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Almost ten years ago now, Qualcomm and Apple began suing each other. Apple's position was Qualcomm was playing hardball with patents that ought have a FRAND lic

Almost ten years ago now, Qualcomm and Apple began suing each other. Apple's position was Qualcomm was playing hardball with patents that ought have a FRAND license. Qualcomm's position was Apple was being mean, and then also to sue various downstream part contractors for not paying royalties they claimed were owed to them but that Apple was contesting. In general Apple won more of the litigation than they lost (but not all), and the litigation eventually ended in a large settlement. But Apple said at the time of the settlement, that it was untenable to have to source all of their LTE stuff from Qualcomm and they planned to secure their supply chain in the coming years. This is that statement now coming to fruition. So in toto, my impression is that this isn't fundamentally about seeking any particular cost savings or technical difference, so much as it Apple trying to disentangle themselves from external suppliers who they view as hostile or undependable.

crazygringo 4y ago
Thank you! That's incredibly helpful context.
bombcar 4y ago
Apple has enough cash on hand to buy 1/3 to half of Qualcomm but the government would likely shut that down quite quickly. So they’ll roll their own. They built a CPU so a modem shouldn’t be incredibly difficult.
- nerdjon 4y ago
  This isn't quite them just building their own. Or at least presumably. in 2019 they bought the modem business from Intel.
  - tnel77 4y ago
    I feel like this is getting a little nuanced. “They bought a company to get a head start, thus they didn’t actually create their own modem.” It’s been roughly four years since that purchase. Surely they’ve done some work since then that would justify labeling it as “Apple created their own modem.” I feel like this would be comparable to me saying I cooked dinner and someone replying “you bought the food from Kroger and the cookbook from Barnes & Noble, so it doesn’t count” while I stare at a pile of dirty dishes like “sure feels like it counts.”
    - joezydeco 4y ago
      The PASemi team took two years from acquisition to first Apple silicon. I'm guessing the Intel stuff was a lot messier. It's not like Intel was a streamlined company that excelled at embedded SoCs.
      - meepmorp 4y ago
        At least a couple of those years were the pandemic, so that might've affected some timelines.
    - nerdjon 4y ago
      I agree with where you are going with that, but the person I responded too mentioned that they could buy a part part of qualcom but instead just made their own. But instead they bought part of intel. It doesn't diminish what Apple is building, but I think given the context it is important.
      - bombcar 4y ago
        I was more emphasizing that if Apple was willing to "go it alone" on their CPUs (which they did by an acquisition, to be sure) then they probably have no issue at all "going alone" on the radio/modem, and I'm actually a bit surprised they didn't do that first - I guess modems are more complicated/difficult than CPUs.
tooltalk 4y ago
First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. Second, likewise, Apple sued every single wireless patent holders (eg, Nokia, Ericsson, Qualcomm, etc) to negotiate better licensing terms -- but, to be fair, it's not uncommon for other smartphone OEMs to do so in court. Third, Apple's legal argument was always that Qualcomm's per-device (ie, final product) royalty basis licensing offer was not FRAND. Apple believes that the royalty should be based on the cost of Qualcomm's chips instead. But, of course, there is no legal basis or industry practice to support Apple's unfounded claim and, consequently, LOST EVERY lawsuit based on this claim for past 10+ years. Fourth, "... then also to sue various downstream part contractors ..." No, you don't sue everyone in supply-chain. The wireless patent holders collect their royalty only once and at the top of the supply-chain, ie, smartphone OEMs, to maximize their profit. and that's been the industry practice for much of the past 25+ years (possibly even longer). Fifth, "... it was untenable to have to source all of their LTE stuff from Qualcomm ..." Umm.. Stop, stop, stop! So in conclusion, it's all about saving Apple's margin, that's all. I don't blame any company for trying to minize their cost, but the recent event with Qualcomm, ie, FTC's attack on Qualcomm with Apple orchestrating behind the curtain, was highly unethical and abuse of their political power. PS. insulting languages removed
- sonofhans 4y ago
  You know, you can disagree without including the insulting language. That will lead to more and better discussion.
  - izacus 4y ago
    There's nothing seriously insulting in that post. Calling out biased Apple defenders for their misleading claims isn't an insult no matter how much some would want it.
- kevin_thibedeau 4y ago
  > Apple believes that the royalty should be based on the cost of Qualcomm's chips instead Sounds great. Apple should also base their app store tax on the cost of hosting.
mschuster91 4y ago
Interesting that no one talks about the elephant in the room - why are technologies for supposed public standards patentable in the first place? IMO, all standards that are mandated to be used by a government or a regulatory agency should be patent and royalty free and accessible by everyone, alone to have a healthy competition space instead of (effectively) a Qualcomm monopoly on the vendor side.
- giantrobot 4y ago
  > why are technologies for supposed public standards patentable in the first place Because they were developed in private by the stakeholders and then submitted as part of the standardization process. Money did get spent. At the core of the situation is multiple private companies all contribute technology towards a standard that a larger group of companies can implement. Without the option of license fees there's little incentive for companies to invest in developing these technologies. Part of the standardization process is making the patent licenses available at a "fair and reasonable" rate (FRAND). When the patent holders have large patent pools of their own they cross-license in lieu or in addition to paying actual license fees.
  - mschuster91 4y ago
    Governments could also push for these standards to be developed at universities or pay companies to develop them, to be then openly released.
    - giantrobot 4y ago
      Universities aren't always better than private companies with respect to patents and licensing. Sometimes they're much worse because there's no real reciprocity of licensing. Governments could set up national labs to develop communication technologies but they're not going to be competitive with private companies pay wise. If you're a radio engineer you can be stuck on a government schedule salary or get a nice six figure "Tech Company" salary and fat stock options. Why work at the government lab when your same skills will get to twice as much at Apple or Qualcomm? I'm not arguing for the status quo but the alternatives aren't necessarily better for the public nor the engineers doing the work.

