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First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. Second, likewise, Apple sued every single wireless patent holde

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.
- jboydyhacker 4y ago
  Solid response.
doix 4y ago
> First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. This is just unequivocally false. I used to work for a semiconductor company that was a supplier for Apple. Apple would pay a premium compared to other companies. The semiconductor game is kind of rigged, assuming you don't have your own fab, everyone knows your costs. They know how much a wafer costs and they know the size of your device, so they have a pretty good idea of what it costs you per device (they don't know your yield, but can guess a range). Everyone uses that information to keep your profit margins fairly low. Apple would pay a premium compared to other manufacturers. You could probably look at the financial reports of various apple suppliers and reverse engineer that information. Apple is extremely risk averse, them making their own modems is almost certainly about reducing supply chain risk. Profit margins will be lower down on the priority list. They can just increase the price of the phone to improve those. For the record, I am not an Apple fan, I disliked working for one of their suppliers and dislike their products. But they do pay their suppliers a premium.
- daniel_reetz 4y ago
  Some suppliers are paid a premium. Some get absolutely squeezed. Just depends. I'm glad you were on the premium side.
j16sdiz 4y ago
> 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. Did you check FTC v Qualcomm antitrust case? Can you stop your lies?
- tooltalk 4y ago
  >> Did you check FTC v Qualcomm antitrust case? Can you stop your lies? Sure, isn't that the case Qualcomm reversed and won? Sure, most legal analysts had expected Apple's sweetheart judge Lucy Koh to hand a victory to FTC as it was no coincidence how the case ended up on her desk in the first place. This was however unanimously reversed due to its flawed constrution of Qualcomm's monopoly in premium LTE market and Judge Koh's expansive interpretation (in favor of Apple/FTC). But wrt Apple's claim on royalty basis? Not so much.
- tooltalk 4y ago
  >>Can you stop your lies? When are you going to stop spreading misinformation?
GeekyBear 4y ago
> 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. Qualcomm demanded a percentage of the retail selling price of phones using it's modems. Similarly, Google bought Motorola for it's patent portfolio and famously lost a lawsuit against Microsoft after demanding a 2.5% cut of the retail cost of Microsoft hardware (estimated to be about 4 Billion dollars a year) using it's standards essential patents. > Motorola sent a letter to Microsoft asking it to pay as much as $4 billion per year to license patents relating to the 802.11 standard that underpins Wi-Fi and the H.264 video encoding standard. https://www.computerworld.com/article/2955773/microsoft-bests-google-in-patent-case-appeal.html https://www.computerworld.com/article/2955773/microsoft-best... Google lost the case and the appeal, and the courts imposed a flat 3 million dollar per year licensing fee instead of the ~4 Billion a year that Google demanded. https://www.vox.com/2015/7/30/11615248/google-loses-bid-to-overturn-low-cost-patent-licenses-to-microsoft https://www.vox.com/2015/7/30/11615248/google-loses-bid-to-o... So, this is hardly an unfounded claim.
- tooltalk 4y ago
  >> " ... Qualcomm demanded a percentage of the retail selling price of phones using it's modems. ..." No, that's not how it works. Apple does NOT have licensing agreement with Qualcomm. Apple's contract manufacturer, or CM's -- such as Foxconn -- are the primary licensees of Qualcomm's wireless portfolio. Apple's royalty -- or indirect payment to Qualcomm via CM's -- likewise is based on Foxconn's pre-existing licensing agreement with Qualcomm (which even predates Apple's first iPhone) and on Foxconn's manufacturing/wholesale price, which is typically 1/3 or 1/4 of Apple's retail price (often under $400 -- not surprisingly Qualcomm's licensing fee maxes out at $400). >> Similarly, ... ( using it's standards essential patents. ... So, this is hardly an unfounded claim. The Motorola case does not support Apple's royalty-basis theory at all, First, Judge Robart does not invalidate end-user device as royalty-basis, or favors SSPPU promoted by Apple. Second, his decision was based on two critical considerations: merits/value contribution/significance of the patents asserted against Microsoft. And, in order to determine an appropriate price/range, if there existed any comparable RAND licensing practice adapted by other patent holders in the industry. In Motorola's case, their patents were relatively frivolous and insignificant in value/merit contributed, and their royalty rates were simply out of whack -- certainly 1000x out of common industry practice in the video encoding/802.11 wireless business. Qualcomm is an industry pioneer with numerous seminal contribution under their belt. Their licensing practice also conforms with long-held de facto industry practices; though there are some aspects of their licensing business that are bit quite anticompetitive -- royalty-basis is not among them however.
kasabali 4y ago
Please disclose if you're invested in Qualcomm in any way.
- tooltalk 4y ago
  Please disclose if you're invested in Apple in any way.

