Apple agrees to become Qualcomm's licensee and returns to their baseband chips

By: Beastian (noemail.delete@this.aol.com), April 20, 2019 9:49 am
Room: Moderated Discussions
Doug S (foo.delete@this.bar.bar) on April 19, 2019 11:05 pm wrote:
> Maynard Handley (name99.delete@this.name99.org) on April 19, 2019 3:53 pm wrote:
> > Doug S (foo.delete@this.bar.bar) on April 19, 2019 2:48 pm wrote:
> > > Maynard Handley (name99.delete@this.name99.org) on April 19, 2019 11:32 am wrote:
> > > > Details: based on
> > > > https://www.macrumors.com/2019/04/18/apple-qualcomm-estimated-settlement-terms/
> > > >
> > > > (a) Apple now has what it didn't have before, a guaranteed IP agreement
> > > > with QC. This clears the way for Apple to build their own modems.
> > > >
> > > > (b) What was Apple paying before?
> > > > https://www.eetimes.com/document.asp?doc_id=1334184#
> > > > Interim agreement had Apple paying $7.5 per phone. QC wanted $18/phone (and as a fraction
> > > > of the cost of the phone, so would rise as iPhones got more expensive, or if Apple put
> > > > modems in other devices. Wonder why laptops with built-in cellular are so rare...)
> > > >
> > > > So Apple pays slightly more per phone than they were paying before this all started,
> > > > a LOT less than QC wanted, and has the possibility of escaping from QC altogether
> > > > in three or four years if they can do the engineering necessary.
> > >
> > >
> > > I don't buy that UBS guy's figures. The $2 EPS gain for Qualcomm suggests about $2.4 billion
> > > a year at their current share count. If they assume Apple will ship 200 million phones once
> > > they've fully phased in Qualcomm chips across the line (which will take a few years) that equals
> > > $12/phone not the "$8 to $9" he said. Not sure how what sort of math he's using.
> > >
> > > However, Qualcomm earns money from Apple via two sources, the licensing AND the margin on the
> > > chips themselves. There is no way to establish what Apple is paying per phone in licensing fees
> > > without knowing how much Qualcomm makes per chip they sell to Apple, and that is something we
> > > will never know. But at a maximum of $12 all-in, there seems to be little room for Qualcomm
> > > to be making more than the $7.50 Apple was paying before, and it could well be less.
> > >
> > > Both companies might "win" depending on how the numbers work out. If previously Qualcomm was making $4.50
> > > on every chip they sold to Apple, then with the separate $7.50 licensing fee that comes to $12 and gives
> > > them their $2 EPS. However, if they now charge Apple more for the chips and make $10 each on them, while
> > > charging only $2 each in licensing then Apple can declare "victory" in paying less for the licensing
> > > - close to the $1.50/phone they wanted, while Qualcomm can claim "victory" in getting the same exact
> > > amount of money per phone out of Apple they were getting before this whole thing started.
> >
> > I agree this is unclear. BUT obviously the IDEAL case for QC is to have the
> > licensing fee as high as possible, because that revenue stream persists (unlike
> > the modem sales stream) after/if Apple start making their own modem.
> > I'm guessing that consideration (plus who knows what other insight/insider knowledge)
> > is what drove the claim (guess?) that the licensing fee is now ~$8..9.
> >
>
>
> If Apple starts making their own modems they'll likely have purchased some IP in the process, probably
> Intel's since it looks like they aren't going to be using it for anything anyway, so they'd be able
> to strike a new deal with Qualcomm that accounted for the value of Apple's IP. It wouldn't be enough
> for a straight cross license, but it would reduce what they would have to pay. And once Apple is
> able to drop US style CDMA and go LTE/5G only a lot of Qualcomm's most valuable IP falls off the
> radar. The bulk of the valuable 5G patents are held in China, not by Qualcomm.
>
> Also consider that Apple undoubtedly has a lot of IP in the CPU/SoC/etc. space that Qualcomm may
> need to license. Since Apple's designs are more advanced than the Snapdragon, they are more likely
> to be following in Apple's footsteps there and using Apple's IP than the other way around.
>

Apple didn't exactly start from scratch when it started designing CPUs and brought in the talented team from PA Semi. For their own GPUs, they studied Imagination's GPU designs for several years before cutting them off with their own design; but just as with Qualcomm, they did so without suitable payment for the IP they stole off of Imagination for a long period. They ended up settling with a private agreement for that IP with Imagination:

https://www.eenewseurope.com/news/how-much-did-apple-pay-settle-imagination-0

Say or believe what you will about Apple's tech prowess, but if you were one of the hard working employees at one of those smaller firms that Apple tried to squash, you'd be pretty pissed off if you lost your job because they were ripping you off for so long. These aggressive moves by Tim Cook will likely come back to haunt him.

