Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies

Apple this week expanded its lawsuit against Qualcomm, accusing the wireless chipmaker of "double-dipping" by allegedly refusing to sell chips to manufacturers unless they also pay separate royalties and enter licensing agreements at unreasonable rates, according to court documents filed electronically.

qualcomm iphone 7
Qualcomm has since responded to the amended complaint, claiming that Apple is "trying to distract" from the fact that it has made alleged "misleading statements" about the comparative performance of its Snapdragon X12 modem, used in select iPhone 7 models to enable Wi-Fi and cellular connectivity.

Apple dual sources wireless chips from Qualcomm and Intel for the iPhone 7 and iPhone 7 Plus. Qualcomm's Snapdragon X12 modem is used in CDMA models, such as those sold by Verizon and Sprint, while Intel's XMM7360 modem is used in GSM models, such as those sold by AT&T and T-Mobile.

New York-based Cellular Insights last year found Qualcomm's modem to significantly outperform Intel's modem in the iPhone 7 Plus, based on simulated testing of LTE performance at different distances from a cellular tower.

Apple, however, publicly stated there is "no discernible difference" in performance between the Qualcomm and Intel modems in any of the models. Apple also threatened Qualcomm not to disclose the truth, according to Don Rosenberg, executive vice president and general counsel of Qualcomm.

Rosenberg said Apple's bigger misconception is that Qualcomm's innovations are limited to technology implemented in the cellular modem, when in fact its patented inventions are supposedly "at the heart of every iPhone" and "enable the most important uses and features" of those devices.

An excerpt from Qualcomm's statement obtained by MacRumors:

Apple says Qualcomm's innovations are limited to technology implemented in the cellular modem, when Apple knows well that Qualcomm has been the de facto R&D arm of the industry.

Qualcomm's patented inventions make possible not only connectivity and high-speed data transmission across mobile networks, but also high-precision GPS navigation, app store operations, power management and battery efficiency, mobile video including advanced compression, graphics, camera imaging and facial-recognition technology, audio quality and audio file compression, and much, much more.

Qualcomm's innovations are at the heart of every iPhone and enable the most important uses and features of those devices. It simply is untrue that Qualcomm is seeking to collect royalties for Apple innovations that have nothing to do with Qualcomm's technology.

Rosenberg added that Apple is "rarely first to market with any new technology, which shows it is relying heavily on the R&D investments in the most revolutionary technologies by companies like Qualcomm."

Apple argued that Qualcomm has been unfairly "levying its own tax" on the iPhone's innovations by charging royalties on a percentage of the entire smartphone's value, despite supplying just a single component of the device.

An excerpt from Apple's amended complaint:

As Apple innovates, Qualcomm demands more. Qualcomm had nothing to do with creating the revolutionary Touch ID, the world’s most popular camera, or the Retina display Apple’s customers love, yet Qualcomm wants to be paid as if these (and future) breakthroughs belong to it.

Qualcomm said the per-device royalty that it charges Apple's contract manufacturers for the right to use its licensed technologies in the iPhone is "less than what Apple charges for a single wall plug." The only first-party wall plug that Apple sells is a 5W USB Power Adapter for $19 in the United States.

Apple sued Qualcomm in January for $1 billion in alleged unpaid royalty rebates. Qualcomm countersued Apple for breach of contract, encouraging regulatory attacks on its business, and failing to engage in "good faith negotiations" for a license to its wireless patents on fair, reasonable, and non-discriminatory terms.

Qualcomm was the exclusive supplier of 3G and LTE modems for iPhones until last year, when Apple began dual sourcing from Intel.

Top Rated Comments

Flytrap21 Avatar
55 months ago

Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies
Article Link: Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies ('https://www.macrumors.com/2017/06/21/qualcomm-innovations-heart-of-every-iphone/')
I think that Qualcomm is missing the point... nobody - not even Apple - is saying that they should not be fairly compensated for their intellectual property. Apple is a big proponent of the protection of proprietary intellectual property rights, they would never advocate that Qualcomm should be made to forgo fair compensation for licensing their technology.

However, there are two things at stake here:
[LIST=1]
* The first is whether Qualcomm, which receives a license fee for the incorporation of its intellectual property and technology into the components manufactured by independent component manufacturers such as Foxconn, should be allowed to demand a second license fee for the same intellectual property and technology from the downstream users of those components when they incorporate the components into their products.
* The second is whether the value of Qualcomm's intellectual property and technology should be linked to the gross value of the final product within which the intellectual property or technology is being used or the value of the radio component into which it has ben incorporated. Linking it to the final product value creates a discriminatory (non-FRAND) licensing regimen, as Apple ends up paying more to Qualcomm for the same license than its competitors simply because the gross price the iPhone is higher than that of its competitors, regardless of the margins.


