Qualcomm CEO touts improved relationship with Apple after bitter legal dispute
Qualcomm CEO Steve Mollenkopf in an interview on Thursday said the chipmaker's relationship with Apple has greatly improved since the two companies ended a bitter legal battle over patent licensing and royalties in 2019.
Qualcomm CEO Steve Mollenkopf.
Mollenkopf in an interview with Bloomberg's David Rubenstein made the briefest of mentions regarding an easing of tensions between his company and Apple.
Asked whether the two are "good partners" following a worldwide legal scrum, Mollenkopf said, "We are."
"The discussion is really about products and how do we launch products as fast as possible. It's much more natural now," he added.
The two tech firms for two years fought a very public battle over patent licensing tactics, IP royalties, manufacturing and "abusive" business practices. Apple hurled the first stone in 2017, claiming Qualcomm engages in extortion, monopolistic practices, price gouging and so-called "double dipping" on patent royalties from contract manufacturers.
Qualcomm hit back with counterclaims, including allegations that the iPhone maker stole trade secrets, to spark a litany of back-and-forth complaints lodged in courts and government regulatory agencies around the world.
Apple and Qualcomm ultimately settled out of court in April 2019 on the day an initial patent licensing trial got underway. All cases were dropped as part of the deal, with Apple entering into a six-year licensing agreement and multiyear chipset supply understanding with the chipmaker.
Like Mollenkopf today, Apple CEO Tim Cook struck an upbeat tone when commenting on the arrangement last year.
"We're glad to put the litigation behind us, and all the litigation around the world has been dismissed and it's settled," Cook said at the time. "We're very happy to have a multi-year supply agreement, and we're happy that we have a direct-license arrangement with Qualcomm which I know was important for both companies and so we feel good about the resolution."
For its part, Qualcomm maintained Apple's lawsuit was, at its core, about scoring a better licensing deal for modems and modem parts. Those assertions were partially borne out in court when documents revealed Apple was exploring ways to "hurt Qualcomm financially" since at least 2014 in a bid to reduce royalty payments.
Qualcomm CEO Steve Mollenkopf.
Mollenkopf in an interview with Bloomberg's David Rubenstein made the briefest of mentions regarding an easing of tensions between his company and Apple.
Asked whether the two are "good partners" following a worldwide legal scrum, Mollenkopf said, "We are."
"The discussion is really about products and how do we launch products as fast as possible. It's much more natural now," he added.
The two tech firms for two years fought a very public battle over patent licensing tactics, IP royalties, manufacturing and "abusive" business practices. Apple hurled the first stone in 2017, claiming Qualcomm engages in extortion, monopolistic practices, price gouging and so-called "double dipping" on patent royalties from contract manufacturers.
Qualcomm hit back with counterclaims, including allegations that the iPhone maker stole trade secrets, to spark a litany of back-and-forth complaints lodged in courts and government regulatory agencies around the world.
Apple and Qualcomm ultimately settled out of court in April 2019 on the day an initial patent licensing trial got underway. All cases were dropped as part of the deal, with Apple entering into a six-year licensing agreement and multiyear chipset supply understanding with the chipmaker.
Like Mollenkopf today, Apple CEO Tim Cook struck an upbeat tone when commenting on the arrangement last year.
"We're glad to put the litigation behind us, and all the litigation around the world has been dismissed and it's settled," Cook said at the time. "We're very happy to have a multi-year supply agreement, and we're happy that we have a direct-license arrangement with Qualcomm which I know was important for both companies and so we feel good about the resolution."
For its part, Qualcomm maintained Apple's lawsuit was, at its core, about scoring a better licensing deal for modems and modem parts. Those assertions were partially borne out in court when documents revealed Apple was exploring ways to "hurt Qualcomm financially" since at least 2014 in a bid to reduce royalty payments.
Comments
The dude is happy because they now have a direct license with Apple. There is no longer a middle man. Their past agreement was structured through Apple's contractors. Seriously, both companies have come to an agreement and neither is wasting money on litigation. Why wouldn't he be happy about their improved relationship?
These are bitter rivals forced to work together.
In the meantime Apple is scrambling to get its own modem off the ground in a market with intense competition and competitors who are far more likely to have an edge over Apple.
Designing their own modem isn't a bad decision but IMO the whole QC spat was a strategic error.
You never fail to editorialize about Apple's failings, but "scrambling" isn't what Apple is doing, and "intense" competition doesn't seem to have affected Apple in the marketplace. Of course, you fail to note that you are only ever talking of Apple's iPhone products, never their entire product line nor their ecosystem.
I imagine the Huawei is "scrambling" to replace Google Android OS, and I'm sure you will tell us what a wonderful competitor it will be, sometime in the future.
Apple won't be impacted by those so called competitors for the simple reason that most Apple iPhone users won't be switching, and will wait until what will be fully functional, second generation 5G arrives in the iPhone this fall.
In the meantime, Apple keeps expanding its SOC efforts, outdistancing its rivals, and at the same time, continues to add more specialized components to its product line, such as the U1.
The difference between the two is that strategically Huawei was better prepared and its task was monumentally more difficult than Apple's. In fact, there is no real comparison here.
Apple took things to the wire and its backup didn't pull through.
It found itself in that situation - precisely through intense competition - and yes, its iPhone business has been impacted. Did you not see them release the SE a couple of weeks ago? You know, that low cost entry that not long ago many here were saying would represent a 'race to the bottom' at such a price point.
And what if Apple hadn't kissed and made up with QC. Shudder the thought, right?
Let's not paint a false picture here. Apple was between a rock and a hard place.
Customers waiting? Yes, there have been too many years of that (another reason for the SE). A good move but reactionary all the same.
