no to sue each other rather than a written one
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