Apple, Qualcomm reach modem licensing deal to end 'no license, no chips' trial

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  • Reply 101 of 127
    kevin keekevin kee Posts: 1,289member
    Despite the resons and agreement, the outcomes for both parties are still positive - at least in the short term. A good tactician knows when to attack, the best one knows when to witthdraw if it benefits more.
  • Reply 102 of 127
    I think regardless of how one feels about either company, and despite the fact that this outcome is by no means a loss for Apple, it would seem that Qualcomm did come out with a greater victory. 
    muthuk_vanalingamchemengin
  • Reply 103 of 127
    kevin keekevin kee Posts: 1,289member
    I think regardless of how one feels about either company, and despite the fact that this outcome is by no means a loss for Apple, it would seem that Qualcomm did come out with a greater victory. 
    It would "appear" so, yes, so far. But knowing Apple, they don't do 'loss'. I am going to conjecture here, but I am pretty sure there is something we don't know yet.
    edited April 2019
  • Reply 104 of 127
    chaickachaicka Posts: 257member
    $13 for IP licensing per iOS device is nonsense. Imagine if each iOS device contains 1000 IPs, and each IP demands $1, how much would each iOS device has to be priced to paying consumers?

    I bet Qualcomm realised by now how ridiculous their demand has been and the few recent outcomes proven their stand will unlikely hold out without them bleeding (from all the regulatory fines, loss of sales, etc) more than what they may recover (from IP licensing), hence likelihood reduced or changed their terms of IP licensing to be a fix rate rather than a percent of end-product selling price. That is fundamentally what Apple has been driving at. How can a same chip cost $13 for one vendor (eg iPhone X, Xs, Xs Max or Samsung high-end Android phones) yet cost $3 for another vendor (eg cheap Android phones) due to huge difference in end-product selling price.
    edited April 2019
  • Reply 105 of 127
    kevin kee said:
    I think regardless of how one feels about either company, and despite the fact that this outcome is by no means a loss for Apple, it would seem that Qualcomm did come out with a greater victory. 
    It would "appear" so, yes, so far. But knowing Apple, they don't do 'loss'. I am going to conjecture here, but I am pretty sure there is something we don't know yet.
    I agree. Apple needs 5G, but cannot/will not use Huawei, so called a temporary truce since Qualcomm is pretty much the only option. 

    But Apple is taking the long view: a couple of years of dependence on Apple for 5G sales, and the buyer will end up with the upper hand. To quote The Godfather, “keep your friends close, but your enemies closer”!
  • Reply 106 of 127
    carnegiecarnegie Posts: 1,075member
    I think regardless of how one feels about either company, and despite the fact that this outcome is by no means a loss for Apple, it would seem that Qualcomm did come out with a greater victory. 
    I don't think there should be much doubt that getting a deal done represents more of a win for Qualcomm than it does for Apple. (Though it's a win for both.) Qualcomm was the one that (more) needed a deal done. It was harmed more by the ongoing dispute and faced more downside risk from adverse court decisions. The market's reaction speaks for itself. Qualcomm stock was up immediately and dramatically on the news that an agreement had been reached, and without the market knowing what the terms of the agreement were. The market saw the lack of a deal as a problem for Qualcomm to a much greater degree than it saw the lack of a deal as a problem for Apple. Apple stock barely reacted to the news.

    But that being the case - i.e., it being the case that Qualcomm had more to gain from getting a deal done - is quite different from the terms agreed to being more favorable for Qualcomm. We'd actually expect an inverse correlation. The party which needed the deal done more, and which benefits more from there being a deal, is the party more likely to have agreed to less favorable terms. There's a reason why Qualcomm had previously tried to make it seem like a deal might be close to getting done, whereas Apple suggested that wasn't the case. Qualcomm wanted the market to think a deal was likely or close; Apple didn't need the market to think that. It was Qualcomm, not Apple, that repeatedly pointed to the ongoing dispute with Apple to help explain poor results. Even accounting for the large one time items which caused much of Qualcomm's poor earnings numbers over the last 2 years, those numbers pointed to meaningful effects from the loss of Apple's business.

    So there's two different considerations:

    (1) Who benefits most from an agreement being reached, without regard to the terms of the agreement? The answer to that is Qualcomm. Assuming a deal eventually got done, the answer was always going to be Qualcomm (or very likely to be Qualcomm).

    (2) To whom are the terms of the agreement more favorable? That's a bit more difficult consideration, particularly since we don't know what those terms are. The answer also depends on what we're comparing those terms to. To what would have, in effect, resulted from litigation that dragged on for years? Or, to what the situation was before this dispute began - or, rather, before it went public? The former is really difficult to answer because we don't know what would have resulted from more rounds of litigation. But, when it comes to the latter, I think it's safe to say that the terms of the deal favor Apple as compared to what the situation was before this dispute began. We, of course, don't know that for certain. But based on everything that's happened - e.g., all the ground that Qualcomm has already lost in litigation (and through regulatory actions) and the relative business harms which the parties have thus far suffered - it's the reasonable conclusion. So much of how things worked before isn't going to be the case going forward. How much better for Apple (and worse for Qualcomm) is the situation now? That we'll have to wait to find out, assuming we at some point get reliable information about the terms of the agreement.