As it is, Apple will have a 5G modem and yes, and could be a second gen modem (announced last year).
That scenario would see it including the QC modem right around the time QC announces its third gen modem and, in all liklihood, Huawei of course will have a new modem by then too. And probably Samsung and MediaTek.
Personally I think there might be a case for Apple getting first dibs on that modem because QC has lost a ton of business from Huawei and Huawei is taking sales away from other phone vendors that purchase components from QC.
Competition, you said? Yep. Just as well.
Apple was at that wire a little over a year ago, so what happens now is completely predicable; Apple will have second generation 5G modems, with all of the frequency bands, in iPhones this fall.
Maybe you meant to say that Apple scrambled, which is past tense, and I would agree with that, but that isn't the case today.
Huawei is killing off lots of its weaker competition in China, but isn't yet competitive with Samsung or Apple in the rest of the world, no matter how many cheap smartphones that they sell. Losing Google Android and Google services isn't going to help Huawei.
Meanwhile, China diplomatic offensive is starting to face backlash, and that will have an impact on Chinese businesses in the West.
https://www.nytimes.com/2020/05/03/world/europe/backlash-china-coronavirus.html
https://www.forbes.com/sites/zakdoffman/2020/04/18/huawei-hit-by-china-backlash-2020-just-got-much-worse-heres-why/#2066a6535dcb
I'll post this from the above link here instead of the other thread that I responded to you in.
"We saw this last year with Xinjiang. Huawei has always maintained that sales of its technology into the surveillance state targeting China’s Uighur Muslim minority were through third-parties—it had no direct engagement. This was refuted by a new report that claimed Huawei was much more closely and directly involved.
As I’ve said before, my expectation is that Huawei would like nothing more than to exit Xinjiang and avoid any reputational risk overseas. This is a political trap for the company, recognizing how contentious this is as an issue, but with its increasing reliance on Beijing’s support to survive U.S. sanctions, being unable to risk contradicting the government’s public stance on Xinjiang."
Maybe you should be more concerned about the vise that Huawei finds itself in rather than Apple's "scrambling".
I will restate how potentially dramatic this was on a strategic level.
If Apple hadn't reached an agreement with QC, where would Apple be on 5G terms?
It would have been there for the picking. Samsung would have driven a very hard bargain. Mediatek deals in slightly lower end chipsets. Not a good fit for Apple.
That would leave Balong5000 and good terms from Huawei but Trump wouldn't like that would he?
It was QC or bust.
Apple hasn't had an issue with a 5G modem since last spring, and that gave them 18 months to deliver, yet here you are, going what if.
Maybe you should spend more time worrying about Huawei's replacement for Google Android.
As for Huawei, it is Google that is worrying, not Huawei.
Huawei has no option but to follow the only route it has, all for its own gain.
Google and U.S technology are the real losers here and in massive terms.
HiSilicon just displaced QC in China. It has switched some TSMC orders to foundries on the mainland and is pumping money and knowhow into them. Well done Trump! He has accelerated China's moves into improving its chip foundries.
Huawei has inked deals with EU chip powerhouses. Imagine at whose loss?
Trump is even scrambling too to try and undo part of the damage to U.S interests in core technology standards worldwide as his actions have left the U.S without a voice in those standards bodies where Huawei is present.
HarmonyOS debuted on TVs last year . Its kernel on watches. HarmonyOS 2.0 is now here and now we are seeing rumours of it running on PCs running KunPeng chips very soon. IoT goes without saying.
Google requested/begged for a licence to do business with Huawei. As have hundreds other U.S companies.
The problem is that the damage is done and things have backfired horribly for Trump with his actions.
He and Pompeo & Co have burned what little international credibility they had (along with many bridges) and permanently damaged U.S interests everywhere but especially in technology and specifically in the 5G revolution.
https://www.apple.com/newsroom/2019/04/qualcomm-and-apple-agree-to-drop-all-litigation/
April 16, 2019
Settled over a year ago, but thanks for playing.
The strategic problem was heightened the timing. Right on the cusp of the 5G roll out. That simply made things more urgent.
I think it will take a few years for the details to seep out but they will be juicy when they do.
As is often the case, once agreement is reached everyone involved says all sides win but my hunch is one won more than the other in this case.
Huawei had over 130 companies cut out of its supply chain, had to develop an entirely new platform and populate it with the necessary hooks and services. It had to find component alternatives, develop, test and put them into mass production, all the while with the entire U.S government trying to blow it out of existence. It took a 10 billion dollar financial hit and and needed to invest billions more to be in the position it is today. It also had to deal with COVID-19 and keep critical infrastructure up around the world AND work out how to increase the capacities of carriers who were servicing people with massive spikes in their Internet usage both in the private and business realms. It brought a completely new OS to market with a raft of new consumer and business hardware - in less than 12 months. It has opened lines into new business and accelerated its plans.
Oh, and in spite of everything, it shipped 240 million phones in 2019.
If you think the two situations are even remotely comparable then it is you who has the problem.
How did they pull it off? Stategic planning.
You are the Typhoid Mary of misinformation, and you are just a propagandist.
Huawei had almost no problem ever finding components for its phones, it was its telecom and surveillance businesses that were effected, so stating shipments of phones has nothing to do with the supply chain for telecom. That said, Huawei will definitely not sell 240 million low ASP, low margin phones this year due to demand destruction. The only comparable issue with the phones is that the U.S. restricted Electronic Design Software which is necessary for the design of the latest SOC's, and that might be the reason that Huawei isn't tasking TMSC 5nm while Apple gets all of the first production.
The only thing that Huawei had to worry about wrt to phones is the Google Android OS, and its delusion to think that its new phone OS is comparable to Google Android, or iOS.