The recent agreement between the Qualcomm and Apple have cemented Qualcomm's licensing terms with even more industry precedent, and I have no doubt Steve M. will be just as paranoid working with Apple this time as he was before:

https://www.bloomberg.com/news/articles/2019-01-18/apple-coo-set-qualcomm-license-spat-aside-in-bid-for-phone-chips

Apple won't have the kind of help they did with CPUs or GPUs, and it may be more of a slog for them than before. Even after Apple finishes the large technical challenge of designing a power efficient, high performance, they would owe Qualcomm the same royalties for 3G/4G LTE/5G standards. The industry has moved on from 2G techniques and Qualcomm's name is associated in the minds of many with the legacy 2G CDMA voice standard, but Qualcomm has vast IP holdings in subsequent with dominant share in 3G (CDMA2000 & WCDMA) and 4G (OFDMA).
< Previous Post in ThreadNext Post in Thread >
TopicPosted ByDate
Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/04/18 03:47 PM
  antitrust implications? (NT)anonymous22019/04/18 07:53 PM
    antitrust implications?Doug S2019/04/18 08:50 PM
      antitrust implications?Beastian2019/04/18 10:02 PM
  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/18 08:45 PM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsdmcq2019/04/18 10:05 PM
      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/18 10:28 PM
        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAdrian2019/04/18 11:48 PM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsdmcq2019/04/19 05:54 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAdrian2019/04/19 09:33 AM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsdmcq2019/04/19 10:54 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 11:03 AM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 07:38 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipssylt2019/04/19 09:28 AM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 10:03 AM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipssylt2019/04/19 11:08 PM
                  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/20 09:15 AM
                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 09:41 AM
                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipssylt2019/04/20 01:22 PM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/20 07:31 PM
                        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 09:41 PM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsGroo2019/04/21 06:50 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAdrian2019/04/19 09:45 AM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 10:27 AM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 11:09 AM
                  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 11:17 AM
                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 12:19 PM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsGroo2019/04/20 05:50 AM
                        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 09:49 AM
                          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/20 10:08 AM
                            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 11:18 PM
                              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 11:19 PM
        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/19 09:46 AM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 10:50 AM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/19 03:17 PM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/19 09:59 PM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsGroo2019/04/20 08:28 AM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/20 09:33 AM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 11:26 PM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/20 09:55 AM
      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAndreas2019/04/19 03:55 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAndrew Clough2019/04/19 05:19 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsGroo2019/04/19 06:44 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 10:49 AM
    Read this and realize what Apple doesGroo2019/04/19 03:27 PM
  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 10:32 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/04/19 11:15 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/19 01:48 PM
      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/19 02:53 PM
        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/19 10:05 PM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/20 09:49 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/20 11:07 PM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/05/15 06:51 AM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/05/15 10:16 AM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/15 11:21 AM
  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/04/25 10:37 AM
    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/25 11:43 AM
      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsdmcq2019/04/26 01:22 AM
        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/04/26 09:05 AM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/26 10:57 AM
            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsAnon2019/04/27 03:11 PM
              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/04/27 07:15 PM
                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/04/28 05:59 AM
                  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/05/02 11:01 AM
                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/02 02:58 PM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/02 03:27 PM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsanonymou52019/05/02 04:37 PM
                        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/03 12:35 AM
                          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/03 08:32 AM
                            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/03 12:32 PM
                              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/03 02:45 PM
                                Apple agrees to become Qualcomm's licensee and returns to their baseband chipsUmmmm...2019/05/03 03:35 PM
                                  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/03 03:56 PM
                                  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/03 08:10 PM
                                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/03 08:11 PM
                                    Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/03 09:12 PM
                                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/04 07:33 AM
                      Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDoug S2019/05/03 12:11 AM
                        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/05/06 08:09 AM
                          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/06 10:40 AM
                            Apple agrees to become Qualcomm's licensee and returns to their baseband chipsBeastian2019/05/06 12:16 PM
                              Apple agrees to become Qualcomm's licensee and returns to their baseband chipsMaynard Handley2019/05/06 03:15 PM
                        Apple agrees to become Qualcomm's licensee and returns to their baseband chipsSimon Farnsworth2019/05/07 04:23 AM
          Apple agrees to become Qualcomm's licensee and returns to their baseband chipsdmcq2019/04/26 11:52 AM
  Apple agrees to become Qualcomm's licensee and returns to their baseband chipsDummond D. Slow2019/05/02 08:25 AM
    So Qualcomm got less than 2/3 of what they wantedDoug S2019/05/02 09:35 AM
      So Qualcomm got less than 2/3 of what they wantedBeastian2019/05/02 10:43 AM
Reply to this Topic
Name:
Email:
Topic:
Body: No Text
How do you spell green?