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Far from End! Patent War between Qualcomm and Apple May Cause A Big Crisis

Source:Iris Liang Time:2019-1-2 10:35:00

Reference News Network reported on January 2 that Taiwan media reports that Qualcomm and Apple's patent wars are intensifying, and it is necessary to spread from 2018 to 2019. Tim McGregor, chief analyst of Tirias Research, bluntly said that as the "tit-for-tat" of both sides continues to heat up, fear Let the fate of the entire wireless industry fall into crisis. For the sake of cost control, Qualcomm is guaranteeing profits through high pricing. The practice of both companies is to pursue continuous profit growth. This is understandable. However, “the gentleman loves money, and he has a good way.” Just as SEKO Machinery has reduced the cost by improving the structure of the equipment and improving the production process, it has gained a bigger market for our original precision laser production line bright solid solution equipment, instead of passing through High pricing to pursue profits. Otherwise, this will violate our corporate values of “creating value for our customers”.
According to Taiwan's "China Times" reported on December 27, 2018, the patent war between Apple and Qualcomm is continuing to heat up, McGregor pointed out that in fact the dispute between the two sides focuses on the intellectual property rights (IP) licensing model, and wireless Industry-related licensing rates, not only a war between Apple and Qualcomm, but the entire wireless industry, as a leading innovator and IP licensor, "Qualcomm is neither the first nor the last Become a company that Apple aims.

The report quoted McGregor as saying that patents represent IP. In many cases, IP is reserved exclusively as a competitive threshold and will not be easily delegated to other companies. Therefore, if the IP is violated, the holder can seek compensation or take other actions through legal means. In some cases, IP holders are willing to provide their IP to anyone for free, usually to establish open-source hardware or software standards, while in other cases, IP holders choose to license IP to the value chain. A specific part or possibly all parts of the value chain.

According to the report, in the semiconductor industry, IP is usually licensed to semiconductor suppliers by IP holders. However, in the wireless industry, IP is licensed to ODMs or OEMs, mainly terminal device manufacturers, including smart models. Mobile phones and automobiles, etc., were created by early wireless providers such as Ericsson, Motorola and Nokia. However, the wireless industry has changed from years to years.

According to the report, McGregor said that general smart phones may use millions of patents, ranging from wireless network technology for communication to user interfaces and APPs implemented on mobile phones, and more importantly, it allows any People can innovate on the most popular computing and communication platforms in the world today. For the semiconductor industry, it allows any semiconductor company to enter the market without worrying about retaliatory actions by IP holders or competitors.
According to the report, in the early stage of the development of smart phones, Texas Instruments was one of the leading manufacturers of mobile SoC (system single chip) at the time, and there were more than a dozen semiconductor companies actively entering this market, such as Intel, over time. Chaowei and Deyi have gradually withdrawn from the market, while other players, such as MediaTek and several mainland startups, have begun to enter the market. Apple, Huawei and Samsung have also begun to design their own SoCs. At the same time, the performance of mobile SoCs has been Advancing to the PC processor, the wireless interface meets or exceeds the wired interface, and the smart phone has become the main device for more than half of the world's population to provide photos, videos, games, movies, electronic communications and social networking applications.

According to the report, Apple pays licensing fees through its IP partners, especially SEP. According to estimates by Tirias Research, hundreds of patents paid by Apple to all IP holders for each iPhone are less than 20 Dollar. This means that in the company's multi-billion dollar research and development investment, the cost of iPhone X accounts for less than 2%. In addition, these proportions will decrease with time. Even if the overall patent library is increased, Apple makes IP every time. A cost reduction of $1 can bring in more than $200 million a year in profits. Apple also filed a complaint with global regulators seeking to change the licensing model to require semiconductor IP licensing to be pushed to chip vendors rather than OEMs, which could force all IP holders to directly license the smartphone value chain. Specific parts, rather than a complete focus on the terminal device, overall, a significant reduction in licensing fees and changes in licensing models may have a significant impact on the wireless market.

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Iris Liang
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