1) Apple does not have a license with Qualcomm. 2) Apples' MSPR is irrelevant here since it's Foxconn who pays Qualcomm with their existing licensing agreement

1) Apple does not have a license with Qualcomm. 2) Apples' MSPR is irrelevant here since it's Foxconn who pays Qualcomm with their existing licensing agreement from pre-iPhone era. Apple outsourced their manufacturing and "licensing" to cheaper manufacturers in Asia from the getgo. Foxconn's royalty in turn is based on their manufacturing cost, not retail cost of, Apple iPhones. So the prices for the current lineup would be more like $200, $230, $250, $300, $350 and Qualcomm's 5% (without any volume discount or other "rebates" agreed upon) is probably no more than $17 and change per device at max, or less than 1% or 1.5% of Apple's MSRP, which you grossly overestimated to make your lopsided argument. The way I see it, Apple's problem here isn't that Qualcomm's licensing rates are unreasonable or something out of ordinary, but that Apple believe that while their patents are worth ~$30 per device for a handful of frivolous utility and design patents (see Apple vs Samsung 2012), everyone else's, especially those that are essential and committed to SSO, are worth $0.0000000X per device. That is why they challenged pretty much every single wireless patent holders (eg, Nokia, Ericsson, Samsung, Moto, etc) whenever their licensing contract was up for renewal (but lost or settled every single one of them). 3) >why should it cost more? I think most of us with smartphones would agree that Qualcomm's underlying tech is the single most important driver for market demand. We know from the significantly lower sales of Apple iPod, which is a perfect substitute good without Qualcomm's IP's, that Qualcomm's IP's adds significantly more value and drive market demand for Apple's iPhones. 4) >Before Apple, most device manufacturers created a variety of devices at a variety of price points so it didn't really matter... No, it always mattered and regulators in other countries have challenged Qualcomm's licensing practices to lower their rates in the past. This time around we have a domestic company with significant political connections and influence. 5) I think you are compounding a few issues that aren't quite related. IMO, it's fair to charge per device at whatever rate Qualcomm is charge if Qualcomm's IP's indeed add significant value and drive market demand for end-products. For decades, while there were always some chatter that Qualcomm's gain was unfair -- just in the same way that some see Apple's profit as excessive and unfair today -- it helped catapult the mobile communication market from the 90's to what it is today. I expect there would be a different pricing tier, with perhaps different licensing models, for IOT's and other products (ie, cars or airplanes) that aren't communication devices and whose value and market demand are not driven significantly by Qualcomm's IP's. This is common sensical stuff. 6) As I replied to your other misguided comment about FRAND, the problem here isn't that Qualcomm's licensing is discriminatory -- many would probably argue that it's equally too high. Standard Settings Organization or FRAND says nothing about what precise royalty rates or basis ought to be* -- it's to be determined by market participants by trial and error, and through negotiation -- Apple has been the least willing participant in this, having developed or contributed nothing to offer in return, other than what Apple sees as "exorbitant" licensing fees. FRAND isn't certainly about making Apple or Apple fanbois happy and changing their rates as they see it fair, reasonable, fit to improve Apple's profit margin. * note that IEEE made it an official policy to use the smallest salable patent practicing unit that embodies IP's as the royalty basis a few years back, but it is the only SSO to announce such policy.