The current Qualcomm licensing regimen would mean that if Apple made a connected car that relied on a radio component incorporating Qualcomm's intellectual property or technology, the licensing costs would be prohibitively high as the fee would be a factor of the gross value of the connected car and not the radio components within that car. It also means that nobody would even make a connected car if the entire profit margin would have to be paid to Qualcomm, for the car to work - give how thin the margins are in the motor industry, unless Qualcomm gave the car industry favourable terms. This, in turn, would be discriminatory to a potential competitor such as Apple that is trying to break into the car industry from another industry that does not enjoy those favourable terms.

As you can see, Qualcomm has been abusing its ownership of the intellectual property and technology that is key to the standards that underpin much of our modern interconnected world. Nobody says that they should give their property away for free... but they seem to have lost sight of their commitment to license their intellectual property and technology on a Fair, Reasonable And Non-Discriminatory basis, when they submitted their intellectual property and technology to be incorporated into the standards.
Score: 17 Votes (Like | Disagree)
Kaibelf Avatar
55 months ago
So, Qualcomm thinks that FRAND doesn't apply to them because they contributed a lot or? I'm not sure exactly what their position is here, but it sounds like they want to have it both ways.
Score: 16 Votes (Like | Disagree)
elvisimprsntr Avatar
55 months ago
Apple likely sat on this while QCOM has been the sole source for cellular modems. Now that AAPL sources modems from INTC, it has some leverage. The question is if this is an indication AAPL will sole source modems from INTC for future products, including CDMA modems. Even if the QCOM modems have 1% better LTE performance, who give a **** since the INTC modems are capable of 1 Gbps and the carriers can't support it yet anyway.

The 7560 supports LTE, GSM, CDMA, and TD-SCDMA (China) in one package. This allows AAPL to have a single SKU world wide, including China. This coupled with eSIM would significantly reduce manufacturing, distribution, and inventory complexity.

https://www.intel.com/content/www/us/en/wireless-products/mobile-communications/xmm-7560-brief.html




Time to short QCOM and buy INTC!

Attachment Image
Score: 12 Votes (Like | Disagree)
navier Avatar
55 months ago
"Qualcomm Says Its Innovations Are At the Heart of Every iPhone as Battle With Apple Intensifies"

So are screws, and last time I checked there was zero innovation
Score: 6 Votes (Like | Disagree)
techwhiz Avatar
55 months ago
So basically they made a processor and are taking the praise for Apple's software running on it.

I suppose we'd better thank Intel for all the amazing things Final Cut Pro and XCode can do..
Wrong. Without the algorithms running in and on the Qualcomm chips you couldn't even connect to a cell tower, let alone to hand off between them. Let's see Apple build a phone and do all their own innovation. No outside chips....
I'll wait the 20 or so years while they spend a couple of hundred billion on R&D and develop new ways around the existing patents.

The argument you make is specious at best.
Here is an article https://www.greyb.com/starpatents-in-qualcomm-patent-portfolio/ about Qualcomm and it's patens and why they are valuable.

Apple wants to claim that Qualcomm has trivial patents and argues some are even worthless.
Hardware engineers know better and this is the bean counters and lawyers.
Veterbi was brilliant and made cell phone technology possible.

BTW - I'm not an Apple hater. I own and have owned Apple stock for almost two decades.
I'm a hardware engineer and know the value of technology.
Score: 6 Votes (Like | Disagree)
Glideslope Avatar
55 months ago
So, Qualcomm thinks that FRAND doesn't apply to them because they contributed a lot or? I'm not sure exactly what their position is here, but it sounds like they want to have it both ways.
It's the FRAND issues that will bring them back down to reality. They have their own interpretation. Apple will just keep pushing this along until Intel Has their Modems up to speed in 2018. Then cut off QC entirely. It's personal now. :apple:
Score: 5 Votes (Like | Disagree)

Top Stories

calculatorapp

iOS 11 Bug: Typing 1+2+3 Quickly in the Calculator App Won't Get You 6

Tuesday October 24, 2017 2:03 pm PDT by
A bug in the built-in Calculator app in iOS 11 is getting some major attention this week, despite the fact that it's been around since iOS 11 was in beta testing. At issue is a calculator animation that causes some symbols to be ignored when calculations are entered in rapid succession. You can try it for yourself: Type 1+2+3 and then the equals sign into the Calculator app quickly. Due to...
gradiente iphone white

