Apple Allegedly 'Plotted' To Hurt Qualcomm Years Before It Sued the Company (cnet.com) 64
Apple allegedly wanted to hurt Qualcomm before it ever filed suit against the company, according to documents obtained by Qualcomm as the two companies prepared to meet in court. CNET reports on what has been made public: In September 2014, a document from Apple titled "QCOM - Future scenarios" detailed ways the company could exert pressure on Qualcomm, including by working with Intel on 4G modems for the iPhone. Apple and its manufacturing partners didn't actually file suit against Qualcomm until more than two years later. A second page of that document, titled "QCM - Options and recommendations (2/2)" revealed that Apple considered it "beneficial to wait to provoke a patent fight until after the end of 2016," when its contracts with Qualcomm would expire. "They were plotting it for two years," Qualcomm attorney Evan Chesler, of the firm Cravath, Swaine & Moore, said during his opening arguments last week. "It was all planned in advance. Every bit of it."
The unknown Apple team behind the September 2014 document recommended applying "commercial pressure against Qualcomm" by switching to Intel modems in iPhones. Apple ultimately started using Intel modems in about half of its iPhones with devices that came out in 2016. In the US, it embedded Intel modems in AT&T and T-Mobile models of the iPhone 7 and 7 Plus, but it still used Qualcomm in versions for Verizon and Sprint. Qualcomm, for its part, knew by June 2014 about Apple's plans to use Intel chips in 2016, according to an internal email from its president, Cristiano Amon, that was displayed during opening arguments. "Decision already has been made and beyond the point of no return on the 2nd source (Intel) for the 2016 premium tier," Amon wrote to CEO Steve Mollenkopf, CTO Jim Thompson, General Counsel Don Rosenberg and then-licensing chief Derek Aberle.
Apple "said that as a result of our policies, other chip companies can't compete with us," Chesler said during his opening arguments. "Where did Intel get the chips from? From god? They made them using our technology." Another Apple internal document from June 2016 said the company wanted to "create leverage by building pressure three ways," according to a slide shown in court. The internal document said, in part, that Apple wanted to "hurt Qualcomm financially" and "put Qualcomm's business model at risk."
The unknown Apple team behind the September 2014 document recommended applying "commercial pressure against Qualcomm" by switching to Intel modems in iPhones. Apple ultimately started using Intel modems in about half of its iPhones with devices that came out in 2016. In the US, it embedded Intel modems in AT&T and T-Mobile models of the iPhone 7 and 7 Plus, but it still used Qualcomm in versions for Verizon and Sprint. Qualcomm, for its part, knew by June 2014 about Apple's plans to use Intel chips in 2016, according to an internal email from its president, Cristiano Amon, that was displayed during opening arguments. "Decision already has been made and beyond the point of no return on the 2nd source (Intel) for the 2016 premium tier," Amon wrote to CEO Steve Mollenkopf, CTO Jim Thompson, General Counsel Don Rosenberg and then-licensing chief Derek Aberle.
Apple "said that as a result of our policies, other chip companies can't compete with us," Chesler said during his opening arguments. "Where did Intel get the chips from? From god? They made them using our technology." Another Apple internal document from June 2016 said the company wanted to "create leverage by building pressure three ways," according to a slide shown in court. The internal document said, in part, that Apple wanted to "hurt Qualcomm financially" and "put Qualcomm's business model at risk."
Business Model (Score:3)
"put Qualcomm's business model at risk."
If your business model consists of primarily selling one thing to one customer, you need a new business model.
Re:Business Model (Score:5, Insightful)
Apple's likely stance: we need to keep the costs down and we'll use whatever strategy suits that goal of profitability.
Qualcomm's likely stance: we have the patent portfolio, and we're you're single source, so pay up or face the lawsuit music.
Result: Business as usual, Apple caves, Intel packs it in, iPhones go up five more percent during a period when sales are down. Qualcomm gets kissed by Wall St, so does Apple, lawyers get paid, not one in ten thousand people using an iPhone know or care the difference.
