We have been following the fight of Apple with the Qualcomm in court for a while. Now, the Bloomberg Businessweek talked directly with the general counselor of Apple, Bruce Sewellin order to get more detailed information about the backstage of the saga.
Apple’s biggest problem with Qualcomm is the allegedly high fee charged by Qualcoom for Apple to use its components on iPhones. Basically, they charge 5% (or about $ 30) on royalties for each device sold and even more if the device is more expensive (with a larger storage option), even if it has nothing to do with cellular connectivity itself (Qualcomm component).
Since Qualcomm is one of the manufacturers that invests the most in research and development (R&D), its modems are the most advanced today. Because it values quality, Apple preferred to opt for it, but remained with an agreement to lower that fee to $ 10 per device and, in return, not to raise any objection against Qualcomm’s patents.
According to court documents, Qualcomm allegedly alleged “conspiracy” as everything would have surfaced only now due to an alleged conversation between a senior Apple executive (possibly Tim Cook) and a Samsung executive (probably the vice president). President Jay Lee) at the Allen & Co conference two years ago. Cook would have suggested that the company “pressure” South Korean regulators to step up investigations on Qualcomm (investigations that have been going on for some time). If that were to happen, there would be a reduction in chip prices, which would benefit both Apple and Samsung.
Despite the whole story, Sewell says that “nothing inappropriate has happened”.
Apple saying to Samsung “You are in Korea and you can follow this case carefully” seems to be nothing more than the kind of conversation that two CEOs can have.
After that, the South Korean body ruled against Qualcomm and ordered changes to its pricing scheme. With the snowball effect in the United States, the Federal Trade Commission (FTC) filed a lawsuit against the manufacturer – and then Apple too.
Sewell explained that the only reason Apple waited all this time was, in fact, for lack of a second option. Now that Apple can also count on Intel’s supply, the way is open for it to seek justice; this is, royalties up to US $ 4 per device, without differentiating between models with more storage, especially when it comes to cellular connectivity, which is just one of the internal components, “nothing special” – said the executive.
Cellular connectivity is important, but not as important as it used to be. How is it fair for Qualcomm to charge up to $ 5 more for technology on a more expensive phone, even though the devices are exactly the same?
The speech is different from Qualcomm’s, of course. She previously said that the iPhone would not exist if it were not for its technology.
In fact, the company seems to brag a lot about its patents and has been trying to promote itself by placing advertisements about its inventions in podcasts and even in the subway station in Washington, USA, with words like: “Qualcomm is the reason you love your smartphone, no matter what device it is. ”
Finally, one of the company’s patents that we know well was cited by Qualcomm’s vice president of technology:
What is the first thing you do when you land on a flight? You turn Airplane Mode off. By the way, we invented Airplane Mode.
As much as Qualcomm hopes that Apple will reach an agreement, Sewell said, “This will not happen until the manufacturer reviews the licensing model it has applied across the industry.” This means that it may take a few years before we see the end of this novel …
Check out the full interview on the Bloomberg.