Apple Would Get No Glory
The world last week was rightly agog when Tech uber-giant Apple became the first company on the planet ever to top a $1 trillion market cap.
And many people think that’s only the beginning.
VC Gene Munster: Apple Is in a ‘Paradigm Shift’ That Will Make It Worth Even More than $1 Trillion
How did Apple get here? Sure, they sell several products and services. But let us not kid ourselves.
The reason Apple is Apple – is the iPhone.
Apple uber-fan – and creator of modern syndicated radio – Rush Limbaugh acknowledged this on his show on Monday:
“Trillion-dollar value for Apple? Pfft! Bragging rights. I mean, it’s not… Pfft! They’re just the first to get there. It’s a big deal.
“What do they sell? Stop and think of this. What do they sell? They sell iPhones. (interruption) No, the iPhone is what… (interruption) Well, no, the services business for Apple is approaching $9 billion to $10 billion a year, which is a Fortune 300 business in and of itself.
“The services business is (chuckles) just you buying music or downloading or joining the iCloud Music Library, Apple Music, whatever. Their install base is so massive now that the watch business and all….
“But basically it’s the iPhone that’s done this. It’s stunning when you stop and think about – and they have been able… They introduced a $1,000 iPhone last year, and it moved their average selling price per phone to up to 700 bucks, and they sell 200 million of them a year – 200 million plus.”
The iPhone is driving the Apple locomotive. And it is no doubt a great product – I myself am on my sixth or seventh.
But in all of the media hoopla surrounding Apple’s massive market cap – a very important issue wasn’t raised once, to the best of my knowledge and Web searching.
Apple got here – via the massive trafficking of stolen goods. Actually – the stolen guts within the goods.
What do we mean?
The reasons Apple’s iPhone is at all interesting – are the patented ideas developed by American company Qualcomm.
To name but one slightly important development – Qualcomm invented the way mobile phones connect to the Internet.
Let us stop here for just a second – and think of the TRILLIONS of dollars created by just that one invention alone.
And Qualcomm has made dozens of contributions to the development of the cell phone over the years. They in fact now nigh singlehandedly have the US leading the way into the Fifth Generation (5G) wireless “Internet of Things” revolution.
Were it not for Qualcomm’s inventions – Apple’s $1,000 iPhone X would be little more than a skinny rotary phone.
So for years and years – through generation after generation of iPhone – Apple has signed all sorts of contracts with Qualcomm. Promising under penalty of law to pay Qualcomm for the use of Qualcomm’s patented ideas.
Except since April of 2017 – Apple hasn’t paid Qualcomm a penny.
Apple still had and has signed contracts with Qualcomm. In which Apple was and is obligated to pay Qualcomm for the use of Qualcomm’s patents. Apple just isn’t paying.
Apple filed lawsuits to get out of the contracts they themselves signed. And bizarrely decided they would stop paying Qualcomm – until the court cases were decided.
Ummm…that’s not how it works. The contracts are valid – unless and until they are invalidated. Which means Apple is on the hook to Qualcomm – unless and until they’re not.
As we know, the US court system is more than a mite backlogged. In no small part because deadbeats like Apple clog them up with all sorts of stupid lawsuits like this.
So we are now into month sixteen of Apple totally screwing Qualcomm.
We are, in fact, two new generations of iPhone into Apple totally screwing Qualcomm.
The Limbaugh-mentioned $1,000 iPhone X – and the simultaneously released iPhone 8 – were made public in September 2017. Five months after Apple stopped paying Qualcomm.
Apple has sold – by now – way over 200 million $1,000-per iPhone Xs. And hasn’t paid Qualcomm for any of them.
Oh – And how much is Apple contractually obligated to pay Qualcomm per $1,000 iPhone X? Less than $20. One Andrew Jackson – and then Apple gets change. Less than an iPhone charger cable. The short one.
Did you get that? The percentage of the retail price of the iPhone Qualcomm is supposed to get – is all of 2%.
And Apple has been screwing Qualcomm out of that infinitesimal percentage – for nearly a year and a half. And counting.
Apple has been screwing the one company that – maybe even more than Apple itself – has made Apple’s $1 trillion success possible.
All of which is something $1 trillion Apple should immediately rectify.
Or have rectified for them.
This first appeared in Red State.