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The Secret Behind Qualcomm's Margins? Patents

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Re: The Secret Behind Qualcomm's Margins? Patents

#61

Post by dathinab »

axlee wrote: post #11
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…

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 not much competition. Intel doesn't (yet) provide their capabilities to anyone else, and the other competition is behind enough to not be an option for many things, especially high end and/or high efficiency.

What is quite fascinating is that while TSMC is a close to monopoly(/duopoly if you count Intel) in many sectors and takes advantage of it they seem to have successfully resisted the common problem of such companies stopping/slowing innovation and similar problem. I'm not sure if it's related to the additional pressure of them being on of the main lifelines for Taiwan or if they have just pretty good management or if it's because they still competition oligopoly main customers do push them to do so.

Re: The Secret Behind Qualcomm's Margins? Patents

#62

Post by aspenmayer »

The amount of heavy lifting that the word “may” is doing in this FUD encoded legalese SEC disclosure is impressive. It also ignores that first order effects reducing profits due to open sourcing may be eclipsed by second order effects in the market possibly selecting for rather than against open source software/firmware/drivers for their products.

> Our use of open source software may harm our business.

> Certain of our software and our suppliers’ software may contain or may be derived from “open source” software, and we have seen, and believe that we will continue to see, customers request that we develop products, including software associated with our integrated circuit products, that incorporate open source software elements and operate in an open source environment, which, under certain open source licenses, may offer accessibility to a portion of our products’ source code and may expose our related intellectual property to adverse licensing conditions. Licensing of such software may impose certain obligations on us if we were to distribute derivative works of that software. For example, these obligations may require us to make source code for the derivative works available to our customers in a manner that allows them to make such source code available to their customers or license such derivative works under a particular type of license that is different than what we customarily use to license our software. Furthermore, in the course of product development, we may make contributions to third-party open source projects that could subject our intellectual property to adverse licensing conditions. For example, to encourage the growth of a software ecosystem that is interoperable with our products, we may need to contribute certain implementations under the open source licensing terms that govern such projects, which may adversely impact our associated intellectual property. Developing open source products, while adequately protecting the intellectual property upon which our licensing programs depends, may prove burdensome and time-consuming under certain circumstances, thereby placing us at a competitive disadvantage, and we may not adequately protect our intellectual property. Also, our use and our customers’ use of open source software may subject our products and our customers’ products to governmental and third-party scrutiny and delays in product certification, which could cause customers to view our products as less desirable than our competitors’ products.

https://investor.qualcomm.com/financial-information/sec-fili...

https://web.archive.org/web/20230921012336/https://investor....

Re: The Secret Behind Qualcomm's Margins? Patents

#63

Post by Pxtl »

terragon wrote: post #60
Pxtl wrote: post #51

Earlier quoted context omitted.

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…

Drug discovery has already mostly ground to a halt, so I don't think we'd be breaking much of a system.

I think mRNA vaccines provide a pretty strong counter-argument. And do you know how many heart patients are alive today thanks to apixaban? Before that drug people were taking literal rat-poison as an anticoagulant.

Re: The Secret Behind Qualcomm's Margins? Patents

#64

Post by AlbertCory »

underlipton wrote: post #44
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 th…

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

Re: The Secret Behind Qualcomm's Margins? Patents

#65

Post by defrost »

Pxtl wrote: post #63
terragon wrote: post #60

Earlier quoted context omitted.

Drug discovery has already mostly ground to a halt, so I don't think we'd be breaking much of a system.

I think mRNA vaccines provide a pretty strong counter-argument. And do you know how many heart patients are alive today thanks to apixaban? Before that drug people were taking literal rat-poison as an anticoagulant.

> Before that drug people were taking literal anticoagulant as an anticoagulant.

and now they are taking a different literal anticoagulant as anticoagulant.

w00t!

Quick question- will a massive dose of apixaban kill a rat the same as a massive dose of an anticoagulant will?

mRNA's are novel, on this we can agree, and I have no issue with their use.

Other sectors of the drug market are less novel and more about slightly different for the purposes of starting the clock on drug copyrights and licencing again.

Re: The Secret Behind Qualcomm's Margins? Patents

#66

Post by AlbertCory »

vvvvvvvvvvvv wrote: post #50
AlbertCory wrote: post #31

Earlier quoted context omitted.

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

usually what I hear is "they've cross-licensed." That doesn't translate as "unspoken deal."

Re: The Secret Behind Qualcomm's Margins? Patents

#67

Post by croemer »

mschuster91 wrote: post #3

> Qualcomm’s licensing business is best-in-class and an example many companies can learn from. The last thing this world needs is more Qualcomm. I'd rather see the entire patent system go down in flames than this utter crap continuing. Qualcomm has been a vampire on technology for years now, it's time for this company to end once and for all. We have to get technology under the people's control again - it is ridiculo…

The author of the article appears to be a patent lawyer ;)

Re: The Secret Behind Qualcomm's Margins? Patents

#68

Post by ejz »

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…

Read the article! Apple and Tesla aren’t the comps. Companies like Intel and Broadcom are. The industry as a whole has a 23% margin.

The 20% margin this year was an anomaly. It’s usually closer to 29%+

Re: The Secret Behind Qualcomm's Margins? Patents

#69

Post by croemer »

Oh, is Qualcomm the reason why adding cellular to an iPad is so expensive? I never understood how such a relatively small feature would cost that much. The alternative is that Apple just makes more money when setting prices like that. Would be curious how much of the price difference is extra license fees for Qualcomm.
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