Recalling Apple v. Qualcomm
Reed Albergotti (via Eric Migicovsky):
One of the first stories I covered then was Apple’s lawsuit against Qualcomm, which was accused of having a wireless modem monopoly and overcharging companies for the device. Apple paid Qualcomm about $7 per phone.
The opening arguments in that trial were riveting. Apple’s slide presentation included a photo of Radar O’Reilly, the comic relief radio operator from M.A.S.H. That was Qualcomm, Apple’s lawyers argued, the company that simply operated the radio on Apple’s otherwise sophisticated device.
Then it was Qualcomm’s lawyers’ turn. They revealed bombshell documents that had not been publicly seen before; Apple’s lawyers had accidentally sent them to Qualcomm.
[…]
Apple had tried to replace some of Qualcomm modems with a different model made by Intel. But Qualcomm chips were so much faster that Apple had to secretly throttle them so that all of its phones would operate at the same level.
Qualcomm only sought a percentage of the cost of the iPhone, not of all the software and services that used the modem.
Previously:
- U.S. Sues Apple Over iPhone Monopoly
- Qualcomm Loses U.S. Antitrust Ruling
- Qualcomm and Apple Agree to Drop All Litigation
- Apple Sues Qualcomm
8 Comments RSS · Twitter · Mastodon
A percentage is BS though.
If Apple uses the same exact modem on a $400 iPhone SE than on a $1600 maxed out iPhone Pro Max, why should iPhone charge 4X?
Marcos,
Indeed. Why should Apple take 30% of my app sales and not a fixed fee for review and hosting?
Chris,
Because your program is using more of the operating system, Apple’s APIs, and hardware than cheaper apps?
> Because your program is using more of the operating system, Apple’s APIs, and hardware than cheaper apps?
I’m confused by this. An iPhone is made of lots of components which Apple sources from various manufacturers. Software relies on hardware and hardware is essentially useless without software running on it. At what point in the supply chain of hardware/software partners is it okay for one partner to demand from another a percentage of the other’s revenue? If there is an essential hardware component in an iPhone Apple isn’t capable of manufacturing on their own, how is it different for the manufacturer of that component to demand a percentage of revenue for every sale than it is for Apple to demand a percentage of every Spotify subscription registered on an iPhone?
Whenever two companies enter a deal, they can agree on whatever they want.
But (as we have seen numerous times through history) when one side becomes too dominant they will make outlandish demands and hamper competition by creating virtual barriers.
That's why it's a good idea to regulate markets.
>Whenever two companies enter a deal, they can agree on whatever they want.
Yes of course. To the people who think it's inappropriate for another company to try to get a percentage of Apple's sales, I'm curious of their logic given how Apple conducts business. I was trying to allude to that curiosity in my previous comment.
I thick the funny thing with this post, and the article it references, is that Apple became miffed that another company used their market dominance to demand a high rent.
Because that is apples for business model.
Pots and kettles.
