Why Is Apple Unwilling to "pay"? "High Tax" Is a Nightmare for Mobile Phone Manufacturers

According to Reuters Beijing time on September 18, apple and Qualcomm will go to court for the second time at the U.S. International Trade Commission (hereinafter referred to as "ITC") from Monday local time. The focus of the debate between the two sides is whether several iPhone models recently released by Apple should be banned in the United States.Apple and Qualcomm have been involved in many legal wars around the world. Apple accused Qualcomm of unfair patent licensing business, while Qualcomm counterclaimed apple of infringing its patent.The trial that began on Monday is the second of two lawsuits filed by Qualcomm against apple in ITC. Qualcomm asked a trade judge to prohibit iPhone models equipped with Intel modem chips from entering the U.S. market.

ITC rarely ruled that the products could not enter the U.S. market. Once ITC ruled that the products infringed Qualcomm's patents, Apple also had enough time to modify the product design and avoid relevant patents. Apple increasingly relied on Intel modem chips. Qualcomm executives disclosed to investors in July that the latest iPhone did not use its chips.In the first lawsuit between apple and Qualcomm, an ITC lawyer suggested that the judge rule that Apple infringed at least one Qualcomm power-saving patent, and some apple phones equipped with Intel chips should be prohibited from entering the U.S. market. However, the lawyer said that iPhone models with 5g technology should be allowed to enter the U.S. market to protect the competition in the 5g chip market.Why is apple unwilling to pay

According to apple, the ASP (average selling price) of the iPhone has been rising, which means that the more expensive Apple's iPhone is, the higher the patent fee charged by Qualcomm. In fact, innovations such as touch ID, display screen or camera components have little to do with Qualcomm.Not only in the United States, Apple also launched lawsuits against Qualcomm in China and the United Kingdom, and received support from Samsung and Intel in May.In fact, the manufacturers say the same. They all think that Qualcomm is using its dominant position in the industry to hinder the development of other manufacturers.

To put it bluntly, on the surface, the appearance of smart phones is diverse, but in addition to brands capable of making their own chips such as apple, Samsung and Huawei, nearly half of the "heart" parts of smart phones in the world are marked with Qualcomm's logo.However, Qualcomm is not only responsible for making mobile phone processors. To be precise, selling chips and patent licensing are one of Qualcomm's main businesses. Mobile phone manufacturers are willing to use Qualcomm's chips and pay attention to CPU performance. On the one hand, it is more because Qualcomm provides an integration solution including baseband.Therefore, even if Apple can produce its own A-Series processors, it does not want to produce integrated baseband. Like most mobile phone manufacturers, apple can only use baseband chips from external suppliers, which were provided by Qualcomm from 2011 to 2015, and apple pays corresponding patent fees.

However, since 2016, Apple has used the communication baseband from Intel in the iPhone 7 distributed by at & T and T-Mobile in the United States for the first time. Although the proportion is not high, according to the statistics of analysts at that time, the number of baseband chips sold by Qualcomm to Apple has decreased from 75-80 million to 45-50 million, which is only half a year.This year, Qualcomm can't even sell one at Apple.Qualcomm tax is a nightmare for mobile phone manufacturers

What is "high tax" The name Qualcomm will be familiar to everyone. Every time a new mobile phone is released, the manufacturer will set aside a period of time to introduce which Qualcomm chip is used for the new machine. In the long run, people will inevitably think that Qualcomm is a chip company. In fact, that's right. However, in addition to the research and development and sales of chips, Qualcomm has another business The revenue accounts for 30% of the total revenue, that is, technology licensing business."Every 3G / 4G mobile phone has our invention". Of course, Qualcomm has enough confidence to say so. It is understood that Qualcomm accounts for almost 90% of the patents on 3G / 4G standards in the world, with nearly 4000 CDMA technology patents.In addition, Qualcomm's patent licensing fee is determined according to the price of the complete mobile phone. That is, the more expensive the mobile phone is sold, the higher the patent licensing fee that mobile phone manufacturers have to pay Qualcomm. This is undoubtedly a greater burden for manufacturers such as apple, which mainly promote the high-price market.

Apple Qualcomm's new hatredQualcomm received antitrust lawsuits from the Fair Trade Commission of Korea and the Federal Trade Commission of the United States in December 2016.Qualcomm believes that apple is the driving force behind the two lawsuits, actively promoting the investigation and litigation of regulatory authorities, which violates the original cooperation agreement. Therefore, Qualcomm decided not to return $1 billion of patent licensing fees to apple.

Apple, which did not receive the patent licensing fee returned by Qualcomm, has launched a number of patent lawsuits against Qualcomm in the United States, China and the United Kingdom in less than three months since January of the next year (2017).Qualcomm, which received a lawsuit from apple, also officially launched a war against apple. In May of the same year, Qualcomm sued Foxconn and other apple foundries to the Federal District Court of the Southern District of California, requesting the court to order Foxconn and other foundries to continue to pay patent licensing fees to Qualcomm and compensate for losses in accordance with the contract.In July, Qualcomm filed a lawsuit against Apple at the U.S. International Trade Commission (ITC), accusing apple of illegally selling iPhones that infringed one or more of Qualcomm's six patents, and requested the U.S. International Trade Commission to investigate Apple's infringement.

In October, Qualcomm launched another lawsuit against apple in China and sought to prohibit apple from manufacturing and selling smartphones in China.Now, it is the second time that apple and Qualcomm have been in court on ITC, and the war seems far from stopping.