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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27 Comments

1. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Firstly, I like how the editors here are pushing the propaganda that QC is not licensing FRAND patents as FRAND. They aren't FRAND and never have been. Qualcomm has not signed any agreements with any standards essentials body around the patents in question and not even pretended to license under any FRAND agreements. Apple is just butthurt that they signed an agreement based on a percentage of their device's price rather than a fixed amount. They don't want to pay because they are Apple, and will hopefully lose that case. Second, the FTC case will likely determine if QC had been monopolistic/anticompetitive and if they win, the judge can impose fines and set some rules for future agreements. But in no way can they take QC patents and make them standards essential and licensed under "FRAND" as iFans and media puppets like to imagine while furiously wanking. So I do not know why all the iFans are so up in arms, but this won't change anything too seriously.

2. domfonusr

Posts: 1073; Member since: Jan 17, 2014

Did not Qualcomm's CDMA patents become "standard essential" when they became part of the 3GPP2 standards? Now, I do not know if that standard even still exists, since the 3GPP path, through LTE and 5G NR, is now adopted as the only way forward for mobile networks across the world, and 3GPP2 has, as far as I can tell, been discarded. Furthermore, Qualcomm's patents for WCDMA, and later LTE as well as the more recent 5G NR, are certainly "standard essential" even though they are part of the 3GPP. This article seems to indicate that the squabble had nothing to do with anything "standard essential", but rather Apple wanted access to Qualcomm's software regarding the design process of the inner workings of their modems... and since Apple took other Qualcomm tech and gave it to Intel, I would say that Qualcomm rightfully protected their IP in this one case. Now, the next question is, "can Qualcomm continue the 'no license, no chips' policy on the grounds of their patented modem design customization software, which they protected in this case with Apple, or does this practice fall under something that is 'standard essential' (such as CDMA or WCDMA/LTE/5G NR patents), and therefore needs to be guided under FRAND?" That is where this debate needs to go next, if there is still a debate to be had at all.

7. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

Is there a court or an authority that concluded Apple gave Intel QC tech or is it just your speculation?

23. domfonusr

Posts: 1073; Member since: Jan 17, 2014

See here: https://www.phonearena.com/news/Qualcomm-says-Apple-stole-its-secrets-and-gave-them-to-Intel_id109220 It is still in the phase where it is a lawsuit... so Qualcomm still has to prove it in court.

24. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

So, it's just a speculation that you want to manipulate people to think is a truth.

25. domfonusr

Posts: 1073; Member since: Jan 17, 2014

No, I was not intentionally trying to manipulate people... I knew I had read about it before, but needed to find where. I figured if I could find the article on PhoneArena, that I could repost the link here. So I found it and read it again, and posted the link here. In re-reading it, I did find that my original recollection of it admittedly omitted some details, but that is why I posted the link for everybody to see. I'm not trying to hide anything from anyone, and I am not trying to manipulate people. I admit to my mistakes, and my mistakes are my own. I am not trying to defend either Qualcomm or Apple.

26. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

You have a thumbs up from me. So it’s safe to say there are no indications that Apple passed QC technology to Intel, only speculations, right?

27. domfonusr

Posts: 1073; Member since: Jan 17, 2014

Aside from whatever Qualcomm can prove at some point, there are only allegations at this point, yes.

8. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

When a company agrees to integrate its technology into the standard, it means it should license it as frand; qc wants only the rights of owning the standard (protection, exclusivity - remember that Exynos can’t be used in USA) but not the obligations (reasonable access).

12. mootu

Posts: 1421; Member since: Mar 16, 2017

Exynos can be used in the USA, there is nothing stopping Samsung using it. The big problem for Samsung is that it is actually cheaper to purchase the full Snapdragon SoC than it is to licence the patents to sell Exynos in the US. Qualcomm got very crafty with that one.

14. Spacekid

Posts: 16; Member since: Jan 17, 2019

I wish they'd just use snapdragon everywhere or just develop their own gpu because fortnite is basically crap on exynos.

15. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

How can Samsung sell Exynos chips in USA, if it needs to pay for qc patents?

