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My prediction is that once Apple has their own modem IP working and is not dependent on Qualcomm, the next release of MacBook Pro will have a builtin modem. Thi

My prediction is that once Apple has their own modem IP working and is not dependent on Qualcomm, the next release of MacBook Pro will have a builtin modem. This why I am asking about the patent/royalty situation and not making assumptions or apologies about Apple's process. Would someone like to bet against this? I would like to invest in a prediction market for this.

bradknowles 3y ago
The company Apple bought had functional modems that they were selling to a lot of customers, before the acquisition. So, Apple could just ship those. But they were always markedly inferior to what Qualcomm had, and those customers were willing to take the lower quality for much lower price. Apple thought that they had designed and built their own CPUs, GPUs, etc... so they could easily take this inferior product and turn it into something that was at least as good as what Qualcomm has. They were wrong. The problems they're trying to solve are partly patent encumbered, but only partly. It turns out that the same ecosystem advantages that Apple enjoys around some of their products are also the same effects that protect Qualcomm from competitors, and even as big as Apple is, they still can't break down those ecosystem barriers. Since Apple is not willing to ship a markedly inferior product, that means they're stuck using Qualcomm modems, until their internal teams can deliver on what they promised. If they can deliver.
- mcculley 3y ago
  We agree that Apple is stuck with Qualcomm. I remain unconvinced that the reason they can put a modem in my watch and not in the top of the line MacBook Pro is for simple market reasons. “Qualcomm licenses all its patents as a group. For a set fee -- based on the selling price of the end device” according to https://www.cnet.com/tech/mobile/apple-and-qualcomm-settle-heres-what-it-means-for-your-next-iphone/ https://www.cnet.com/tech/mobile/apple-and-qualcomm-settle-h...
  - bradknowles 3y ago
    This is a company that spends millions and millions of dollars every year, shaving a fraction of a millimeter here and a fraction of an ounce there. The absolute last thing they want to do is add new hardware functionality that won't be used by the bulk of the market. When you squit out 50 models of something per year (like Samsung phones), you can afford for some of them to be more niche products that won't get as wide adoption. When you have only two or three variations on a single product for that year (like Apple), you can't afford that. Instead, you have to make sure that all the features you offer are either used or usable by the majority of the customers, or that adding those features allows you to add enough to the price that the small number of people who would buy that product for those features will give you a sufficiently high return on your investment that you will be able to at least maintain your profit margin. There just aren't enough people in the market like you who are unwilling to tether and that fact alone is enough to push them to hardware being made by a different company. I want the integrated SIM or e-SIM myself, but I'm willing to tether if the integrated option isn't available. So, I'm part of the market that Apple is addressing. In contrast, you're not willing to tether, and so you buy hardware from a different company, and therefore not part of the segment they are addressing. Apple has repeatedly demonstrated that there are segments of the market that they're not willing to chase, and this is one of those situations.
    - mcculley 3y ago
      We will see when Apple starts shipping their own modem. I know what I am betting on. Would you like to take the other side of the bet? I do appreciate your faith in the EMH.
      - bradknowles 3y ago
        I'm not convinced that they will ever be shipping their own modem. Or, if they do, I suspect that the reason will be that antitrust laws have forced Qualcomm to make changes to their business model which causes cracks in their ecosystem which Apple is then able to take advantage of. Even then, I think it would be a decade or more before Apple could start shipping their modem. Either that, or Apple gets fed up with the whole situation and just buys Qualcomm outright, then maybe strips the components and IP licenses they want, and then turns around and sells the dregs back to the market. But then that would endanger Apple to be the main target of those same kinds of antitrust laws. Given as entrenched and both Apple and Qualcomm are, I'm not willing to make any bets between the Irresistible Force and the Unbreakable Object.

bradknowles 3y ago

The company Apple bought had functional modems that they were selling to a lot of customers, before the acquisition. So, Apple could just ship those. But they were always markedly inferior to what Qualcomm had, and those customers were willing to take the lower quality for much lower price. Apple thought that they had designed and built their own CPUs, GPUs, etc... so they could easily take this inferior product and turn it into something that was at least as good as what Qualcomm has. They were wrong. The problems they're trying to solve are partly patent encumbered, but only partly. It turns out that the same ecosystem advantages that Apple enjoys around some of their products are also the same effects that protect Qualcomm from competitors, and even as big as Apple is, they still can't break down those ecosystem barriers. Since Apple is not willing to ship a markedly inferior product, that means they're stuck using Qualcomm modems, until their internal teams can deliver on what they promised. If they can deliver.

mcculley 3y ago
We agree that Apple is stuck with Qualcomm. I remain unconvinced that the reason they can put a modem in my watch and not in the top of the line MacBook Pro is for simple market reasons. “Qualcomm licenses all its patents as a group. For a set fee -- based on the selling price of the end device” according to https://www.cnet.com/tech/mobile/apple-and-qualcomm-settle-heres-what-it-means-for-your-next-iphone/ https://www.cnet.com/tech/mobile/apple-and-qualcomm-settle-h...
- bradknowles 3y ago
  This is a company that spends millions and millions of dollars every year, shaving a fraction of a millimeter here and a fraction of an ounce there. The absolute last thing they want to do is add new hardware functionality that won't be used by the bulk of the market. When you squit out 50 models of something per year (like Samsung phones), you can afford for some of them to be more niche products that won't get as wide adoption. When you have only two or three variations on a single product for that year (like Apple), you can't afford that. Instead, you have to make sure that all the features you offer are either used or usable by the majority of the customers, or that adding those features allows you to add enough to the price that the small number of people who would buy that product for those features will give you a sufficiently high return on your investment that you will be able to at least maintain your profit margin. There just aren't enough people in the market like you who are unwilling to tether and that fact alone is enough to push them to hardware being made by a different company. I want the integrated SIM or e-SIM myself, but I'm willing to tether if the integrated option isn't available. So, I'm part of the market that Apple is addressing. In contrast, you're not willing to tether, and so you buy hardware from a different company, and therefore not part of the segment they are addressing. Apple has repeatedly demonstrated that there are segments of the market that they're not willing to chase, and this is one of those situations.
  - mcculley 3y ago
    We will see when Apple starts shipping their own modem. I know what I am betting on. Would you like to take the other side of the bet? I do appreciate your faith in the EMH.
    - bradknowles 3y ago
      I'm not convinced that they will ever be shipping their own modem. Or, if they do, I suspect that the reason will be that antitrust laws have forced Qualcomm to make changes to their business model which causes cracks in their ecosystem which Apple is then able to take advantage of. Even then, I think it would be a decade or more before Apple could start shipping their modem. Either that, or Apple gets fed up with the whole situation and just buys Qualcomm outright, then maybe strips the components and IP licenses they want, and then turns around and sells the dregs back to the market. But then that would endanger Apple to be the main target of those same kinds of antitrust laws. Given as entrenched and both Apple and Qualcomm are, I'm not willing to make any bets between the Irresistible Force and the Unbreakable Object.