In February 2017, iMonster Apple (Market Cap: $970 billion) stopped paying Qualcomm for the patented technologies Qualcomm invented – and Apple used in their wireless devices.
Please note: Apple had signed multiple contracts – in which they agreed to pay Qualcomm for permission to use the patented technologies Qualcomm invented.
Please also note: Apple continued to subsequently sell millions of wireless devices – for tens of billions of dollars – containing the patented technologies Qualcomm invented. For which Apple had signed multiple contracts – in which they agreed to pay Qualcomm for permission to use the patented technologies Qualcomm invented.
Lawsuits immediately sprung up here in the United States – and all over the world.
Filed by Apple to try to get out of the contracts they themselves signed – in which they agreed to pay Qualcomm for permission to use the patented technologies Qualcomm invented.
And filed by Qualcomm – to get Apple to pay their contractually agreed-to patent leasing payments.
Let us put these patent payments in their proper tech perspective.
Without Qualcomm’s inventions – an iPhone is very little more than a skinny rotary phone.
Qualcomm has been single-handedly delivering the US global leadership in all things wireless for about two decades.
Qualcomm invented the way wireless devices connect to the Internet – and never again looked back.
Qualcomm led US to 3G (Third Generation wireless), then 4G – and now has us on the brink of 5G. And they did it all by their onesies – and did it all before the rest of the entire planet.
Let us put these payments in their proper monetary perspective.
Much like Apple’s going all-in with Communist China – its stealing from Qualcomm was short-term cheap – and long-term stupid.
An Apple iPhone X retails for $1,000. On which Apple was contractually obligated to pay Qualcomm – around $13. Or 1.3%.
In order to save this infinitesimal 1.3% – Apple may very well have destroyed the entire patent royalties process here in the US.
We are in the very early stages of the burgeoning Information Economy. Destroying intellectual property protection – and thus its creation – is even more titanically stupid now than it was before. And it was titanically stupid before. Though Communist China would LOVE it.
Apple then went one step further in its thievery. It reversed engineered Qualcomm’s tech – and illegally taught Intel how to replicate it.
Intel having spent the last two decades proving they couldn’t create it – absolutely not as well or as rapidly as Qualcomm. Which is why Apple has been using Qualcomm’s tech – and not Intel’s.
And now – as Qualcomm delivers us to 5G – Inferior Intel is throwing in the towel on 5G:
“Intel has suddenly announced it’s not even going to try building 5G modems for smartphones.
“Apple had attempted to replace Qualcomm as a supplier for its modem chips with Intel, but reported issues with implementing 5G tech were a reason it’s not expected to appear in an iPhone this year.
“In a statement, Intel said it ‘does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020.’”
5G – is the only wireless game in town for the next several years. And Intel – can’t even get itself into the game.
We all knew Intel was inferior. And by “all” – I absolutely mean Apple.
Apple (Publicly) Said Qualcomm’s Tech Was No Good. But in Private Communications, It Was ‘The Best.’
Which, again, is why Apple was paying Qualcomm to lease it.
Apple – was running a VERY long con:
Apple Hatched Years-Long Plan to Reduce Royalty Payments to Qualcomm, Documents Reveal:
“Apple…was aiming to sue Qualcomm as far back as 2014….
“‘Engineering wise, they (Qualcomm) have been the best,’ said Apple’s senior VP of hardware, Johny Srouji, in a March 2015 email….Another document shown in court, a 2009 internal Apple memo from an accountant, stated that Qualcomm is ‘widely considered the owner of the strongest patent portfolio for essential and relevant patents for wireless standards.’
“Apple decided it wouldn’t sue Qualcomm until after the end of 2016, when Qualcomm would’ve paid out billions of dollars under their exclusive partnership….A third Apple document from June 2016 was labeled ‘Qualcomm Royalty Reduction,’ with one section explicitly stating ‘Goal: Reduce Apple’s net royalty to Qualcomm.’
“The strategy was to ‘hurt Qualcomm financially’ and ‘put Qualcomm’s licensing model at risk,’ the document said. Apple didn’t launch its first lawsuit against Qualcomm until January 2017, at which point it argued that Qualcomm not only owed nearly $1 billion in royalty rebates but maintained abusive practices forcing chip buyers to sign patent license agreements.”
Again: Short-term cheap – long-term STOOPID. If Apple kills Qualcomm – the iPhone goes back to being a skinny rotary phone. How does that help Apple? Or the rest of us?
How does killing the patent license model – help anyone here in the US? Though Communist China would LOVE it.
Apple tried to all sorts of small cons – to help them make the big con:
Court Documents Show Apple Purposefully Bought Pools of Cheap Patents to Help Make Qualcomm’s Royalty Demands Appear Overpriced
These patents were cheap – because the tech wasn’t particularly valuable. I wonder if any were from Intel?
Apple’s court debacle – certainly explains Apple’s very next move:
Apple Paid Up to $6 Billion to Settle with Qualcomm:
“Apple paid a high price to end a bitter legal battle that spanned multiple continents and threatened Apple’s ability to release a 5G iPhone and put pressure on Qualcomm’s licensing business model that contributes over half of the company’s profit.”
All of this Apple-and-US-economy-threatening cataclysmic idiocy.
So that a $970-billion-market-cap company – could try to illegally not pay $13 on a $1,000 phone.
This was SERIOUSLY short-term cheap – and long-term stupid.
This first appeared in Red State.