Apple and Qualcomm's messy divorce was over software, not chips

Apple and Qualcomm's messy divorce was over software, not chips
The FTC is after Qualcomm for what it claims are the company's anti-competitive chip licensing practices; the testimonies of Apple's COO Jeff Williams and supply chain executive Tony Blevins were both focused on how the company bought chips from Qualcomm for the iPhone. So it would appear to the average Joe and Josie that Apple and Qualcomm's split was due to disagreements over Qualcomm's "no license, no chips" policy, and its failure to license standard essential patents in a Fair, Reasonable and Non-Discriminatory (FRAND) manner.

But Bloomberg reported on Friday that based on emails it was allowed to read, a fight over access to software broke up the business relationship between the two tech giants. Apparently, Qualcomm refused to give Apple computer code that would be used to customize modem chips, like the kind Qualcomm sold to Apple. COO Williams told Qualcomm that Apple would protect the chip maker by firewalling the engineers using the code. And in a September 2017 email, the executive wrote "In my wildest imagination of some evil intention of Apple, I have trouble coming up with a real scenario where anything of significant value could be leaked based on this code."

Apple's plan to order $2 billion worth of Qualcomm's modem chips for the 2018 iPhone models was being held up by the software dispute at this point. Qualcomm CEO Steve Mollenkopf gave Apple a proposition via email; in return for access to this software, Apple would have to agree to install Qualcomm modem chips on 50% of the 2018-2019 iPhones. This deal, of course, was never agreed to. Apple is using only Intel's modem chips on its 2018 handsets and could stick with them again next year.

The emails have not been made part of the FTC v. Qualcomm trial thus far, but they do seem to indicate that software, not chips, is responsible for the biggest breakup since the Beatles split in 1970.


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