    GG1
  • Reply 107 of 127
    k2kwk2kw Posts: 2,074member
    Qualcomm Blinked...
    Apple pays Qualcomm.    It’s simple Apple realized they can’t  afford a mess up with the modem in the phone like how they still don’t have a good keyboard in the MBP.
    nubuschemengin
  • Reply 108 of 127
    k2kwk2kw Posts: 2,074member
    gatorguy said:
    That certainly came as a surprise to a number of us. Despite denials it seems there may have negotiations going on behind the scenes for some time at least. Not likely the terms of the agreement were hammered out over a few days. 
    It’s simple.   Cook lied about the negotiations.
    chemengin
  • Reply 109 of 127
    kevin keekevin kee Posts: 1,289member
    Agree, especially because Apple has several options including proceeding with the court while Qualcomms has been seriously weakened by multiple cases (not with Apple). Yet, Apple choose to settle. If there are no benefits for them 'somewhat', I don't know what else.
  • Reply 110 of 127
    k2kwk2kw Posts: 2,074member
    flydog said:
    Qualcomm Blinked...
    In case you missed it, Qualcomm received cash, a six-year license agreement, and if that wasn't enough its market cap increased by about $17 billion after the settlement.

    More like Qualcomm won the powerball 100 times over. 




    Yep it’s obvious Cook didn’t want to take the stand.

    Apple surrenderred to QC like Lee to Grant.

    Apple realized that Intel’s modems wouldn’t cut it and it would take Apple years to develop their own.   Ultimately it’s future Apple customers who win because they don’t get stuck with Intel’s second rate modems.   I’m looking forward to the XIS in 2020.
    muthuk_vanalingamchemengin
  • Reply 111 of 127
    k2kwk2kw Posts: 2,074member
    chaicka said:
    $13 for IP licensing per iOS device is nonsense. Imagine if each iOS device contains 1000 IPs, and each IP demands $1, how much would each iOS device has to be priced to paying consumers?

    I bet Qualcomm realised by now how ridiculous their demand has been and the few recent outcomes proven their stand will unlikely hold out without them bleeding (from all the regulatory fines, loss of sales, etc) more than what they may recover (from IP licensing), hence likelihood reduced or changed their terms of IP licensing to be a fix rate rather than a percent of end-product selling price. That is fundamentally what Apple has been driving at. How can a same chip cost $13 for one vendor (eg iPhone X, Xs, Xs Max or Samsung high-end Android phones) yet cost $3 for another vendor (eg cheap Android phones) due to huge difference in end-product selling price.
    The same way Apple takes a percentage cut of the App Store.
  • Reply 112 of 127
    Bobbybina1Bobbybina1 Posts: 3unconfirmed, member
    Apple buys time to produce its own tech. It has bought 6-8 years with this deal. Just enough time to create the next generation chip beyond 5G itself.
    anantksundaram
  • Reply 113 of 127
    sflocalsflocal Posts: 6,088member
    If People truly think that this was a victory for Qualcomm, then I have a bridge to sell them.

    This is short term for Apple.  Within six years, Apple will have its own modem then QC will be right back in the cesspool it was in.  Let the clock start counting down.

    I won’t be putting money down on QC for the long term.
    hammeroftruthmacplusplusGG1
  • Reply 114 of 127
    asdasd said:
    sacto joe said:
    The truth very well could be they both blinked. 

    Apple, who right now is fighting negative press that people are tired of the new iPhone and see no need to upgrade and will still hold on to their older devices. They aren’t, but the adoption of new iPhones is slower than it has been in the past. For some people, they are holding out to see what replaces the XS line. To them, the XR is not the new phone they want. They want the XS, but at a XR price. 

    Apple is also concerned that the reports of a lack of a 5G roadmap will push potential upgrades away from them, so a deal to them was the lesser of 2 evils. Better to deal with the devil you know vis-à-vis Samsung. They know how to do it. 

    There are other news reports that Samsung is fairing better with the Galaxy S10 line, although I doubt it. There are many ads where carriers are giving away s10s when you buy one. That can’t be a good sign. Samsung is putting on a brave face, but they know they are in the same boat trying to sell a $1k phone.  It’s going to get worse when their folding phone ships this month. 

    For Qualcomm the risk was much higher. If this trial was to go forward, all of their strongarm tactics will be unveiled. Apple was lining up all of its upper management to show just how long and far Qualcomm has gone to intimidate Apple and other manufacturers into using their chips. Internal documents could have been unsealed and the rest of the world could see just how underhanded Qualcomm operates. This is why Samsung and others did side with Apple against Qualcomm in other cases. 

    So rather than taking a huge gamble in proceeding with this suit, Qualcomm has agreed to take less money, provide Apple chips it needs, keep it’s confidential agreements safe, and live to fight another day. 

    Apple won’t have to pay the ransom Qualcomm says it’s owed since they did lose that case. I’m sure the agreement covers letting that go or accepting a smaller amount in order to settle this case. 

