The Secret Behind Qualcomm's Margins? Patents • Hacker News Board

Re: The Secret Behind Qualcomm's Margins? Patents

#81

Post by m4rtink » Tue, Dec 12, 2023, 4:16 AM UTC

TaylorAlexander wrote: post #19

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.

We like to talk about the specific effects of the patent system (protects the little guy, etc), but we rarely talk about the cumulative effects of it. The more I look at the small innovators, they are all hungry to improve upon things the big companies are sitting on for 20+ years with a big moat to protect them, and I really get to thinking that in aggregate we are doing more harm than good. A response I hear is "th…

LCD drawing tablets were another victim - Wacom sitting on their EMR patents, selling only overpriced pro gear cost the world a couple generations of digital artists!

Re: The Secret Behind Qualcomm's Margins? Patents

#82

Post by thayne » Tue, Dec 12, 2023, 4:24 AM UTC

Pxtl wrote: post #51

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.

Not only that, but the patent system is 100% essential to pharma research. Pharma takes a crapload of time from patent to market because of the many layers or trial safety. There are drugs that just plain miss their deadline -- setbacks during the testing process for enough time and then the patent expires and a medication with useful applications get lost to history. If you substantially screwed with that without a…

Patents as a driver for drug discovery has problems too. The most obvious is it means there is very little incentive to research and get FDA approval for treatments that aren't patentable, even if those might lead to better outcomes than patented treatments.

I don't really have a good alternative though.

Re: The Secret Behind Qualcomm's Margins? Patents

#83

Post by [deleted] » Tue, Dec 12, 2023, 4:49 AM UTC

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…

[deleted]

Re: The Secret Behind Qualcomm's Margins? Patents

#84

Post by AlbertCory » Tue, Dec 12, 2023, 5:06 AM UTC

underlipton wrote: post #77

AlbertCory wrote: post #64

Earlier quoted context omitted.

ok, bro. 100% or nothing? Guess which one you'll get?

Under the current system, it's already effectively "nothing" for >People who can't afford existing drugs >People who can't get corporations to develop drugs for their conditions because they wouldn't be "profitable" >People who can't make their farm's business model work even though they're fully capable of growing the crops people want and getting them to market and so on. But thank you for being my daily encounter…

wishful thinking's always better than facing reality. At least in some worlds.

Re: The Secret Behind Qualcomm's Margins? Patents

#85

Post by anitil » Tue, Dec 12, 2023, 5:13 AM UTC

jauntywundrkind wrote: post #47

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 Media…

> is a vast submarine point

This is an interesting turn of phrase, but I don't understand what it means - are you able to explain? (Google is not helping)

Re: The Secret Behind Qualcomm's Margins? Patents

#86

Post by chii » Tue, Dec 12, 2023, 5:17 AM UTC

dathinab wrote: post #61

axlee wrote: post #11

Earlier quoted context omitted.

It's so weird that an oligopolistic industry with the largest barriers to entry (your average CPU factory will cost $5/10+ billions, and that's just the factory) have the lowest margin, by far. Why is that so?

While there are not many competitors, they still do (most times) properly compete due to various factors like pressure from their customer (some very very large with the capabilities to become a competition iff they stop innovating and/or become to expensive), but also factors like political pressure to stay ahead of mainland china. Through TSMC for example has margin >40%. Which isn't that surprising I mean there is…

i suspect that TSMC doesn't have as big a monopoly as you've made it out to be, not because intel is competing, but because the customers of TSMC are large enough that they "force" the innovation (aka, they "threaten" to not use them if they stop innovating).

Also, TSMC hasn't been around long enough to become the slow behemoths that other big monopolies have become.

Re: The Secret Behind Qualcomm's Margins? Patents

#87

Post by jomohke » Tue, Dec 12, 2023, 5:24 AM UTC

afandian wrote: post #16

whatshisface wrote: post #10

Earlier quoted context omitted.

I guess it's for me, I've never worked at Qualcomm.

You may find this episode of the Acquired Podcast interesting. https://podcasts.apple.com/gb/podcast/acquired/id1050462261?...

(slightly) more platform neutral link: https://overcast.fm/+_ztydHHNo

Re: The Secret Behind Qualcomm's Margins? Patents

#88

Post by stavros » Tue, Dec 12, 2023, 5:29 AM UTC

anitil wrote: post #85

jauntywundrkind wrote: post #47

Earlier quoted context omitted.

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 Media…

> is a vast submarine point This is an interesting turn of phrase, but I don't understand what it means - are you able to explain? (Google is not helping)

I guess they just mean "a point no one sees coming".

Re: The Secret Behind Qualcomm's Margins? Patents

#89

Post by hughesjj » Tue, Dec 12, 2023, 7:13 AM UTC

chii wrote: post #86

dathinab wrote: post #61

Earlier quoted context omitted.

While there are not many competitors, they still do (most times) properly compete due to various factors like pressure from their customer (some very very large with the capabilities to become a competition iff they stop innovating and/or become to expensive), but also factors like political pressure to stay ahead of mainland china. Through TSMC for example has margin >40%. Which isn't that surprising I mean there is…

i suspect that TSMC doesn't have as big a monopoly as you've made it out to be, not because intel is competing, but because the customers of TSMC are large enough that they "force" the innovation (aka, they "threaten" to not use them if they stop innovating). Also, TSMC hasn't been around long enough to become the slow behemoths that other big monopolies have become.

I think it's just a matter of 'if you stop innovating, others will catch up quicker than you expect'. It's a continual r&d March, and you don't want to end up like Intel and get stuck on 14nm forever

And Intel was a company that was still shoving billions into r&d, yet still got stuck

So much of the tech industry has Moore's law baked into the supply chain forecasts, so lots of incentive to deliver on it.

Re: The Secret Behind Qualcomm's Margins? Patents

#90

Post by beambot » Tue, Dec 12, 2023, 7:35 AM UTC

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.