Intel accuses Qualcomm of abusing its mobile chip monopoly

“Intel has jumped into the fray surrounding the Apple-Qualcomm patent spat by accusing the world’s biggest maker of mobile phone chips of trying to use the courts to snuff out competition,” Steven Musil reports for CNET. “The chip giant made the allegation late Thursday in a public statement (PDF) to US International Trade Commission. The commission had requested the statement as part of its investigation into Qualcomm’s accusation that Apple’s iPhones of infringe six of Qualcomm’s mobile patents.”

“Specifically, Intel said, the case is about quashing competition from Intel, which described itself as ‘Qualcomm’s only remaining competitor’ in the market for chips for cellular phones,” Musil reports. “Intel’s statement is the latest salvo in Qualcomm’s battle with Apple. The two companies have been fighting over patents since January, when Apple filed suit against Qualcomm in the US and said the wireless chipmaker didn’t give fair licensing terms for its technology.”

“Intel’s statement goes on to accuse Qualcomm of maintaining a monopoly on cell phone modems through what it calls the anticompetitive practice of ‘no license, no chips.’ The policy requires equipment manufacturers to pay ‘exorbitant’ royalties to Qualcomm for every device they sell, regardless of whether it contains a Qualcomm chip, Intel said,” Musil reports. “Any disagreement is met with the threat of cutting off the equipment maker’s supply of chips, Intel said.”

Read more in the full article here.

MacDailyNews Take: Your racket has been exposed, Qualcomm.

Qualcomm’s FRAND abuse must not stand. Qualcomm’s licensing scam — charging a percentage of the total cost of all components in the phone, even non-Qualcomm components — is unreasonable, illogical, and irrational.

Qualcomm shareholders would be wise to exit their positions.

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  1. Even though it seems exorbitant, and maybe it is, I think we need to be really careful about telling an owner of intellectual property, who spent good money coming up with that invention, how much they should be able to charge for it.

    1. If a company invents a valuable technology with widespread applications there are two main courses of action. One is to keep it to itself and commercialise it exclusively, which is what Apple does with many of it’s inventions. The other is to agree to allow that technology to be used as part of an agreed standard and to collect royalties from those using that technology. Part of the deal is that terms for using that technology must be FRAND – Fair, Reasonable and Non-Discriminatory.

      The fair and reasonable aspects covers what you said about how much they should charge. The bottom line is that the fee should be fair to both sides and all users should be charged the same amount in in the same way. The central issue in the Apple case is non-discrimination, whereby Apple is being asked to pay different fees to other users.

      If a manufacturer doesn’t wish to accept FRAND terms, their technology won’t become part of a standard. In this case, Apple claims that Qualcom is abusing the FRAND agreement after the standard was agreed.

      1. As I wipe off all the juice from the tomatoes that have been thrown my way, I need to ask a question – as I only know a little about FRAND.

        Do companies voluntarily put their patents on a FRAND list so that they will be used in a standard? I probably know the answer to that question, but I will ask anyway.

      2. Not only do they voluntarily agree, as if they were being asked to do so with a handful of “pretty pleases”, they actually push the technology to be used in the standard. Companies are very eager to have their patent adopted in the Standards. Why are they so eager you might ask. Simple, it helps them get to market first so they grab a large amount of the market at that time. Also, they continue to charge competitors for the standard being implemented in the design of competitors.

    2. Then there is that little issue of paying royalties on phones that don’t even have a Qualcomm chip.

      Third, the issue of the royalty being tied to the price of the phone. $20 phone, small fee. $800 phone, huge fee. Same chip in both.
      How do they get away with that?

      1. In the past Microsoft imposed a Windows license on every computer a company which normally made PCs made even if that computer shipped without a Windows OS. Say it shipped a computer with THEOS or LINUX installed instead. . . but Microsoft’s licensing agreement required the maker to pay for the Windows license anyway, even though a Windows install was not supplied to the buyer. This was found to be abusive and anti-competitive toward the other OS publishers by the US Government and they were forced to cease and desist.

  2. During its halcyon days, didn’t Microsoft charge every PC OEM a fee for each sale even though that OEM did not preinstall Windows?

    And isn’t that similar to Qualcomm now?

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