Apple pays Qualcomm $2 billion a year in patent fees and Cupertino has had enough

“The story starts two summers ago, at a conference in Idaho, where a senior Apple executive, probably Cook, and a senior Samsung Electronics Co. executive, most likely Vice Chairman Jay Y. Lee, shared a quiet word,” Max Chafkin and Ian King report for Bloomberg. “Samsung is Apple’s biggest rival. The two companies have spent almost a decade in a bitter patent infringement dispute stemming from Apple’s claim that Samsung copied aspects of the iPhone. On the other hand, Samsung is also a top iPhone supplier and an ally in another contentious patent fight, against Qualcomm Inc., one of the world’s largest semiconductor companies.”

“Most people, save for electrical engineers and Los Angeles Chargers fans (Qualcomm’s name was on the NFL team’s old stadium in San Diego before the Chargers moved), don’t know much about Qualcomm, which has more than tripled its revenue over the past decade, thanks in part to an unusual business model,” Chafkin and King report. “In addition to selling modems and other chips, Qualcomm has amassed a portfolio of more than 130,000 patents covering, among other things, the key technologies that allow phones to send and receive data. If you want to sell a phone capable of connecting to the internet at high speeds, you need a license from Qualcomm. The company charges a royalty of as much as 5 percent of the average selling price of the phone, which can come to more than $30 per device.”

“Cell phone manufacturers refer to it as ‘the Qualcomm tax,’ and the practice has been investigated by regulators in China, Taiwan, South Korea, Japan, the European Union, and the U.S. A few phone makers, including Nokia OYJ and Ericsson AB, have unsuccessfully taken Qualcomm to court. The rest have simply tried to negotiate volume discounts,” Chafkin and King report. “At the conference in Idaho, according to documents Qualcomm filed earlier this year, Apple saw an opportunity to put itself in front of investigators. Qualcomm claims that at the event — almost certainly the Allen & Co. conference in Sun Valley, which both Cook and Lee attended — the Apple executive urged Samsung to pressure South Korean antitrust regulators to intensify an investigation into Qualcomm that had been open since 2014. ‘Get aggressive,’ the Apple executive said, according to Qualcomm’s filing, adding that this would be the ‘best chance’ to get Qualcomm to lower its prices.”

TOns more in the full article – recommendedhere.

MacDailyNews Take: Your free ride on Apple’s gravy train is nearing the end of the line, 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.

Apple faces down Qualcomm, Ericsson over EU patent fees – October 2, 2017
Qualcomm loses two key rulings in its patent royalty fight with Apple – September 21, 2017
Apple’s A11 Bionic obliterates top chips from Qualcomm, Samsung and Huawei – September 18, 2017
U.S. judge rules Apple lawsuits against Qualcomm can proceed – September 8, 2017
Qualcomm CEO expects out of court settlement with Apple – July 18, 2017
Apple-Qualcomm legal dispute likely to be ‘long and ugly’ – July 7, 2017
Qualcomm wants court to block Apple from U.S. iPhone imports and sales – July 6, 2017
Judge rules U.S. FTC antitrust lawsuit against Qualcomm to proceed – June 27, 2017
Apple uses Supreme Court decision to escalate war against Qualcomm – June 20, 2017
Apple’s amended San Diego complaint against Qualcomm leaves no doubt: many billions at stake – June 20, 2017
Apple rejects Qualcomm’s allegation of throttling iPhones, says ‘study’ is ‘methodologically unsound’ – June 20, 2017
Apple just poached one of Qualcomm’s top guys – May 31, 2017


    1. Please go read more about the case before making an uneducated comment like this.

      This isn’t simply about changing for a patent…

      I’ll let you go do research on what this is really about; the research experience will be good for you.

    2. FRAND is like this Mr. Greg:
      Qcom: • We invented a way of doing something.
      •Yes, we know there are other ways to invent to come to the same conclusion.
      • :Mr USA and World Government – if you will make this part of governmentally approved standards, we will license this at a Fair and Reasonable rate equally across the board, subject to Your approval.
      • The governmental authorities agreed to that and decided to accept that as the standards in certain electronic communications.
      • After patent is accepted and presented as a governmental standard, QCom did not abide by that license agreement.
      • Result – to the courts by those abused, and it has been much more than Apple.

  1. I just got back from a vacation in San Diego…there were so many Qualcomm posters everywhere telling people how many of the components in their cellphones were made by Qualcomm. I thought it was a very weird advertisement campaign.

    It’s almost as if they want their name in the minds of the consumer so when they go to court, they will be viewed more favorably in the eyes of the public.

    1. I’m beginning to think the reason for a percentage of a final product may lie in the difficulty in determining how many Qualcomm patents (both FRAND and other) a particular product actually uses. 130k+ to sift through is a lot of work.

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