Bottom line: nothing to see here, just business warring with each other as kingdoms have done for millennia.
Re: (Score:2)
If you work on Wall St, then you know that stock price is key to Apple and Qualcomm, rather than dividends. If you bought a 100 shares of either at their 2012 prices, you'd be rich.
As a consumer, I like Samsung's quality (current folding phone snafus aside). Otherwise, they have their own problems, viz: https://arstechnica.com/tech-p... [arstechnica.com]
Re: (Score:1)
You mean, if he bought 100 shares in 2012 and no longer owned them, he'd be rich.
Re: (Score:2)
Uh, what? In neither case would you be rich now, if you weren't rich before. QCOM is up about 90% over that time. Apple's up more, over 200%. But the general market (SPY) is also up over 100%.
Re: (Score:3)
Especially if it's plotters. Who uses those anymore?
Re: (Score:2)
Depends on the time scale used. If you only need to draw a line every month, it would fit on a regular letter-sized page.
Re:Bad Monopolies. (Score:4, Informative)
The FRAND cost shouldn't be a fraction of the sale price of each unit using the technology. Or are car companies really paying a percentage of the sale price of their internet-connected vehicles?
And? (Score:2)
What's the story here? This all reads like normal business strategy making of a corporate behemoth to get their way. If this surprises you then you haven't been paying attention.
Business strategy == Evil? (Score:2)
I'm not sure what's more embarrassing here, the lawyers attempt to show up Apple as evil, or CNET just buying a press release as any kind of reportable news.
Preparation (Score:2)
It looks to me that Apple prepared for two years before taking QCom to court. What’s so special about that?
Re: (Score:2)
Companies are supposed to show a certain level of trust and play nice with each other, not doing so can actually get them in legal trouble.
Second is hiding potential patent issues and not acting on them until you can really screw over the other company. Without that, it would get really bloody out there.
Re: (Score:2)
Nothing.
But slashdot loves to bash Apple, even if it means defending the Oracle of wireless.
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Yes, because why pay for a CDMA modem in a phone that is locked to a non-CDMA network?
Why is this in any way news? (Score:2)
Unless you have a plan regarding how to apply presssure on any competitor and supplier you are dealing with when needed, you donâ(TM)t get to stay being a large company. Why is this, in any way, news?
Re: Why is this in any way news? (Score:1)
Sitting on a patent suit until it suits you might wind up having your case thrown out
Re: Why is this in any way news? (Score:2)
Large companies routinely ignore smaller ones until they perceive them as a threat, before deciding to spend resources on patent litigation. I have never heard of a patent lawsuit being thrown out for that.
Furthermore, waiting until you are no longer dependent on a supplier before suing them isn't malicious in the least.
Re: (Score:2)
Or, it was a legal strategy of collecting all relevant documentation and evidence prior to filing suit at a time of their choosing.
Basically like every other civil action, ever.
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Unless you have a plan regarding how to apply presssure on any competitor and supplier you are dealing with when needed
I don't think you understand how supplier relationships work.
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Re: (Score:3)
Qualcomm has a reputation within the industry that's, perhaps, 1% better than Oracle's.
So what? Among those who don't drink the rainbow apple kool-aid, but who do follow tech news, Apple has a bad reputation — for creating defective products and then blaming the user. B&W G3 data corruption, solution, buy hardware with an Apple tax on the ROMS or buy FWB toolkit and use it to slow down your storage device! Phone won't get signal, you're holding it wrong! iPads come pre-bent, it's minor and nothing to worry about! Keyboard stops working correctly, well it's your fault that you let a
Re: (Score:2)
Ha! (Score:2)
Instead, this debacle led to one of the biggest single day gains in Qualcomm's stock price. Good work, Apple.
Apple is confused because they only patent stupid shit that doesn't hold up in court. They failed to realize what real patents are for.
Re: Ha! (Score:1)