Apple exec admits Qualcomm was the only option for 4G in the iPhone for years

Posted:
in iPhone
Potentially aiding Qualcomm's trial defense against the U.S. Federal Trade Commission, Apple has admitted that for years, there was no other realistic option but Qualcomm when it wanted 4G modems for iPhones.

Apple iPhone 7 Plus


While the company considered alternatives like Broadcom, Ericsson, and Intel as far back as 2012, none of them could meet specifications, Apple's director of cellular systems architecture Matthias Sauer said in testimony on Jan. 18, as reported by Bloomberg. The company relied on Qualcomm 4G modems until 2016's iPhone 7.

Apple did consider using Intel for a 2014 iPad, Sauer added, but skipped the idea out of business reasons and a decision that it didn't need the specifications it had been looking for, such as carrier aggregation.

The FTC's lawsuit accuses Qualcomm of antitrust violations by forcing chip buyers to sign patent licenses at inflated rates. The Commission rested its case last week.

Qualcomm has defended its practices by a number of means, for example pointing to the high cost of innovation. Apple though has called the chipmaker's demands "onerous," at one point asking Apple to cross-license all its intellectual property to get a direct license for standards-essential patents, something Apple decided to skip.

COO Jeff Williams recently revealed that Apple wanted to return to a mix of Intel and Qualcomm modems for 2018 iPhones, but was shot down by Qualcomm CEO Steve Mollenkopf. The two companies have been engaged in a global legal war since 2017, instigated by Apple, which sued over nearly $1 billion in rebates allegedly withheld as retaliation for cooperation with antitrust investigators.

Comments

  • Reply 1 of 16
    cornchipcornchip Posts: 1,252member
    Admitted? was it a secret?
    battiato1981anantksundaramwatto_cobra
  • Reply 2 of 16
    cornchip said:
    Admitted? was it a secret?
    Right. Also, I’m not clear on how that bolsters Qualcomm’s case. It seems like they were the only game in town and still decided to abuse that position. 
    cornchipbattiato1981wigbymwhitemac_dogrob53anantksundarammattinozwatto_cobrajony0
  • Reply 3 of 16
    sflocalsflocal Posts: 4,501member
    Admitted what?  The obvious?  I don’t understand what the gaff is, and yes I read the article.
    watto_cobra
  • Reply 4 of 16
    AppleExposedAppleExposed Posts: 633unconfirmed, member
    Maybe implying that it may no longer be the case with future 5G tech. Meaning MAYBE Apple is building their own modems.
    watto_cobra
  • Reply 5 of 16
    wigbywigby Posts: 688member
    cornchip said:
    Admitted? was it a secret?
    Right. Also, I’m not clear on how that bolsters Qualcomm’s case. It seems like they were the only game in town and still decided to abuse that position. 
    And all of the tech blogs have the same shoddy reporting and reader reactions. Not sure if it's symptomatic of Apple tech blogs or just tech bloggers' inability to analyze legal proceedings.
    edited January 22 anantksundaramksecwatto_cobra
  • Reply 6 of 16
    flaneurflaneur Posts: 4,509member
    wigby said:
    cornchip said:
    Admitted? was it a secret?
    Right. Also, I’m not clear on how that bolsters Qualcomm’s case. It seems like they were the only game in town and still decided to abuse that position. 
    And all of the tech blogs have the same shoddy reporting and reader reactions. Not sure if it's symptomatic of Apple tech blogs or just tech bloggers' inability to analyze legal proceedings.
    Or just think and write clearly in general.
    watto_cobra
  • Reply 7 of 16
    avon b7avon b7 Posts: 3,488member
    'Admit' is fine in this piece. Just read it in the context of 'acknowledge' as it carries that meaning too.
  • Reply 8 of 16
    This just in: Netscape director admits that Microsoft had a monopoly in operating systems.
    anantksundarambattiato1981watto_cobra
  • Reply 9 of 16
    tbornottbornot Posts: 107member
    Netscape was killed when the folks at Java asked them to write a Windows API that ran as fast as the proprietary and non-accessible internal routines that Microsoft used to keep Office out in front.
  • Reply 10 of 16
    LatkoLatko Posts: 305member
    cornchip said:
    Admitted? was it a secret?
    No, but an apparent single point of (dependency) failure that purchasing managers wouldn’t be proud of
    edited January 22 watto_cobra
  • Reply 11 of 16
    MplsPMplsP Posts: 1,219member
    So they essentially had a monopoly. Doesn't that help the prosecution?
    battiato1981watto_cobra
  • Reply 12 of 16
    gatorguygatorguy Posts: 20,293member
    MplsP said:
    So they essentially had a monopoly. Doesn't that help the prosecution?
    Not so much a monopoly as being far better than any of the other companies offering wifi chips. So much so that Apple felt they had no viable option. 
  • Reply 13 of 16
    ksecksec Posts: 1,551member
    wigby said:
    cornchip said:
    Admitted? was it a secret?
    Right. Also, I’m not clear on how that bolsters Qualcomm’s case. It seems like they were the only game in town and still decided to abuse that position. 
    And all of the tech blogs have the same shoddy reporting and reader reactions. Not sure if it's symptomatic of Apple tech blogs or just tech bloggers' inability to analyze legal proceedings.
    And none of the Apple site publish Qualcomm's side of story.  It didn't let the reader to judge, but rather picking out pieces that favours Apple and came out with their own  conclusion. Cnet's Shara Tibken actually done a wonderful job reporting just what they said.
  • Reply 14 of 16
    cornchip said:
    Admitted? was it a secret?
    Right. Also, I’m not clear on how that bolsters Qualcomm’s case. It seems like they were the only game in town and still decided to abuse that position. 
    I don't think it helps Qualcomm much if it helps Qualcomm at all.

