“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 – recommended – here.
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.
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