iPhone may become king in cellphone chip ban
The US International Trade Commission has issued a ruling against Qualcomm late this week that would bar many of its 3G cellular network chipsets from export to the US, potentially creating a ripple effect in the cellphone business that may help the iPhone as much as it hurts rivals.
In its ruling, the ITC determined that Qualcomm had infringed on a single patent held by one of its chief opponents in the communications business, Broadcom. The patent, which addresses a power-saving process that kicks in when cellular coverage runs dry, was deemed important enough by the trade bureau that a ban will be imposed in 60 days on any future device found to contain an infringing chip -- including many cellphones from the world's largest electronics firms.
Kyocera, LG, Motorola, and Samsung have already protested the ruling, pointing to the dead end it would create for the companies' US release schedules. LG in particular would suffer the greatest immediate blow from its heavy dependence on 3G chipsets for current and future American phones and has joined Qualcomm in formally protesting the decision.
But regardless of the number of phones affected by the ban, the impact may be especially hard for cellphone creators whose new phones will launch at or shortly after the deadline. Motorola's heavily promoted RAZR2 phone has so far been set to arrive in the US during the summer but would be forbidden under the new import rule, potentially sabotaging the company's marketing campaign.
None of the manufacturers created would be fatally wounded by the ban in the near term, according to research group iSuppli. Only 4.4 percent of North American phones shipped this year would face the restriction. However, virtually all would be forced to sell their existing phones at cut rates to prop up sales rather than take advantage of cutting-edge devices that would command a premium.
Most carriers would face more serious consequences, say reports. Verizon claims that 80 percent of its current devices alone use the patent and has joined Qualcomm in seeking a reversal of the ban during its review, which would be handled directly by President Bush. AT&T, Sprint, and T-Mobile have yet to weigh in on the new ban but have already voiced complaints earlier this spring that bans would hurt profits.
Two companies, however, may find the ban comes at an ideal time.
While a small portion of AT&T's current and upcoming phones use the offending Qualcomm chips, the 2.5G-only iPhone is exempt by using alternate components. This guarantees a smooth launch for the Apple-made device but should also give both Apple and AT&T an unexpected edge in the market, iSuppli analyst Jagdish Rebello has told AppleInsider.
"In the near term the benefits to [the] Apple iPhone will be positive," he says. "The ban will force competing carriers to AT&T to rethink plans to introduce enhanced 3G models to compete with the iPhone. If these new models have Qualcomm chipsets, then the carriers will not be able to offer them in the US under the current ban."
The prohibition would force other carriers, and even cellphone makers outside of Apple who also produce phones for AT&T, to instead push months-old equipment. Many of the phones now in jeopardy due to the ITC ruling are supposed to be the iPhone's main competitors, iSuppli adds, but will have to rest by the sidelines should the ban escape a Presidential veto.
And if it does, Apple's first cellphone will face near-ideal conditions for its June 29th introduction that could leave the device largely unopposed for its critical first months on the shelves.
In its ruling, the ITC determined that Qualcomm had infringed on a single patent held by one of its chief opponents in the communications business, Broadcom. The patent, which addresses a power-saving process that kicks in when cellular coverage runs dry, was deemed important enough by the trade bureau that a ban will be imposed in 60 days on any future device found to contain an infringing chip -- including many cellphones from the world's largest electronics firms.
Kyocera, LG, Motorola, and Samsung have already protested the ruling, pointing to the dead end it would create for the companies' US release schedules. LG in particular would suffer the greatest immediate blow from its heavy dependence on 3G chipsets for current and future American phones and has joined Qualcomm in formally protesting the decision.
But regardless of the number of phones affected by the ban, the impact may be especially hard for cellphone creators whose new phones will launch at or shortly after the deadline. Motorola's heavily promoted RAZR2 phone has so far been set to arrive in the US during the summer but would be forbidden under the new import rule, potentially sabotaging the company's marketing campaign.
None of the manufacturers created would be fatally wounded by the ban in the near term, according to research group iSuppli. Only 4.4 percent of North American phones shipped this year would face the restriction. However, virtually all would be forced to sell their existing phones at cut rates to prop up sales rather than take advantage of cutting-edge devices that would command a premium.
Most carriers would face more serious consequences, say reports. Verizon claims that 80 percent of its current devices alone use the patent and has joined Qualcomm in seeking a reversal of the ban during its review, which would be handled directly by President Bush. AT&T, Sprint, and T-Mobile have yet to weigh in on the new ban but have already voiced complaints earlier this spring that bans would hurt profits.
Two companies, however, may find the ban comes at an ideal time.
While a small portion of AT&T's current and upcoming phones use the offending Qualcomm chips, the 2.5G-only iPhone is exempt by using alternate components. This guarantees a smooth launch for the Apple-made device but should also give both Apple and AT&T an unexpected edge in the market, iSuppli analyst Jagdish Rebello has told AppleInsider.
"In the near term the benefits to [the] Apple iPhone will be positive," he says. "The ban will force competing carriers to AT&T to rethink plans to introduce enhanced 3G models to compete with the iPhone. If these new models have Qualcomm chipsets, then the carriers will not be able to offer them in the US under the current ban."
The prohibition would force other carriers, and even cellphone makers outside of Apple who also produce phones for AT&T, to instead push months-old equipment. Many of the phones now in jeopardy due to the ITC ruling are supposed to be the iPhone's main competitors, iSuppli adds, but will have to rest by the sidelines should the ban escape a Presidential veto.
