“Shares of Qualcomm are down $4.16, or almost 8%, at $50.50, after a report by The Wall Street Journal’s Dana Mattioli and Tripp Mickle [on Tuesday] claimed Apple is working on designs for iPhones and iPads for next year that would completely dispense with Qualcomm’s ‘baseband’ modem chips, citing multiple unnamed sources,” Tiernan Ray reports for Barron’s. “The report claimed Apple is looking to use more Intel modem chips, which it already uses in some units of the iPhone, and perhaps to use chips from Qualcomm’s Taiwanese competitor, MediaTek.”
Naturally, one would expect Apple to use the threat of taking the remainder of Qualcomm’s iPhone modem business during negotiations. The fact that such a possibility leaked to the WSJ at an early date only serves to increase that leverage. — Chris Caso, Raymond James analyst
Ray reports, “Caso, however, thinks completely designing out Qualcomm brings a big risk for Apple: it has no backup in case Qualcomm successfully obtains an injunction against non-Qualcomm units of the iPhone.”
MacDailyNews Take: If that’s the risk, it’s a very slight one.
Ray reports, “He thinks the likely outcome is simply that Qualcomm’s share of iPhone goes lower: ‘Net, for 2018, our base assumption is that Qualcomm’s share of iPhone modems will drop to 30%,from the present 50%, thus dropping Qualcomm’s iPhone revenue to the $0.9-1.1 billion range.'”
Read more in the full article here.
MacDailyNews Take: No risk, however slight it may be, no reward.
Qualcomm’s FRAND abuse must stop.
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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