Qualcomm on Wednesday filed yet another lawsuit against Apple, this time accusing the company of breaching software licensing terms and using Qualcomm code to help Intel, reports Bloomberg.
According to Qualcomm, Apple breached a contract that dictates the use of software that's designed to make Qualcomm chips work with other iPhone components. Qualcomm also believes Apple may have used its access to that software to help Intel with its own modem chip development.
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Since 2016, Apple has been using LTE chips from both Intel and Qualcomm in an effort to diversify its supply chain and move some production away from Qualcomm. The iPhone 7, 7 Plus, 8, and 8 Plus all use a mix of Qualcomm and Intel chips.
In light of the ongoing legal battle with Qualcomm, Apple is said to be considering eliminating Qualcomm chips from its devices all together, instead adopting chips from Intel and possibly MediaTek. Rumors suggest Qualcomm has been withholding software from Apple that Apple needs to test prototype devices for next year, forcing Apple's hand.
Qualcomm and Apple have been involved in an escalating legal fight since the beginning of the year after Apple sued Qualcomm for $1 billion. Apple has accused Qualcomm of charging unfair royalties for "technologies they have nothing to do with" and failing to pay for quarterly rebates.
Apple has since stopped paying royalties to Qualcomm until new licensing fees have been worked out, as have Apple suppliers, significantly impacting Qualcomm's profits.
Qualcomm has since levied several lawsuits against Apple, accusing the company of patent infringement and asking both the United States and China to block imports and exports of some iPhone models.
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In light of the ongoing legal battle with Qualcomm, Apple is said to be considering eliminating Qualcomm chips ('https://www.macrumors.com/2017/10/30/apple-future-iphone-no-qualcomm-chips/') from its devices all together, instead adopting chips from Intel and possibly MediaTek.
Great. So Apple would basically be selling phones with the same chips used by iPhone clones in China.Apple has since stopped paying royalties to Qualcomm until new licensing fees have been worked out, as have Apple suppliers, significantly impacting Qualcomm's profits.
Can you imagine Apple's reaction if their own retailers decided to stop making payments for millions of iPhones they've taken delivery of and sold, until "new fees had been worked out"???It's over for these guys and they have got to be realizing that. I'd say Apple has been working on their own chips already. Once released, GAME OVER MAN, GAME OVER!
It doesn't matter whose chips they use. They still have to pay Qualcomm (and Nokia, Ericsson, LG, Samsung, etc) royalties for the IP involved.Forget that Qualcomm makes chips on the side. That's just a small part of their profit stream.
I honestly didn't know that Qualcomm is in such a bad shape ... sound like they are very desperate looking for a new business model and try to blame failures on Apple.
You've got it backwards. It's Apple who is acting like they cannot pay a few bucks royalty on phones they charge customers hundreds for.Well, if you are not innovative any more and run out of products to sell, then you start to sue the big guys. Did they file in some district court in northern Texas?
Qualcomm basically invented the core of 3G, and is a major contributor to 4G (LTE) and beyond.They spend billions each year on R&D, and get about 3,000 patents per year.
In other words, you can greatly thank them for the high data speeds you enjoy today and in the future.
Why on earth would it make ANY business sense to rely on a SINGLE vendor that charges a percentage on the ENTIRE COST of the phone?
Yours is a very common mistake. You are mixing up two totally separate things (as Apple hoped you will), chips and IP.CHIPS - The chip vendor side of Qualcomm sells each part at a fixed price. Apple can buy those chips, or chips from anyone else who sells a chip for less. Which they do already, having used chips from Infineon, Intel (who bought Infineon) and Qualcomm.
IP - But chips are just silicon, sold at a price reflecting what it took to design and manufacture them. They do NOT REPEAT NOT include all the IP surrounding them or software needed to run them, for which a device maker must pay all the companies who created that IP / software.
Think of it like the difference between selling an ARM chip and if Apple were to license iOS. They're not the same thing, and the chip would not include a license for the OS. Likewise a modem chip is just a fancy CPU (DSP), useless without code to run it.
Here are just some of the inventors whom a phone maker has to pay to utilize 3G:
And guess what? Most of them charge by the device cost. Just as with the App Store, everyone pays a percentage. In that way, higher cost products subsidize lower cost products, leading to more customers for everyone. It's a common way of licensing IP.
Apple is not just targeting Qualcomm. They want to shave royalties to everyone. Even though they've made hundreds of billions themselves selling phones that rely on the IP of others.
When this is all over, they will get a big infusion of cash from back payments. How much that will be is yet to be determined. The continuing escalation is fascinating. I wonder how much it stands to lose if Apple does decide to build their own modem chip (ideally integrated in a future Ax SoC). Patent licensing is their largest revenue source, but losing the chip revenue would not be good.
It's over for these guys and they have got to be realizing that. I'd say Apple has been working on their own chips already. Once released, GAME OVER MAN, GAME OVER!