And if it does, Apple's first cellphone will face near-ideal conditions for its June 29th introduction that could leave the device largely unopposed for its critical first months on the shelves.
Comments
I hear Steve is also going to re-align the planets for the 29th. Yer know... just because he can.
So you are saying that Steve is responsible for the US International Trade Commission ruling?
American Big Business: Yeah but it means a lot of money to us.
Government: But it's still illegal.
American Big Business: Yeah but it means a lot of money to us. Laws don't apply to us, or celebrities! It's all about the profits damnit!
Government: Not so fast!!! Paris Hilton get back in jail, and Big Business don't even think about trying to import those illegal phones.
American Big Business: Yeah but it means a lot of money to us. Just wait until we tell Dubya, you guys are in trouble. We're above the law, but to show you we have no hard feelings you can have Paris Hilton.
President George W Bush: There is a war on terror going on, we have to have those phones to track terrorists. I hereby veto this ban. (Big words added by author to help prop up Bush's vocabulary)
Not only did I post this FIRST but I also posted it in (arguably) the more relevant forum too...
http://forums.appleinsider.com/showthread.php?t=75253
Dave
Verizon claims that 80 percent of its current devices alone use the patent and has joined Qualcomm in seeking a reversal of the ban during its review, which would be handled directly by President Bush.
Now THAT"s a good idea...
i hope this adresses fake signal bars because most of these phones display full bars to make you feel good, until you decide to make a call, and the worst is sprint, follow by the old nextel and so on
Could you please explain the thought connective between ITC/3G/Qualcomm and signal bars?
Gotta call a technical foul....
Not only did I post this FIRST but I also posted it in (arguably) the more relevant forum too...
http://forums.appleinsider.com/showthread.php?t=75253
Dave
Actually, you weren't first. I beat both you and AI by a day:
http://forums.appleinsider.com/showt...t=75197&page=2
Yesterday, 10:11 PM \t #49
TBaggins
Registered User
\t
Here's a story AI should get on. Apple got off kind of lucky in a way for NOT having 3G in the iPhone, as many 3G chipsets/phones are affected by this bombshell ruling:
The case involves phones based on two types of high-speed wireless technology, EV-DO -- for which Qualcomm is the dominant chip supplier -- and W-CDMA.
http://biz.yahoo.com/rb/070607/qualc...dcom.html?.v=6
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I hear Steve is also going to re-align the planets for the 29th. Yer know... just because he can.
Can he also make the AAPL share price shoot to $250
I guess EDGE was a great desicion after all. Never doubt his Steveness!
EDGE wasn't a great decision, just a necessary one, because ATT's 3G coverage wasn't up to the task in '07.
Also, the ban on certain 3G chipsets may or may not be long-lasting... it could drag out, or it could be overturned in short order.
Even so, luck is definitely on Apple's side here. Had the iPhone had one of the banned chipsets in it, arm-waving idiot pundits would be coming out of the woodwork to spout "iPhone is teh DOOMED!!!" FUD in order to grab hits (hi Dvorak).
.
Government: What you are doing is illegal.
American Big Business: Yeah but it means a lot of money to us.
Government: But it's still illegal.
American Big Business: Yeah but it means a lot of money to us. Laws don't apply to us, or celebrities! It's all about the profits damnit!
Government: Not so fast!!! Paris Hilton get back in jail, and Big Business don't even think about trying to import those illegal phones.
American Big Business: Yeah but it means a lot of money to us. Just wait until we tell Dubya, you guys are in trouble. We're above the law, but to show you we have no hard feelings you can have Paris Hilton.
President George W Bush: There is a war on terror going on, we have to have those phones to track terrorists. I hereby veto this ban. (Big words added by author to help prop up Bush's vocabulary)
Yup, Bush will take it hard in an intimate place whenever big business says so. Sadly, so would most other US politicians, and all the ones with a chance of being elected
I guess EDGE was a great desicion after all. Never doubt his Steveness!
Like he could have predicted the outcome of a legal battle. I would have preferred a different outcome, it seems as if the phone makers are bystanders caught in this though no fault of their own.
So you are saying that Steve is responsible for the US International Trade Commission ruling?
Yes.
Can he also make the AAPL share price shoot to $250
Yes.
And?
2.5G still sucks, EDGE still sucks, GSM still sucks. Blocking Qualcomm won't make AT&T's abysmal QoS any better.
Picky, picky, picky.
2.5G still sucks, EDGE still sucks, GSM still sucks. Blocking Qualcomm won't make AT&T's abysmal QoS any better.
Picky, picky, picky.
He's got a point, though. EDGE? Slow. GSM? Not as reliable as CDMA, all else being equal (which is why the air interface on 3G GSM is actually CDMA-based, i.e. WCDMA). ATT's quality of service? Consistently ranked mediocre compared to other US carriers. ATT's customer service? Bad.
Will it be enough to derail the iPhone? Hell no. The iPhone is a breakthrough, game-changer of a product. But it's also like the star player on a .500 team here.
.
He's got a point, though. EDGE? Slow. GSM? Not as reliable as CDMA, all else being equal (which is why the air interface on 3G GSM is actually CDMA-based, i.e. WCDMA). ATT's quality of service? Consistently ranked mediocre compared to other US carriers. ATT's customer service? Bad.
Will it be enough to derail the iPhone? Hell no. The iPhone is a breakthrough, game-changer of a product. But it's also like the star player on a .500 team here.
.
Oh, I wasn't saying that I don't agree.