Why so many people think that building a LTE chip would involve stealing IP I don't get. Most of the patents are available for anyone in the consortium to use and pay a flat fee. Apple will pay that fee. Many Qualcom patents are available that way.
Flat fee? Which consortium? Ericsson wants a very high flat fee for their FRAND patents and what makes you believe Qualcomm wouldn't demand just as much?
The interesting question is whether the Ericsson patents are standards-essential, or not.
If they are then FRAND terms will apply. And the Court will look at similar licensing deals in order to decide on an appropriate rate. The same consideration would apply to Qualcomm. They could try for a high rate but there's no certainty that they'd get it.
Why so many people think that building a LTE chip would involve stealing IP I don't get. Most of the patents are available for anyone in the consortium to use and pay a flat fee. Apple will pay that fee. Many Qualcom patents are available that way.
The interesting question is whether the Ericsson patents are standards-essential, or not.
If they are then FRAND terms will apply. And the Court will look at similar licensing deals in order to decide on an appropriate rate. The same consideration would apply to Qualcomm. They could try for a high rate but there's no certainty that they'd get it.
I'll repost this, something I wrote a few days ago for those that missed it:
"According to various documents Ericssons' royalty is tied to the wholesale price of the handset, i.e. the price paid by carriers/resellers, rather than the retail/consumer price. That effective rate is 1.5%, or about $6 on a $400 (wholesale) device. For comparison purposes Qualcomm's standard rate is 3.25% of the device cost, or about $13 on that same handset.
By my calculations when all LTE SEP contributors are included it looks like as much as 16% or more, or around $55 of the handset cost could be going out in SEP royalties on that $400 handset."
Overall, this isn't a very controversial article from DED, and it's something a lot of people have speculated about.
1. Qualcomm Snapdragon killed TI OMAP. It's weird how DED keeps on writing about how Apple's custom, in-house, not-for-sale chips competes with SoC vendor chips. So, yeah, Apple doesn't really compete in the market for SoCs, and can't kill "competitors". Snapdragon essentially came in and swept the field: TI pulled out, Nvidia neutered, Samsung needs to use Snapdragons in the USA for who knows what reason. Ankle biters will be coming for Qualcomm now though.
2. I don't think there is anything stopping Apple from designing their own wireless modems, be it integrated into a SoC or a discrete set of chips. It's weird to see the skepticism here. Engineering-wise, there's no doubt that they can do it, right? Then, patent-wise, I think that situation is peanuts. If Samsung or Intel/Infineon or whoever can build a wireless modem for $30 per chip, Apple will be able to do it for $30. If the patents holders are going to overcharge Apple, the court case will be entertaining as has been said before, companies make these wireless chips for $20 to $30. Apple will get those "fair-market" rates.
3. Asking whether it is economically worthwhile over just buying Qualcomm modems is asking the wrong question. If Apple does it, how would it improve their products? For iPhones, the wireless modem takes a significant chunk of PCB space, the equivalent of what the NAND or SoC takes. Integrating it into a future SoC (which likely can have 3b to 4b transistors!) means that can add another NAND package to double storage, add a different chip to do some other functionality, or they can reduce the size of the PCB and use it for say another speaker or more battery and maintain thinness or footprint. For the Watch, it's self explanatory why going custom and integrated would be influential. The future is supposedly a world rife with everything having a radio, so, having a custom solution designed specifically for their product would give them a leg up.
Not all of the patents that Apple needs are licensed under FRAND. The GSM-A standards (GSM, UMTS, HSPA, LTE) are available under FRAND. The 2G and 3G technologies used by Verizon are wholly owned by Qualcomm. Qualcomm can and does charge as much as it likes for these patents.
Then, patent-wise, I think that situation is peanuts. If Samsung or Intel/Infineon or whoever can build a wireless modem for $30 per chip, Apple will be able to do it for $30. If the patents holders are going to overcharge Apple, the court case will be entertaining as has been said before, companies make these wireless chips for $20 to $30. Apple will get those "fair-market" rates.
FRAND doesn't means that everyone pays the same, the net amount depends on a lot of things.
The article is interesting, but I freely admit it is a little over my head. But as has already been commented, I suspect AAPL is looking at communications technology for the Apple Watch or other wearables.
