Signed pact means that LG's phones will be powered by Snapdragon chips for another five years

Signed pact means that LG's phones will be powered by Snapdragon chips for another five years
Chipmaker Qualcomm really doesn't get along with too many phone manufacturers. After all, as detailed in the FTC v. Qualcomm lawsuit that was decided against the company, Qualcomm has a number of sales practices that are considered anti-competitive. These include its "No license, no chips" policy, royalties computed by using the retail price of a phone, and its refusal to license standard-essential patents to competitors at a Fair, Reasonable and Non-Discriminatory (FRAND) rate. The latter are patents that manufacturers need to license so that their products can meet certain technical standards.

Back in December, Samsung dropped out of a Korean antitrust suit against Qualcomm and was replaced by LG. In 2016, Qualcomm was fined $915 million by the Korean Fair Trade Commission for patent abuse. Qualcomm didn't accept the fine and a trial ensued. Complainants included companies you're familiar with including Apple, Samsung, Intel, MediaTek, and Huawei. But Qualcomm and Samsung agreed to a cross-licensing deal and that is when Sammy dropped out and LG dropped in. And this past June, LG's licensing agreement with Qualcomm expired.

LG had 2.4% of the global smartphone market during the first half of the year


Well, if you're an LG fan worried about the company securing a new agreement with the chipmaker, have no fear. On Tuesday, Qualcomm announced that it had reached a new global patent license agreement with the manufacturer that will allow LG to use Snapdragon SoCs, modem chips and other components on 3G, 4G, and 5G single-mode and multimode complete devices. The contract runs for five years and Qualcomm will receive royalties from LG. While the dollar terms of the agreement weren't disclosed, Qualcomm noted that "The agreement is consistent with Qualcomm’s established global licensing terms."


As we touched on earlier, the FTC v. Qualcomm court case resulted in Judge Lucy Koh deciding against Qualcomm, which should force the company to change the way it sells chips. However, the chipmaker has asked for a stay of the ruling until it completes the appeals process and that only seems fair. Qualcomm does not want to be in a position where it renegotiates all of its contracts and then wins the appeal forcing it to revert to the pacts' previous terms. But Judge Koh denied the request for a stay and it is now in the hands of the U.S. Court of Appeals for the Ninth Circuit.


According to IDC, LG is the ninth-largest smartphone manufacturer in the world with a global market share of 2.4% during the first half of the year. IDC analyst Ryan Reith feels that getting LG to sign on the dotted line is a big win for Qualcomm. Reith said that the deal is "a win for Qualcomm because it locks up one of the top 10 handset manufacturers in a more top-heavy market. There are fewer and fewer brands out there."

For LG, like Apple before it, signing a licensing deal with Qualcomm gives it a supply of 5G modem chips. By the middle of next year, the U.S. should have at least one nationwide wireless 5G network up and running. You might recall that Apple was feeling desperate earlier this year after Qualcomm decided not to sell the company 5G modem chips after the two firms filed numerous suits against each other. Apple was rushing Intel to develop its 5G modem chip in time for use in the 2020 iPhones. But back in April, Apple and Qualcomm surprised everyone by reaching a settlement. All legal action was dropped and Apple paid Qualcomm a reported $4.5 billion in exchange for a six-year licensing agreement (with a two-year option) and a multi-year chip supply agreement. Apple subsequently purchased Intel's smartphone modem business for a sum believed to be close to $1 billion.

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8 Comments

2. Venom

Posts: 3541; Member since: Dec 14, 2017

LG needs to focus on making great phones again because they just don't have anything right now.

8. Meridian

Posts: 2; Member since: Aug 23, 2019

Lg has the best headphone jack and soon it will be the only major manufacturer to do so... There cameras are better then sammy they dont cheapout by using exynos so i say its all about what you need g8 is an awesome phone it if it didn't have a notch it would've sold a lot

3. Whitedot

Posts: 809; Member since: Sep 26, 2017

They could just drop off chips and mass produce dummy phones as toys.

4. oldskool50

Posts: 1531; Member since: Mar 29, 2019

First off, Qualcomm sells the best chip technology for CDMA standards, which is why many OEM's use them. Qualcomm has a right to offer their product at the price they think they can get for it. Just like every one else does. If you don't wanna pay, then you can be like Apple and buy someone else chips and risk getting a crippled piecxe of crap, which Apple didnt care and used it anyways so they could try to screw Qualcomm, and then they went crawling back. Qualcomm uses Samsumg to make stuff, so Samsung being in the suit likely would have swung SK Court in favor of the OEM's. SO Qualcomm rushed an did a huge deal which took Samsung out the pie. Samsung is South Korea's largest single employer. They are also 25% of their country's GDP. Something even Apple doesn't have. That means Samsung has some power in SK that LG doesn't. Now LG is doing a deal. The fact is, Qualcomm does have the industry at their mercy because they simply make the best tech. And none of these OEM's can make a compatible CDMA modem without Qualcomm patents. Thats why Qualcomm won;t sell them. Because if Qualcomm has to release the patents on their hardware, OEM's like Samsung, TSMC who have fabrication facilities can then make their modems compatible with carriers in Chine and US's Verizon and Sprint without needing to buy Qualcomm's hardware and QC will make less money. It's that simple. For qualcomm their patents are their total leverage. Its just like Samsung with OLED. They spent the most money to perfect the technology and they are nearly the sole provider for the best displays. Thats why Apple dosnt want to buy them because Samsung can charge whatever they want because Japan Display and LG can't make displays at the same level of quality as Samsung And since most peopel say, when you have the best the best cost more money, no one should have a problem with that. Because the best stuff does cost more money. But OEM's want to dpend less on other outfits. A company like Samsung would basically kill Qualcomm because Qualcomm doesn't have its own factories. They use TSMC and Samsung. Since Samsung has its own fabs, they could basically never make a chip for QC again and just make their own and QC would be left with nothing more than selling patents and licenses. But would lose money on hardware sales.

5. apple-rulz

Posts: 2112; Member since: Dec 27, 2016

Samsung can’t even get their own photoresist.

6. JCASS889

Posts: 539; Member since: May 18, 2018

I just got cancer from the format and short phrasing of this post.

9. Meridian

Posts: 2; Member since: Aug 23, 2019

Nice comment... But samsung oled for mobile is not perfect.. All samsung oled have a minor touch issue It is a minor issues but an issue nonetheless so its not perfect

7. CDexterWard

Posts: 75; Member since: Feb 05, 2018

Hopefully LG can bring something exciting with 5G, otherwise they are already at the bottom of a slippery slope.

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