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.

jboydyhacker 4y ago
Solid response.

doix 4y ago

> First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. This is just unequivocally false. I used to work for a semiconductor company that was a supplier for Apple. Apple would pay a premium compared to other companies. The semiconductor game is kind of rigged, assuming you don't have your own fab, everyone knows your costs. They know how much a wafer costs and they know the size of your device, so they have a pretty good idea of what it costs you per device (they don't know your yield, but can guess a range). Everyone uses that information to keep your profit margins fairly low. Apple would pay a premium compared to other manufacturers. You could probably look at the financial reports of various apple suppliers and reverse engineer that information. Apple is extremely risk averse, them making their own modems is almost certainly about reducing supply chain risk. Profit margins will be lower down on the priority list. They can just increase the price of the phone to improve those. For the record, I am not an Apple fan, I disliked working for one of their suppliers and dislike their products. But they do pay their suppliers a premium.

daniel_reetz 4y ago
Some suppliers are paid a premium. Some get absolutely squeezed. Just depends. I'm glad you were on the premium side.

j16sdiz 4y ago

> 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. Did you check FTC v Qualcomm antitrust case? Can you stop your lies?

tooltalk 4y ago
>> Did you check FTC v Qualcomm antitrust case? Can you stop your lies? Sure, isn't that the case Qualcomm reversed and won? Sure, most legal analysts had expected Apple's sweetheart judge Lucy Koh to hand a victory to FTC as it was no coincidence how the case ended up on her desk in the first place. This was however unanimously reversed due to its flawed constrution of Qualcomm's monopoly in premium LTE market and Judge Koh's expansive interpretation (in favor of Apple/FTC). But wrt Apple's claim on royalty basis? Not so much.
tooltalk 4y ago
>>Can you stop your lies? When are you going to stop spreading misinformation?

GeekyBear 4y ago

> 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. Qualcomm demanded a percentage of the retail selling price of phones using it's modems. Similarly, Google bought Motorola for it's patent portfolio and famously lost a lawsuit against Microsoft after demanding a 2.5% cut of the retail cost of Microsoft hardware (estimated to be about 4 Billion dollars a year) using it's standards essential patents. > Motorola sent a letter to Microsoft asking it to pay as much as $4 billion per year to license patents relating to the 802.11 standard that underpins Wi-Fi and the H.264 video encoding standard. https://www.computerworld.com/article/2955773/microsoft-bests-google-in-patent-case-appeal.html https://www.computerworld.com/article/2955773/microsoft-best... Google lost the case and the appeal, and the courts imposed a flat 3 million dollar per year licensing fee instead of the ~4 Billion a year that Google demanded. https://www.vox.com/2015/7/30/11615248/google-loses-bid-to-overturn-low-cost-patent-licenses-to-microsoft https://www.vox.com/2015/7/30/11615248/google-loses-bid-to-o... So, this is hardly an unfounded claim.

tooltalk 4y ago
>> " ... Qualcomm demanded a percentage of the retail selling price of phones using it's modems. ..." No, that's not how it works. Apple does NOT have licensing agreement with Qualcomm. Apple's contract manufacturer, or CM's -- such as Foxconn -- are the primary licensees of Qualcomm's wireless portfolio. Apple's royalty -- or indirect payment to Qualcomm via CM's -- likewise is based on Foxconn's pre-existing licensing agreement with Qualcomm (which even predates Apple's first iPhone) and on Foxconn's manufacturing/wholesale price, which is typically 1/3 or 1/4 of Apple's retail price (often under $400 -- not surprisingly Qualcomm's licensing fee maxes out at $400). >> Similarly, ... ( using it's standards essential patents. ... So, this is hardly an unfounded claim. The Motorola case does not support Apple's royalty-basis theory at all, First, Judge Robart does not invalidate end-user device as royalty-basis, or favors SSPPU promoted by Apple. Second, his decision was based on two critical considerations: merits/value contribution/significance of the patents asserted against Microsoft. And, in order to determine an appropriate price/range, if there existed any comparable RAND licensing practice adapted by other patent holders in the industry. In Motorola's case, their patents were relatively frivolous and insignificant in value/merit contributed, and their royalty rates were simply out of whack -- certainly 1000x out of common industry practice in the video encoding/802.11 wireless business. Qualcomm is an industry pioneer with numerous seminal contribution under their belt. Their licensing practice also conforms with long-held de facto industry practices; though there are some aspects of their licensing business that are bit quite anticompetitive -- royalty-basis is not among them however.

kasabali 4y ago

Please disclose if you're invested in Qualcomm in any way.

tooltalk 4y ago
Please disclose if you're invested in Apple in any way.