    So now, Apple has a 5G plan if it decides to use Qualcomm chips and the tech media can now stop creating fud about Apple’s 5G future. 
    Conjecture piled on conjecture. If you really knew what Apple was concerned with, you'd be working for them, and you wouldn't be posting here.
    It was an interesting post nevertheless, unlike the inane bleating of conjecture when someone doesn’t like a post. This is a discussion forum where people will obviously engage in speculation. 
    Thank you. 
  • Reply 115 of 127
    sflocal said:
    If People truly think that this was a victory for Qualcomm, then I have a bridge to sell them.

    This is short term for Apple.  Within six years, Apple will have its own modem then QC will be right back in the cesspool it was in.  Let the clock start counting down.

    I won’t be putting money down on QC for the long term.
    Especially since they are still under the microscope regarding how they view and use FRAND. 

    Maybe Apple got wind of an approaching investigation by the EU in Qualcomm’s business practices. 

    Plus Apple doesn’t say whether they are going to pay Qualcomm the 7 billion dollar ransom it says Apple owes it. They did lose that battle earlier this year in court. 

    Plus, Qualcomm doesn’t like to point out that in  2011 it gave Apple 1 billion to shackle them together for 5 years. 

    It was a win-win for both sides. Qualcomm gets to keep screwing everybody else and has a “We won’t screw you” agreement with Apple. 
    Apple doesn’t have to spend a lot of time and money to prove what we already know; Qualcomm is scummy and wants a lot of money for parents that should have a lower price to license under FRAND. Plus they get the chips they need at a better price than a week ago. 

    Sounds like Steve’s Apple. It was never about Apple getting the cash out of Qualcomm, it was getting a better deal for the chips and possibly making one of the fastest 5G devices once there is a nationwide network to use it on. 
    edited April 2019
  • Reply 116 of 127
    nubusnubus Posts: 303member
    k2kw said:
    Yep it’s obvious Cook didn’t want to take the stand.

    Apple surrenderred to QC like Lee to Grant.
    Cook took a stand, and he certainly has improved his warfare skills. Just remember when Cook kept the iBook price-fixing scandal in courts for years. It ended with a complete loss for Apple - not the least in public image. Jobs proved in 1997 how to do it with the Microsoft deal.

    QC placing a tax on Apple never looked good. But it would have taken 5 years. And at what cost in terms of time-to-market for iPhone G5? This deal might even open the door to QC and Apple working closer together due to "the special nature of iOS". Samsung and Huawei lost this one.

    I wonder if this is a new Tim Cook. In that case he will pay the taxes to EU. There is no way for Apple to win. In these times of Apple being responsible, green, and even the stores being "community hubs"... then not contributing to community just doesn't work in Europe. At least not with the market segment buying iPhones. Several other companies have already paid. With EU elections happening soon he might want to postpone this to August - but that really would be for him to make things personal.
  • Reply 117 of 127
    mattinozmattinoz Posts: 2,271member
    k2kw said:
    Qualcomm Blinked...
    Apple pays Qualcomm.    It’s simple Apple realized they can’t  afford a mess up with the modem in the phone like how they still don’t have a good keyboard in the MBP.
    Apple were always going to pay Qualcomm. The question was how much, what for and how many times for the same thing. Not sure there really can say which sides won and which side lost. Both side might have won , or thought they did, for all we know
  • Reply 118 of 127
    avon b7avon b7 Posts: 7,499member
    I definitely think this was another 'yikes' moment for Apple and, given Intel's announcement, that 5G was definitely a major element in the decision making process. I would be very surprised if the X55 didn't make it into the 2019 refresh on at least one iPhone (if it doesn't get onto the SoC). If the X55 doesn't make into this year's iPhone, it will be a major miss for its peak quarter. Something I imagine they are working flat out to avoid.

    I'd say the odds of Apple trying to buy Qualcomm are higher now. Swimming in the CE/services space isn't enough. Moving forward, I think they understand that they need a presence upstream in the patent pool of essential communications patents to better prevent this kind of situation happening again.

    That said, I think the chances of a takeover getting regulatory approval are not very high so they might have to elbow in on the next generation (G6) to get a foothold in that space.
  • Reply 119 of 127
    wizard69wizard69 Posts: 13,377member
    avon b7 said:
    No doubt those who spouted so much vitriol against Qualcomm have mixed feelings now. QC was evil but now a different viewpoint will probably unfold.

    If the X55 ends up in the 2019 refresh, no doubt all the talk about 5G being unnecessary on the iPhone this year will be forgotten.

    I wonder how much of a factor the 5G modem really was in ending this issue (and how much Apple paid in the end).


    At this point 5G is more marketing than anything’s my else.   My iPhone is very fast to download most of the time, when it isn’t it is likely could negation on the network.  5G will not fix the congestion problem on its own.  Eventually the problem with cell node congestive will be solved but that is likeky to trail 5G by a few years. 
    hammeroftruth
  • Reply 120 of 127
    wizard69wizard69 Posts: 13,377member
    Interesting developments but what I find sad is that apparently $13 out of every cell phone Apple sells goes to Qualcomm for licensing. At least that is the way I read this article.  
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