    For one thing, part of what the FTC is arguing is that other would-be modem suppliers not being competitive was a result of Qualcomm's anticompetitive conduct. There are reasons why they couldn't yet meet Apple's specs. And even if some of the reasons had nothing to do Qualcomm's (prior or current) conduct, some of them had to do with that conduct. Had Qualcomm not engaged in its allegedly anticompetitive course of conduct, other modem suppliers would have been ready to supply the likes of Apple sooner. 

    MplsP said:
    So they essentially had a monopoly. Doesn't that help the prosecution?
    Yes, but the FTC wouldn't otherwise have any trouble demonstrating that Qualcomm (for some time) had monopoly power.

    There are, simplified a bit, two elements to a Sherman Act §2 violation: (1) monopoly power and (2) anticompetitive conduct. When it comes to the first element, it doesn't really matter why an alleged monopolizer has monopoly power. It matters that they do have monopoly power. So this "admission" supports the conclusion that Qualcomm had monopoly power, but that's something that was already easy for the FTC to demonstrate. The second element is a bit more complicated. But I think the FTC is able to demonstrate that as well, and do so in a number of ways such that some will remain even if others are successfully challenged by Qualcomm.

    At this point, Qualcomm's best defense may effectively be... Yeah, but we don't have the power to do those things anymore. Its best hope may be that Judge Koh concludes that it no longer has the monopoly power, or otherwise the leverage, it would need to successfully engage in the anticompetitive conduct it used to engage in.


    (I only refer to Sherman Act §2 in this context because a violation of Sherman Act §1 doesn't require a demonstration that the accused had monopoly power.)
  • Reply 15 of 16
    sfpropssfprops Posts: 4unconfirmed, member
    TRUE.  That's why FRAND standard patent holders are willing to agree to the terms required of them as the owner of patents that standards are based on.  It assures either IP licensing fees or the purchase of chips. The agreement is that the IP holder does so at reasonable rates.  Qualcomm agreed to FRAND terms, then screwed all of their partners.  Quite evil of them.
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