Slashdot Mirror

← Back to Stories (view on slashdot.org)

Qualcomm Says Apple To Stop Paying Royalties (reuters.com)

Posted by msmash on from the on-hold dept.

Apple has decided to withhold royalty payments to its contract manufacturers that are owed to Qualcomm, until a legal dispute between the companies is resolved, the chipmaker said on Friday. From a report: Qualcomm, the largest maker of chips used in smartphones, said it will not receive royalties from Apple's contract manufacturers for sales made during the quarter ended March 31. San Diego, California-based Qualcomm also slashed its profit and revenue forecasts for the current quarter, to account for the lost royalty revenue.

7 of 58 comments (clear)

  1. Fair terms ? by Alain+Williams · · Score: 4, Insightful

    Apple also noted it had been trying to reach a licensing agreement with Qualcomm for more than five years, but said Qualcomm had refused to negotiate "fair terms".

    That is a really interesting view Apple — some people would not view some of what you do as 'fair terms', for instance stopping 3rd party repairs. So: why one rule for you and another for others ?

  2. Drive them into the sea! by hackel · · Score: 3, Insightful

    I despise Apple, but I hate Qualcomm even more. They should have stuck to email clients. Their "royalties" are complete bullshit. I wish that Apple, Samsung, and others would get together to push an open standard manufacturers could use without these ridiculous royalty payments that always get passed on to the consumer.

    1. Re:Drive them into the sea! by sl3xd · · Score: 3, Informative

      Qualcomm's patents are for CDMA, its competitor to the GSM standard. The two operate so differently it's hard to imagine Qualcomm owns any patent in the GSM pool.

      LTE is built upon the GSM standard, which appears to be free of Qualcomm's CMDA grip.

      Devices on the Verizon and Sprint networks fail back to CDMA when LTE isn't available... and that means Qualcomm can demand its licensing fees.

      GSM-only phones (like AT&T, T-Mobile, and most of the rest of planet Earth) don't need to worry about Qualcomm licenses.

      --
      -- Sometimes you have to turn the lights off in order to see.
  3. Re: Those intel mobile modems must be geting good by hackel · · Score: 2

    CDMA is garbage and needs to die, along with any carrier that continues to use that terrible, proprietary architecture.

  4. Not just Apple by Guspaz · · Score: 4, Insightful

    It seems like everybody is suing or has sued Qualcomm these days, directly or indirectly. Apple, Korean anti-trust regulators on behalf of Samsung, BlackBerry, the FTC (anti-trust violations), Meizu, Broadcom...

    Basically, Qualcomm managed to get a bunch of standard-essential patents, and then used those to build a near monopoly by refusing FRAND licensing like they're required to. There is a reason why Samsung phones use Samsung chips in most countries, but Qualcomm chips in North America, and that's Qualcomm's patent abuse.

    So, say what you will about Apple, but they're just the most visible victim.

    1. Re:Not just Apple by clonehappy · · Score: 2

      since America is one of the only places that uses CDMA for cell phones, it makes it a uniquely American problem.

      Wrong. Qualcomm's patents definitely extend past their proprietary IS-95 and CDMA2000-based systems. 3G GSM using WCDMA and 4G LTE all depend to some extent on Qualcomm's intellectual propertly.

      Sure, to use the OP's example, Samsung pays a lot less to Qualcomm by developing their own 3G/4G modem chipsets rather than sourcing them directly, but it's not like Qualcomm was stupid enough to cut themselves out of the game completely. In short, they aren't going anywhere for a good long while even after CDMA2000 is a page in the history books.

  5. Re: Those intel mobile modems must be geting good by slew · · Score: 2

    I agree in terms of Qualcomm turning the screws. That's ridiculous on their part. I was just saying that it's not like Apple has no other options in terms of looking for a chip manufacturer they can partner with. Although I am ignorant as to contractual obligations and admittedly didn't RTFA...

    Well if you believe Qualcomm's position: you pay the same royalty rate *regardless* of who you buy your modem chip from.

    *If you buy a modem chip from Qualcomm, in addition to paying qualcomm for the chip, you need to pay royalties on the total wholesale price of your handset.
    *If instead you buy your modem chip from another vendor that does 3G/4G or CDMA (say intel), you need to pay Qualcomm the same royalties.

    So basically Qualcomm wants royalties based on the total wholesale price of the handset even if they didn't sell you a single chip in that handset because they believe you cannot implement device that interfaces to a 3G/4G or CDMA cell-tower without licencing their wireless patents. Although nobody likes this situation, only Apple has decided not to pay (other than a few chinese companies that use the proprietary chinese TD-CDMA scheme and only sell handsets to the internal chinese market).