“How much are iPhone chips worth? That more or less is the question to be decided by a US court as Apple seeks billions in damages from former chip supplier Qualcomm,” Julie Charpentrat reports for AFP. “Since Apple originally filed suit in January 2017, the two US firms have been suing each other in multiple countries in a multi-front battle.”
“At the heart of the battle are the royalties Qualcomm charges for its patented chips, which enable smartphones to connect to mobile networks,” Charpentrat reports. “Apple accuses Qualcomm, which holds the most patents for chips, of taking advantage of its dominant position to charge exorbitant amounts for its chips or access to its patents. The iPhone maker refuses to pay up and is also seeking what could be billions of dollars in compensation.”
“After jury selection in the San Diego federal court, arguments are expected to begin Tuesday. Apple chief Tim Cook and Qualcomm’s CEO Steve Mollenkopf are both expected to appear during the trial, which is set to last around a month,” Charpentrat reports. “‘In order to purchase Qualcomm chips or obtain access to patents pledged to a cellular standard, Qualcomm demands that third parties pay Qualcomm a royalty much greater than the value of Qualcomm’s contribution to the standard,’ Apple argues. ‘What this means in the case of the iPhone is that when Apple engineers create a revolutionary new security feature such as touch ID, which enables breakthrough technologies like Apple Pay, Qualcomm insists on royalties for these and other innovations it had nothing to do with and royalty payments go up,’ it said. ‘Even when Apple sells an iPhone with added memory — 256GB instead of 128GB — Qualcomm collects a larger royalty just because of that added memory,’ according to the company, which claims it has been overcharged by ‘billions of dollars.'”
Read more in the full article here.
MacDailyNews Take: Qualcomm’s jig is almost up.
SEE ALSO:
Apple-Qualcomm jury includes woman who’s never owned smartphone – April 16, 2019
Apple, allies seek damages of up to $27 billion in U.S. trial over Qualcomm’s predatory business model – April 15, 2019
Frosty relationship between Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf has deepened dispute – April 13, 2019
So let me get this straight. Someone is charging Apple a premium and Apple is whining about it.
“At the heart of the battle are the royalties Qualcomm charges for its patented chips, which enable smartphones to connect to mobile networks,” Charpentrat reports. “Apple accuses Qualcomm, which holds the most patents for chips, of taking advantage of its dominant position to charge exorbitant amounts for its chips or access to its patents. The iPhone maker refuses to pay up and is also seeking what could be billions of dollars in compensation.”
I can see why Qualcomm would tell Apple to fuck off, go get your chips elsewhere. Qualcomm should be able to charge whatever they like for their technology and Apple is free to develop their own or go elsewhere.
And when you order a car with an upgraded leather interior, you need to pay more for the audio system? Qualcomm should charge whatever they want, a take it or leave it price, and then let customers decide if they want to buy from them. Does not sound like that is what happened here, but the trial will throw light on their practices and we can all decide who is right and who is wrong.
You aren’t paying more for the audio system. That’s just the silliness Apple is claiming.
If I sell you the spark plugs that make your car run, and I tell you my charge is a % of the cost of the car, when you sell that car, I get my percent. I don’t care what you added to it to raise the price because that car ain’t gonna run without my spark plugs. So either make your own spark plugs, buy someone else’s or pay for mine and STFU.
It’s a “that’s my price, take it or leave it” situation.
So Qualcomm charges a percentage of the phones selling price as opposed to a fixed price. And Apple comes up with this albeit creative, but highly questionable way of looking at being charged a higher price. Saying if we ad memory, and the price of the phone goes up, Qualcom’s Price goes up.
Oh well. Qualcomm should be able to charge whatever they like. Apple does not have to pay. No one is forcing Apple to use Qualcomm.
No one stole anything from Apple. No one cheated Apple. Apple just doesn’t like the way Qualcomm prices their chips. Tough shit. I don’t like the way Apple prices their products. So what would you tell me to do?
So in other words, if you buy a banana (for which I own the patent, and for which I charged the wholesaler a royalty), and then tell you that I want a percentage of the value of everything you make with that banana, and you’re a high-end dessert maker whose specialty is bananas foster, you’re not going to object? You already paid for the banana; why should you pay me any more money?
The problem is that Qualcomm agreed to “fair, reasonable, and non-discriminatory” terms for licensing their technology in return for that technology being made a required part of cellular telephone standards. Without such an agreement, someone else’s technology would likely have been chosen as the standard, and Qualcomm would be nowhere.
Now, in violation of those terms, Qualcomm charges royalties on pretty much everything – in fact, not only do they charge royalties on the chips which incorporate those technologies, but then they turn around and charge royalties on devices which incorporate those chips for which the royalty has already been paid.
This is neither fair nor reasonable, but it’s certainly non-discriminatory – Qualcomm will screw anyone they can without regard to anything except their ability to pay.