16. mootu

Posts: 1421; Member since: Mar 16, 2017

Why can't they? The Galaxy S6 was Exynos only as the SD 810 was rubbish. It's just cheaper for them to use Qualcomm SoC's due to licencing costs. There's no law that says they cannot use Exynos, they choose to use QC for financial reasons. Put it this way, if the FTC wins their case you may just see Exynos being used in Samsung's flagships in the US as they won't be hindered by licencing fees.

17. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

Communication market in US is a monopoly where everybody has to pay qc - that’s why the trial over modems this days.

18. Finalflash

Posts: 4063; Member since: Jul 23, 2013

It is a monopoly because QC sells their whole chip including modem, cpu, gpu, etc. as a package. If you just want to license the modem, as Samsung has done previously for the exynos, it will cost slightly less than the whole package. To make it easier, you can get the gpu, cpu, modem, etc from QC for $10. For just the modem, it will cost you $9. So now you have to spend additional money to get the other components from where ever else. This is usually a terrible business decision especially because a very very small number of people care about different cpus and gpus for marginal differences in performance. That is why QC rules the market because you NEED their modem chips. In the case of Android OEMs, you might as well rent the whole thing. In Apple's case, you have to pay the $9 and they are pissed because they hate paying for others' tech. They believe rounded rectangles and rubber banding is worth $30 and $20 per device, but actual modem tech....pennies.

19. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

No, dude, qc has a monopoly because it owns cdma and most patents of the gsm networks used in USA. You can’t make a modem without breaking a qc patent, because carriers use only qc patented tech. Intel and Apple have found a way, but it turns out it is a bit harder then they thought, because they can’t tune the modems like they are tuned by the company that built the standard.

20. mootu

Posts: 1421; Member since: Mar 16, 2017

That still soesn't mean Exynos cannot be used in the USA as you claimed. Everyone has to pay the licence fee, and rightly so as QC spent billions developing it but there is no law that a certain SoC cannot be used as you claimed.

22. Leo_MC

Posts: 6710; Member since: Dec 02, 2011

I did not investigate thoroughly but from what I have read, QC abused the standard essential patents it owns (you know which one: those that FTC is saying should have always been FRAND) by preventing Samsung to sell Exynos chips (with integrated modems) for 25 years. You are right, everyone should pay a fee, but while those patents are essential and standard in USA, QC had the right to refuse licensing them just because they didn't "wanna". So it was a business decision to use SD chips (with QC integrated modems) instead of going the Apple way. That is what this law suite is about - the refusal of a company to license ESSENTIAL AND STANDARD patents (if there wasn't about a standard, nobody would have cared, because they could have use another standard tech, but nobody can build a modem without those patents) at a fair price, but we can see here that QC went even further and just refused to license altogether, if that meant the market could become competitive.

3. Back_from_beyond

Posts: 1240; Member since: Sep 04, 2015

So basically Apple wanted access to the inner workings of Qualcomm chips and Qualcomm refused, no doubt worried Apple would copy and steal it for their own modems down the line. Seems a perfectly good reason to deny the request.

4. dimas

Posts: 3296; Member since: Jul 22, 2014

"Qualcomm, we just want to know the computer code to ensure that you're giving us the right modem speed. Don't worry, we are not reverse engineering your modem or planning to clone them for in-house production, promise." $7.50 for a great mobile modem is already cheap and apple still want to squeeze more out of qualcomm's technology. Intel was their bad karma last year.

5. lyndon420

Posts: 6518; Member since: Jul 11, 2012

Yeah we know it's about software...apple scrambled to change theirs at the last minute - which brought more bugs to their OS etc.

6. Shkselectah

Posts: 35; Member since: Jun 26, 2018

Apple you have to pay

11. Mikele

Posts: 110; Member since: Nov 19, 2013

Yeah

9. RoboticEngi

Posts: 1251; Member since: Dec 03, 2014

So Qualcomm are in the court because they did not want Apple to copy their modem....it's unbelievable that apple can continue with this......how many great companies have they trashed, by stealing their ideas and technology?

10. SIGPRO

Posts: 2810; Member since: Oct 03, 2012

Good that QC did not allow Fruit Company access! We all know that they have stolen tech in the past!

13. Jrod99

Posts: 703; Member since: Jan 15, 2016

Quick. Someone call the tech expert.

* Some comments have been hidden, because they don't meet the discussions rules.

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