“Apple was paying Qualcomm $7.50 per device in royalties. Apple initially wanted to pay just $1.50 per device, which it thought was a fair rate based on the value of the modems it was buying from Qualcomm,” Niu writes. “But Qualcomm charges royalty rates based on the value of the entire device, not just that component.”
“Qualcomm unsuccessfully tried to massively increase its per-device royalty rate in 2013 when the contract was up for renewal, hoping to add another $8 to $10 per device, according to the report. That would have more than doubled what Apple owed to Qualcomm in royalties annually. Instead, Apple accepted exclusivity as one of several provisions to keep the per-device rate at $7.50,” Niu writes. “‘We were staring at an increase of over $1 billion per year in licensing, so we had a gun to our head,’ Williams said.”
Read more in the full article here.
MacDailyNews Take: Qualcomm is going to lose big time and will finally be forced to license their technology on fair, reasonable, and non-discriminatory (FRAND) terms.
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