FRAND doesn't means that everyone pays the same, the net amount depends on a lot of things.
True, but the words in the acronym mean something. Apple will have the court depose makers of wireless modem chips and ask them how much they are paying Qualcomm or whoever owns the patent for the FRAND patent. What Apple will pay won't be far from that. It also quite doubtful that Apple doesn't have a very good idea what the rates as well.
How many times is AI going to post the same article in a one-week span and for that matter how many times can DED repackage the same article? He seems to have taken redundancy to a whole new level.
I read yesterday that Google is working with SpaceX to launch thousands of little Internet satellites in to orbit. How much more attractive would Android products be if they came with free connectivity? This is the sort of thing where you want innovation on the radio/networking side, not trying to make your own baseband chip.
How many times is AI going to post the same article in a one-week span and for that matter how many times can DED repackage the same article? He seems to have taken redundancy to a whole new level.
Believe it or not, two articles can have the word "Intel" in them without being the same article.
Apple is going to have to do their own baseband chips purely for power consumption reasons. But the iPhone isn't the intended target, it's for Watch.
Bingo
Maybe longterm ... but, for the next 5 years or so, I don't see people wearing an Apple Watch instead of carrying an iPhone -- rather, wearing an Apple Watch in addition to carrying an iPhone.
There are just so many things an iPhone should be able to better than a watch -- even if it is less convenient ...
Taking pictures, entering text, panning zooming maps, web pages ...
I read yesterday that Google is working with SpaceX to launch thousands of little Internet satellites in to orbit. How much more attractive would Android products be if they came with free connectivity? This is the sort of thing where you want innovation on the radio/networking side, not trying to make your own baseband chip.
After eating intel mobile for lunch? C'mon get real, since has intel been a threat to anyone in the mobile industry, they have been trying to get in the market for ageswith very little success.
In the case of baseband, you've made your own argument that actually supports Apple bringing that tech in house. In a word, INNOVATION! Controlling the baseband radios allows Apple to not only save money in the Billions, but also the fact that Apple's strategy has always been to bring unique and innovative solutions to consumers within vertical integration. Period. What would drive this effort is the fact that even more of our life activities are going to become wireless - from cooking, to lighting, to heating, to cooling, to driving, to health and fitness, to sleep, to security, etc. etc. all through our mobile devices.
Interesting point. If it's more about Apple acquiring and nurturing their domain expertise and wireless competency for IoT purposes rather than simply cutting out an expensive supplier then there may be a second order benefit for Apple that far exceeds their supplier cost challenge. It would be interesting to see whether Apple as a baseband radio designer would come up with their own IoT protocol or converge on one of the current contenders like 6LoWPAN.
Apple didn't beat Intel in the mobile chip battle. Intel shot themselves in the foot. No one is buying Intel processors and putting them into smartphones.
Similarly, if Apple moves to their own baseband processor, the loser is Qualcomm, but only in terms of losing unit shipments to Apple. They still have all the other smartphone/tablet manufacturers as potential customers. Apple accounts for approximately 16.5% of worldwide smartphone unit sales, even if they're hogging up nearly all of the profit.
The article title is sheer click-bait and not accurate.
Well... I do have to agree with DED in some aspect. The history, which I repeat in forums every so often, if the context is there, shows that Apple was responsible for sidelining Intel, though Intel did make a big mistake of their own.
The facts are that Apple was looking for a mobile processor for the Newton which they were designing, and didn't find anything that would work. They looked at many designs, and decided that the Desktop ARM chip Acorn was using for their computers being used in GB's schools would be a good chip to base a mobile chip on. They went to Acorn, who agreed, they then got VSLI to join the effort. The three formed ARM. They made the first processor for the Newton, and the next two, until Jobs killed it.
Intel was making ARM processors for several years, but decided that the effort wasn't worth it. At the time, it seemed like the right decision for them, and they sold that division to Marvel.
After Apple came up with the iPhone, the ARM designs became the de facto standard for new smartphones, feature phones and later, tablets.
If Apple hadn't worked on the Newton, and hadn't formed ARM, it's very possible that everything would be different. None of the other mobile designs proved out in the long run. Who knows what would have happened otherwise. But, it's very likely that smartphones would be well behind where they are now, and we might still not have a modern tablet.
