Frosty relationship between Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf has deepened dispute

“A meeting between Tim Cook and Steve Mollenkopf a year ago at Apple Inc.’s headquarters started with a tense moment,” Tripp Mickle and Asa Fitch report for The Wall Street Journal. “The feuding leaders of two smartphone industry titans — Apple and Qualcomm Inc. — were there to discuss a long-simmering patent dispute. Mr. Mollenkopf, who suspected Apple of supporting a hostile takeover of his company, initially didn’t speak, leaving his general counsel to start talking, according to people familiar with the meeting.”

“The awkwardness punctuated a distant relationship between the chief executives that has turned their companies’ conflict into one of the ugliest corporate battles in history,” Mickle and Fitch report. “For two years, the companies have bickered over the royalties Apple pays to Qualcomm for its patents. Discord between the CEOs, who bring different management styles and principles to the table, has deepened the divide. They have dug into their positions as the dispute has escalated.”

“The feud heads toward a showdown this coming week, when Apple’s patent lawsuit against Qualcomm is set to go to trial — with both CEOs expected to testify in a case where billions of dollars are at stake,” Mickle and Fitch report. “Messrs. Cook and Mollenkopf are so entrenched in their competing positions — and have so little personal connection — that Apple’s top executives have said they don’t think it’s possible to cut a deal with Qualcomm while Mr. Mollenkopf is CEO, a person familiar with their thinking said. “It’s personal. I don’t see anybody who can bridge this gap,” this person said.”

Read more in the full article here.

MacDailyNews Take: Let the courts decide.

Qualcomm’s CEO is living in an isolated extortionist fantasyland that’s about to come crashing down abruptly.

Qualcomm’s unreasonable, illogical, and irrational licensing scam, which charges a percentage of the total cost of all components in the phone, even non-Qualcomm components, must end.

SEE ALSO:
Intel rebuffs report, still plans to supply 5G modems for 2020 devices – April 5, 2019
Qualcomm president on Apple’s 5G modem ‘struggles’: They have our phone number – April 5, 2019
Apple CEO Cook, other top execs to testify in Qualcomm trial – March 28, 2019
U.S. judge rules Qualcomm owes Apple nearly $1 billion in patent royalty rebates – March 15, 2019
Apple counsel maintains claims of witness tampering in Qualcomm patent case – March 14, 2019
Former Apple engineer says Qualcomm tech was his idea but doesn’t claim inventor status – March 11, 2019
Apple says Qualcomm stole idea for smartphone boot-up tech from engineer – March 5, 2019
The Qualcomm v. Apple patent jury won’t get these simple, brutally honest instructions – March 5, 201

21 Comments

  1. Tim Cooks attitude that Apple is his own company will now cause Apple to be late to 5G. what is new under Tim Cook. 5 years ahead of Netflix in Streaming, wasted. 4 years ahead of Amazon and Google in voice AI, wasted. 5 years late on Music streaming, wasted with substandard product. 2 years late in wireless charging. No Mac Pro updates for 6 years, Apple TV is a hobby being pulled by a string whatever the hell that means. Cook is Balmer. Period. I am a 17 year shareholder. Tim Cook has to go

    1. … shareholder, you get to vote your shares. You also get to go to the meetings and speak your mind.
      I have owned a few hundred shares, on and off, over a similar time frame and have occasionally voted, though my holdings tended to be short-term.

    2. MDN hypocrites. You say for people to suck it up and go elsewhere when it comes to Apple App Store developer levies. But this same attitude doesn’t apply to other companies.

      If Apple has an issue with what Qualcomm is charging, then they need to shut up and go elsewhere.

      1. I assume you are an iOS developer like me. That being said, I ask you to show mw a single store on earth where they do not try to get a 30-40% margin on the Items they sell. 30% is not unreasonable. They server farms are expensive, They wind and solar farms are expensive. The employees that evaluate apps, develop the developer tools, design and maintain the store all cost money. Yes, Apple is profitable but that does not justify the bellyaching I hear from fellow developers. Subscription percentage drops to 15% after the first year

        “App Store levies”, my ass, you just need to work on your logic and reasoning skills.

        1. “That being said, I ask you to show mw a single store on earth where they do not try to get a 30-40% margin on the Items they sell. 30% is not unreasonable.”

          That’s the problem though, the single store.

          Look, I have no doubt you will do what’s best for you, but what about direct selling? Not an option.

          What about using or developing your own store. Not an option.

          Do Google, MS, Amazon need Apple to distribute?
          Not an option.

          1. Thank you for your response. I agree that is a perfect world multiple distribution channels would be great but I realize that not every developer can be trusted and a curation process only works if you have complete control of the chain of custody.

            There are companies, even large ones, who’s sole source of income is tracking you and selling your information. Giving them the ability to do direct sales, even if they submit their code in advance, is a big mistake if you promote consumer protection as one of your company values.

            Just saying.

            1. Curation should be the choice of the owner of the machine, not the entity that sold it to them.

              If you buy a computer, you can choose to administer it yourself, or accept defaults, or hire an administrator. With iOS the only choice is Apple as the administrator.

            2. PS-And yet Apple gets paid billions to use Google as default search. So Apple is one of those companies too, though you allegedly paid to not be leased.

      2. dwse,

        You do understand that this is an antitrust suit, don’t you? Apple (and the Federal Trade Commission) allege that Qualcomm has used its ownership of several standards-essential patents as leverage for a predatory scheme that has essentially given them a monopoly. Even if Apple uses Intel modems—or its own—it still has to pay royalties that are not remotely fair, reasonable, and non-discriminatory (FRAND) in anyone’s eyes other than Qualcomm’s.

