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Apple wanted to use Qualcomm chips for 2018 iPhones, but Qualcomm would not sell them



As the FTC's antitrust lawsuit continues against Qualcomm, Apple's Chief Operating Officer Jeff Williams has commented on details about Apple's terms of service with Qualcomm.

There is no live feed of the process, but reporters, including of CNET [Shara Tibken] and of Florian Mueller of FOSS patents participate in and pass on details to what Williams has to say.


Most interestingly, Williams says that despite the ongoing lawsuit between Apple and Qualcomm, Apple wanted to use both Qualcomm and Intel chipsets in the iPhone XS, XS Max and XR. However, Qualcomm did not sell the mods in the end.

"The strategy continued to be two sources in 201

8," Williams said. "We worked with Qualcomm, but in the end they would not support us or sell chips. "

Williams further stated that after Steve Mollenkopf, CEO of Qualcomm, refused to sell Apple's chips, Apple had to contact Intel CEO Brian Krzanich to provide LTE chips for all 2018 iPhones. "We would like to have continued access to Qualcomm's technology," Williams said.
Williams also performed many of Apple's previous interactions with Qualcomm. When Apple had to negotiate an agreement in 2011 to use Qualcomm as a supplier of modems instead of Infineon because Apple needed CDMA-compatible chips, Qualcomm demanded a percentage of the cost of the iPhone.

The two companies eventually negotiated a rebate that lowered the license fee to a total of $ 7.50 per iPhone, even though Apple wanted to pay $ 1.50 per phone. This was 5 percent of the value of the baseband chip ($ 30). However, under this agreement, Apple had to agree to a marketing incentive agreement to speak out against the then popular WiMax standard.

The "incentive incentive agreement" would require Apple to reimburse Qualcomm's discounts if Apple delivers a baseband chip device from a Qualcomm competitor.

When renegotiating contracts in 2013, Qualcomm wanted to increase the $ 7.50 fee by another $ 8 to $ 10, which would cost Apple $ 1 billion a year in licensing fees. To lower that fee, Qualcomm wanted exclusivity, which Apple accepted because it needed Qualcomm's chips.

Apple accepted the deal, which also prevented the company from questioning the fairness of Qualcomm's royalties or inducing others to challenge Qualcomm's licensing terms. This is the position in which Apple has been holding for several years.

With the launch of the iPhone 7, the first iPhone to use Qualcomm and Intel chips, Apple was finally able to diversify, and in January 2017, Qualcomm questioned the licensing terms when it filed its first lawsuit against Qualcomm against Apple.

Apple and many other Qualcomm partners are involved in the Qualcomm lawsuit with the FTC. The FTC suggests that Qualcomm has used anti-competitive tactics to remain the primary supplier of baseband processors for smartphones.

The FTC vs. Qualcomm's survey will take most of January, so we'll probably get more details about Qualcomm's and Apple's business practices.


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