If so, then the market for mobile chips could still have a number of much smaller manufacturers with incompatable chip IP. Likely TI would still be a major producer. And Intel wouldn't be seeing the major shift in the market.
It's very possible that smartphones would still be mostly in the business and government niches they were in before the iPhone came out. It would also be a much smaller market.
So yes, Apple and their ARM did cause a major problem for Intel. Last year, Intel lost over $4 billion subsidizing their mobile Atom based chips to manufacturers because the price/performance is poor. If they stop the subsidies, no doubt, we will see even less of them in use.
Comments
Why so many people think that building a LTE chip would involve stealing IP I don't get. Most of the patents are available for anyone in the consortium to use and pay a flat fee. Apple will pay that fee. Many Qualcom patents are available that way.
Flat fee? Which consortium? Ericsson wants a very high flat fee for their FRAND patents and what makes you believe Qualcomm wouldn't demand just as much?
The interesting question is whether the Ericsson patents are standards-essential, or not.
If they are then FRAND terms will apply. And the Court will look at similar licensing deals in order to decide on an appropriate rate. The same consideration would apply to Qualcomm. They could try for a high rate but there's no certainty that they'd get it.
Ben Bajarin tweeted something similar. Makes sense.
I'll repost this, something I wrote a few days ago for those that missed it:
"According to various documents Ericssons' royalty is tied to the wholesale price of the handset, i.e. the price paid by carriers/resellers, rather than the retail/consumer price. That effective rate is 1.5%, or about $6 on a $400 (wholesale) device. For comparison purposes Qualcomm's standard rate is 3.25% of the device cost, or about $13 on that same handset.
By my calculations when all LTE SEP contributors are included it looks like as much as 16% or more, or around $55 of the handset cost could be going out in SEP royalties on that $400 handset."
http://forums.appleinsider.com/t/184303/apple-sues-ericsson-to-trim-wireless-patent-royalty-rates#post_2661268
Overall, this isn't a very controversial article from DED, and it's something a lot of people have speculated about.
1. Qualcomm Snapdragon killed TI OMAP. It's weird how DED keeps on writing about how Apple's custom, in-house, not-for-sale chips competes with SoC vendor chips. So, yeah, Apple doesn't really compete in the market for SoCs, and can't kill "competitors". Snapdragon essentially came in and swept the field: TI pulled out, Nvidia neutered, Samsung needs to use Snapdragons in the USA for who knows what reason. Ankle biters will be coming for Qualcomm now though.
2. I don't think there is anything stopping Apple from designing their own wireless modems, be it integrated into a SoC or a discrete set of chips. It's weird to see the skepticism here. Engineering-wise, there's no doubt that they can do it, right? Then, patent-wise, I think that situation is peanuts. If Samsung or Intel/Infineon or whoever can build a wireless modem for $30 per chip, Apple will be able to do it for $30. If the patents holders are going to overcharge Apple, the court case will be entertaining as has been said before, companies make these wireless chips for $20 to $30. Apple will get those "fair-market" rates.
3. Asking whether it is economically worthwhile over just buying Qualcomm modems is asking the wrong question. If Apple does it, how would it improve their products? For iPhones, the wireless modem takes a significant chunk of PCB space, the equivalent of what the NAND or SoC takes. Integrating it into a future SoC (which likely can have 3b to 4b transistors!) means that can add another NAND package to double storage, add a different chip to do some other functionality, or they can reduce the size of the PCB and use it for say another speaker or more battery and maintain thinness or footprint. For the Watch, it's self explanatory why going custom and integrated would be influential. The future is supposedly a world rife with everything having a radio, so, having a custom solution designed specifically for their product would give them a leg up.
Not all of the patents that Apple needs are licensed under FRAND. The GSM-A standards (GSM, UMTS, HSPA, LTE) are available under FRAND. The 2G and 3G technologies used by Verizon are wholly owned by Qualcomm. Qualcomm can and does charge as much as it likes for these patents.