        Because the patents are standards-essential, Apple can’t “go elsewhere” and still have their devices work on a public cellular network

          1. A second thought…
            Say the courts rule the patent terms are in proper due to FRAND.
            Now they are in use and unbundled from the standard.
            QC would then be able to charge whatever they want from users of the IP, unless the courts further intervene.

          2. Where do you get that notion? Apple has to use the patents, and understands that it has to pay for that use. It does not have any choice in the matter. The software patents are embedded in the standard (the protocols that any cellular device must use) because Qualcomm voluntarily submitted them for inclusion. To do so, it had to contractually agree to allow anyone, including its competitors, to use the patents on payment of a FRAND royalty. All the users of the IP understand that they have to pay. Nobody questions any of that.

            What Apple and the FTC are arguing is that Qualcomm is refusing to comply with its legal obligation and is refusing to allow the use of its patents to users who have tendered proper payment. Without the patents, the standards don’t work, and without the standards, no device can work. Neither Apple nor anybody else has any alternative. Qualcomm is leveraging its standards-essential patents into a stranglehold on the mobile device industry in restraint of trade.

            If the patents are invalid, then Qualcomm isn’t entitled to any royalties at all; use of the invention is free to all. If they are valid, they can certainly charge and the users must pay (as Apple has agreed to do), but not “whatever they want” because that violates the FRAND terms in their licensing agreement with the standards organization. The courts can’t “unbundle” the embedded patents from the standard any more than they can unbundle mass from the influence of gravity. The patents and the protocols are inextricable due to science, not the law.

            1. Obviously I wasn’t expressing myself clearly.
              Please don’t tale these comments as condescending, I am verbalizing my thoughts.

              Patents are hardly a notion. The Constitution explicitly states the right of a citizen obtaining a patent, which is a time limited, scope limited monopoly, in exchange for disclosure.

              A patent holder literally owns the invention. They can do with it as they please (within the law) and can charge whatever they like. This includes doing nothing and preventing others from using the invention.

              Enter FRAND, which is an agreement between a patent holder and the standards body. It is a pre-agreed licensing standard for patents. In exchange for the invention being included in a standard, the patent holder agrees to license under FRAND terms. This is the source of the dispute, and Apple’s only, but significant, leg to stand on. Other than patent invalidation, of course. It is also here where QC has ceded a critical part of their rights.

              Should the courts find that QC abused FRAND, by not being Fair and Reasonable, as well as Discriminatory, then they can either a) Impose licensing terms or b) Invalidate the FRAND Agreement between the standards body and QC or c) Invalidate the patents (unlikely).

              If the FRAND deal is invalidated, then the patents leave the standard and QC can then charge whatever they want. The courts of course can state how that should happen.

              Most likely the courts will decide what QC should charge and avoid the mess altogether, but words like Fair, Reasonable, and Non-Disriminatory are a lawyers bread and butter.

            2. Not condescending at all. We agree that the court can invalidate the patent, validate it and hold the demanded royalty reasonable, or validate it and hold the demands unreasonable. If it chooses the first choice, nobody owes Qualcomm anything. If the second, everyone must pay what Qualcomm is demanding (Apple has escrowed billions of dollars against that possibility). If the third and last, the court must determine an appropriate remedy.

              To do so, since the parties have been unable to reach an agreement, the court really has no choice other than to make a finding of fact as to what licensing terms would be fair, reasonable, and non-discriminatory, and then order both sides to act in accordance with its finding. It cannot invalidate the agreement between Qualcomm and the standards body because no party (or anybody else, for that matter) has attacked that agreement or suggested that it is in any way improper.

              The court certainly cannot rule that “the patents leave the standard,” because the standard inextricably incorporates the patents. Without the patents, an otherwise standards-compliant device would not work. It could not connect with any cellular network anywhere in the world. Every cellphone and wireless device on the planet, and some in outer space, would become a paperweight. There is a legal maxim to the effect, “The law cannot demand an absurdity.” Your suggested remedy would violate that principle.

  2. Timmy seems increasingly unfit by the day to take care of Apple’s.

    I would not be surprised if the same type of standoff exist between Apple and NVIDIA, and I expect Netflix and Youtube to follow down the same path shortly.

    1. Tim Cook does not remotely measure up to Steve Job’s capacity to carry a grudge and refuse any compromise. I guess you figure he was unfit, too. I really don’t think the company needs a wimp who will roll over and play dead, rather than fight for his shareholders, employees, and customers. Why expect that of Tim Cook when you celebrate a certain political figure for his refusal to let anything (like facts or public opinion) deflect him from his course.

      1. I don’t recall SJ ever being in direct conflict with his suppliers to the extent it hurt technology development in the company.

        Even when IBM was unwilling to supply the PowerPC processors SJ wanted, it never took on such proportions as we witness here.

        In addition SJ took great care NOT to compete with his content developers, while Timmy is heading right down that lane, and it won’t be pretty. The same went for politics, another lane Timmy is leading the company down. As divided as particularly the US is over politics, he risks alienating half the customer potential in that country.

        1. One of the most consistent criticism of Jobs was that Apple would rather frequently let an innovative third-party developer open a new market and then either change the operating system without warning so that the software stopped working or, worse, release a free competing product that ran the commercial product off the market.

          Your memory of a politics-free Jobs is also the product of selective amnesia. He stayed out of PARTISAN politics, as does Cook, but he and the company were always in the forefront of social justice issues, such as gender equality and equal employment rights regardless of sexual orientation. Jobs stuck to his guns on that, even when it carried a substantial political and economic cost for the company.

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