crazygringo 4y ago

Thank you! That's incredibly helpful context.

bombcar 4y ago

Apple has enough cash on hand to buy 1/3 to half of Qualcomm but the government would likely shut that down quite quickly. So they’ll roll their own. They built a CPU so a modem shouldn’t be incredibly difficult.

nerdjon 4y ago
This isn't quite them just building their own. Or at least presumably. in 2019 they bought the modem business from Intel.
- tnel77 4y ago
  I feel like this is getting a little nuanced. “They bought a company to get a head start, thus they didn’t actually create their own modem.” It’s been roughly four years since that purchase. Surely they’ve done some work since then that would justify labeling it as “Apple created their own modem.” I feel like this would be comparable to me saying I cooked dinner and someone replying “you bought the food from Kroger and the cookbook from Barnes & Noble, so it doesn’t count” while I stare at a pile of dirty dishes like “sure feels like it counts.”
  - joezydeco 4y ago
    The PASemi team took two years from acquisition to first Apple silicon. I'm guessing the Intel stuff was a lot messier. It's not like Intel was a streamlined company that excelled at embedded SoCs.
    - meepmorp 4y ago
      At least a couple of those years were the pandemic, so that might've affected some timelines.
  - nerdjon 4y ago
    I agree with where you are going with that, but the person I responded too mentioned that they could buy a part part of qualcom but instead just made their own. But instead they bought part of intel. It doesn't diminish what Apple is building, but I think given the context it is important.
    - bombcar 4y ago
      I was more emphasizing that if Apple was willing to "go it alone" on their CPUs (which they did by an acquisition, to be sure) then they probably have no issue at all "going alone" on the radio/modem, and I'm actually a bit surprised they didn't do that first - I guess modems are more complicated/difficult than CPUs.

tooltalk 4y ago

First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. Second, likewise, Apple sued every single wireless patent holders (eg, Nokia, Ericsson, Qualcomm, etc) to negotiate better licensing terms -- but, to be fair, it's not uncommon for other smartphone OEMs to do so in court. Third, Apple's legal argument was always that Qualcomm's per-device (ie, final product) royalty basis licensing offer was not FRAND. Apple believes that the royalty should be based on the cost of Qualcomm's chips instead. But, of course, there is no legal basis or industry practice to support Apple's unfounded claim and, consequently, LOST EVERY lawsuit based on this claim for past 10+ years. Fourth, "... then also to sue various downstream part contractors ..." No, you don't sue everyone in supply-chain. The wireless patent holders collect their royalty only once and at the top of the supply-chain, ie, smartphone OEMs, to maximize their profit. and that's been the industry practice for much of the past 25+ years (possibly even longer). Fifth, "... it was untenable to have to source all of their LTE stuff from Qualcomm ..." Umm.. Stop, stop, stop! So in conclusion, it's all about saving Apple's margin, that's all. I don't blame any company for trying to minize their cost, but the recent event with Qualcomm, ie, FTC's attack on Qualcomm with Apple orchestrating behind the curtain, was highly unethical and abuse of their political power. PS. insulting languages removed

sonofhans 4y ago
You know, you can disagree without including the insulting language. That will lead to more and better discussion.
- izacus 4y ago
  There's nothing seriously insulting in that post. Calling out biased Apple defenders for their misleading claims isn't an insult no matter how much some would want it.
kevin_thibedeau 4y ago
> Apple believes that the royalty should be based on the cost of Qualcomm's chips instead Sounds great. Apple should also base their app store tax on the cost of hosting.

mschuster91 4y ago

Interesting that no one talks about the elephant in the room - why are technologies for supposed public standards patentable in the first place? IMO, all standards that are mandated to be used by a government or a regulatory agency should be patent and royalty free and accessible by everyone, alone to have a healthy competition space instead of (effectively) a Qualcomm monopoly on the vendor side.

giantrobot 4y ago
> why are technologies for supposed public standards patentable in the first place Because they were developed in private by the stakeholders and then submitted as part of the standardization process. Money did get spent. At the core of the situation is multiple private companies all contribute technology towards a standard that a larger group of companies can implement. Without the option of license fees there's little incentive for companies to invest in developing these technologies. Part of the standardization process is making the patent licenses available at a "fair and reasonable" rate (FRAND). When the patent holders have large patent pools of their own they cross-license in lieu or in addition to paying actual license fees.
- mschuster91 4y ago
  Governments could also push for these standards to be developed at universities or pay companies to develop them, to be then openly released.
  - giantrobot 4y ago
    Universities aren't always better than private companies with respect to patents and licensing. Sometimes they're much worse because there's no real reciprocity of licensing. Governments could set up national labs to develop communication technologies but they're not going to be competitive with private companies pay wise. If you're a radio engineer you can be stuck on a government schedule salary or get a nice six figure "Tech Company" salary and fat stock options. Why work at the government lab when your same skills will get to twice as much at Apple or Qualcomm? I'm not arguing for the status quo but the alternatives aren't necessarily better for the public nor the engineers doing the work.