Then, patent-wise, I think that situation is peanuts. If Samsung or Intel/Infineon or whoever can build a wireless modem for $30 per chip, Apple will be able to do it for $30. If the patents holders are going to overcharge Apple, the court case will be entertaining as has been said before, companies make these wireless chips for $20 to $30. Apple will get those "fair-market" rates.
FRAND doesn't means that everyone pays the same, the net amount depends on a lot of things.
The article is interesting, but I freely admit it is a little over my head. But as has already been commented, I suspect AAPL is looking at communications technology for the Apple Watch or other wearables.
FRAND doesn't means that everyone pays the same, the net amount depends on a lot of things.
True, but the words in the acronym mean something. Apple will have the court depose makers of wireless modem chips and ask them how much they are paying Qualcomm or whoever owns the patent for the FRAND patent. What Apple will pay won't be far from that. It also quite doubtful that Apple doesn't have a very good idea what the rates as well.
How many times is AI going to post the same article in a one-week span and for that matter how many times can DED repackage the same article? He seems to have taken redundancy to a whole new level.
I read yesterday that Google is working with SpaceX to launch thousands of little Internet satellites in to orbit. How much more attractive would Android products be if they came with free connectivity? This is the sort of thing where you want innovation on the radio/networking side, not trying to make your own baseband chip.
OK lol, but less confusing than duopsony or oligopsony in that case.
How many times is AI going to post the same article in a one-week span and for that matter how many times can DED repackage the same article? He seems to have taken redundancy to a whole new level.
Believe it or not, two articles can have the word "Intel" in them without being the same article.
It's not the word but the implication that Sony is somehow involved, yet there's nothing about Sony in the article .
^ He gets it. I genuinely don't understand what the "Monop-Sony" comment was supposed to be.
Maybe longterm ... but, for the next 5 years or so, I don't see people wearing an Apple Watch instead of carrying an iPhone -- rather, wearing an Apple Watch in addition to carrying an iPhone.
There are just so many things an iPhone should be able to better than a watch -- even if it is less convenient ...
Taking pictures, entering text, panning zooming maps, web pages ...
http://www.spacex.com/news/2015/01/20/financing-round
It's a done deal.
http://www.spacex.com/news/2015/01/20/financing-round
It's nice to see people thinking big. It's people thinking big that often unseats the biggest companies (ironically).
Interesting point. If it's more about Apple acquiring and nurturing their domain expertise and wireless competency for IoT purposes rather than simply cutting out an expensive supplier then there may be a second order benefit for Apple that far exceeds their supplier cost challenge. It would be interesting to see whether Apple as a baseband radio designer would come up with their own IoT protocol or converge on one of the current contenders like 6LoWPAN.
Well... I do have to agree with DED in some aspect. The history, which I repeat in forums every so often, if the context is there, shows that Apple was responsible for sidelining Intel, though Intel did make a big mistake of their own.
The facts are that Apple was looking for a mobile processor for the Newton which they were designing, and didn't find anything that would work. They looked at many designs, and decided that the Desktop ARM chip Acorn was using for their computers being used in GB's schools would be a good chip to base a mobile chip on. They went to Acorn, who agreed, they then got VSLI to join the effort. The three formed ARM. They made the first processor for the Newton, and the next two, until Jobs killed it.
Intel was making ARM processors for several years, but decided that the effort wasn't worth it. At the time, it seemed like the right decision for them, and they sold that division to Marvel.
After Apple came up with the iPhone, the ARM designs became the de facto standard for new smartphones, feature phones and later, tablets.
If Apple hadn't worked on the Newton, and hadn't formed ARM, it's very possible that everything would be different. None of the other mobile designs proved out in the long run. Who knows what would have happened otherwise. But, it's very likely that smartphones would be well behind where they are now, and we might still not have a modern tablet.
If so, then the market for mobile chips could still have a number of much smaller manufacturers with incompatable chip IP. Likely TI would still be a major producer. And Intel wouldn't be seeing the major shift in the market.
It's very possible that smartphones would still be mostly in the business and government niches they were in before the iPhone came out. It would also be a much smaller market.
So yes, Apple and their ARM did cause a major problem for Intel. Last year, Intel lost over $4 billion subsidizing their mobile Atom based chips to manufacturers because the price/performance is poor. If they stop the subsidies, no doubt, we will see even less of them in use.