Brazilian Electronics Company Revives Long-Running iPhone Trademark Dispute

Tuesday May 19, 2020 1:06 pm PDT by
Apple has been involved in a long-running iPhone trademark dispute in Brazil, which was revived today by IGB Electronica, a Brazilian consumer electronics company that originally registered the "iPhone" name in 2000. IGB Electronica fought a multi-year battle with Apple in an attempt to get exclusive rights to the "iPhone" trademark, but ultimately lost, and now the case has been brought to...
iPhone 13 Dummy Thumbnail 2

Full iPhone 13 Feature Breakdown: Everything Rumors Say We Can Expect

Tuesday August 31, 2021 7:50 am PDT by
With the launch of Apple's iPhone 13 lineup believed to be just a few weeks away, we have compiled all of the coherent rumors from our coverage over the past year to build a full picture of the features and upgrades coming to the company's new smartphones. For clarity, only explicit improvements, upgrades, and new features compared to the iPhone 12 lineup are listed. It is worth noting that...
original iphone

Phil Schiller Says iPhone Was 'Earth-Shattering' Ten Years Ago and Remains 'Unmatched' Today

Monday January 9, 2017 7:15 am PST by
To commemorate the tenth anniversary of the iPhone, Apple marketing chief Phil Schiller sat down with tech journalist Steven Levy for a wide-ranging interview about the smartphone's past, present, and future. The report first reflects upon the iPhone's lack of support for third-party apps in its first year. The argument inside Apple was split between whether the iPhone should be a closed...
iPhone 13 Dummy Thumbnail 2

Kuo: iPhone 13 to Feature LEO Satellite Communications to Make Calls and Texts Without Cellular Coverage

Sunday August 29, 2021 7:39 am PDT by
The iPhone 13 will feature low earth orbit (LEO) satellite communication connectivity to allow users to make calls and send messages in areas without 4G or 5G coverage, according to the reliable analyst Ming-Chi Kuo. In a note to investors, seen by MacRumors, Kuo explained that the iPhone 13 lineup will feature hardware that is able to connect to LEO satellites. If enabled with the relevant...
maxresdefault

New MacBook Pro Models Coming at WWDC, Suggests Leaker

Monday May 24, 2021 1:27 pm PDT by
New MacBook Pro models are coming at WWDC, according to leaker Jon Prosser who has a mixed track record when it comes to predicting Apple's plans. Subscribe to the MacRumors YouTube channel for more videos. Prosser provided no additional information, but there are new 14 and 16-inch MacBook Pro models in the works. The new MacBook Pros will feature the most radical redesign to the MacBook Pro ...
omg lightning cable comparison

Security Researcher Develops Lightning Cable With Hidden Chip to Steal Passwords

Thursday September 2, 2021 6:59 am PDT by
A normal-looking Lightning cable that can used to steal data like passwords and send it to a hacker has been developed, Vice reports. The "OMG Cable" compared to Apple's Lightning to USB cable. The "OMG Cable" works exactly like a normal Lightning to USB cable and can log keystrokes from connected Mac keyboards, iPads, and iPhones, and then send this data to a bad actor who could be over a...
iphone 12 colors 2021

iPhone 12 Colors: Deciding on The Right Color

Thursday November 5, 2020 8:35 am PST by
The iPhone 12 and iPhone 12 Pro arrived last October in a range of color options, with entirely new hues available on both devices, as well as some popular classics. The 12 and 12 Pro have different color choices, so if you have your heart set on a particular shade, you might not be able to get your preferred model in that color. iPhone 12 mini and iPhone 12 The iPhone 12 mini and iPhone 12...
Top Stories 75 Thumbnail

Top Stories: Last-Minute iPhone 13 Rumors, Apple Announces App Store Changes, and More

Saturday September 4, 2021 6:00 am PDT by
The finish line is in sight! Apple's annual iPhone event is likely just a week or so away and all eyes will be on the company as it unveils the next version of its most popular product line. With any luck, we'll also see the next-generation Apple Watch and perhaps even some new AirPods. Other news this week saw Apple making some more changes to its App Store policies in response to a...
M1X MBP Feature

Leaker: Upcoming MacBook Pro to See Price Hike Over Current Model, Equal Performance Across 14 and 16-Inch Sizes

Tuesday August 24, 2021 5:28 am PDT by
The upcoming 14-inch MacBook Pro is set to be more expensive than the current 13-inch MacBook Pro and both the 14 and 16-inch models will offer the same performance, according to the leaker known as "Dylandkt." The leaker shared the information on Twitter, explaining that both of the upcoming MacBook Pro models, expected to come in 14 and 16-inch sizes, will feature the same performance due...