That pricing argument is worthless when you start talking about percentages. 5% of a $500 device is quite a lot while 5% of some $25 IoT device is not very much.
Qualcomm spends around 5.5 Billion every year in R&D or 23% of net sales. For comparison, apple spends a paltry 2.2% of its net sales on R&D. Dry up Qualcomm's net sales and the R&D will dry up too.
All the most crucial wireless patents (the really fundamental ones) have already expired. Why doesn't Apple design another, competing system around Qualcomm's patents and license it for free? The answer is that it takes a decade and tens of Billions of dollars.
Apple has the money, but it's cheaper to work the courts over so they pay less. If Apple were the ones who built 4G, you can be very sure they'd be charging at least as much as Qualcomm.
Remember, Apple thought the look of their iphone was worth $40 per device when suing Samsung, but now they think the actual technology to make it work isn't even worth $10 per device. If Qualcomm were making the same profit margins (relative to R&D) as Apple, they'd have to go from $10 per device to $100.
I'm not a Qualcomm fan (or any big corporation for that matter), but if we were making a list of price gouging companies, I think there are a lot of companies that should be getting fined and regulated (especially Apple) before Qualcomm.
All the most crucial wireless patents have already expired
The 2G patents (that Qualcomm owned 90% of) have expired.. but who uses that anymore?
Qualcomm also owns 13% of the patents used for LTE (which they agreed to license under FRAND terms).. it's those patents they are using to create a monopoly on LTE chips.
First they refuse to license their patents to other manufacturers who want to produce chips.. then they say to handset manufacturers, they won't sell you chips unless you agree to pay a royalty on every handset (even if it does not contain Qualcomm chips).
They own the same percentage of patents as Erickson, but they produce 4x the revenue from IP licensing (+ the revenue from chipset sales).
Edit: if you believe the 13% of LTE patents Qualcomm owns are worth $10... that would be $77 for all of the LTE standard essential patents at the same rate. So we are not far off from your $100 Apple-like price in your post.
Yes one has to wonder why Ericsson and Nokia dont charges more.
But Ericsson and Nokia do charges a lot for their Mobile Carrier Infrastructure and Equipment, where as Qualcomm dont have part in that industry. And one reason why Huawei is winning because Huawei has been offering similar equipment for much cheaper price.
First, Qualcomm chipset also comes with IPs owned by Samsung and a slew of other wireless patent holders who crossed-licensed theirs with Qualcomm. Samsung and LG, along with Qualcomm, are the largest contributors of LTE SEP's and make up the bulk of LTE patents (KFTC likewise found that Qualcomm used its monopolistic position to force them to cross-license their patents for almost nothing in return). So no. Even if you stack everything, it won't be anywhere close to your nonsensical $77.
Second, under ETSI (see section 1.11), Qualcomm has the right to refuse the granting of licenses.
Do you think that just maybe you should stop quoting the ETSI IPR policy as if it defines the legal obligations of patent holders? It doesn’t, and I already pointed out that it doesn’t, and your own references elsewhere point out that it doesn’t.
Please see my reply @danjoc. I don't care much about Apple really. The manufacturing world is pretty hard and penny pinching, the practice of charging for value unrelated to one's IP hurts small manufacturers who can't stand to a QCOM. I really don't mind QCOM charging whatever they want on their modem, to sustain their R&D. But I don't agree on their charging unrelated parts just because they can. Hope this clarifies my previous comment.
Qualcomm spends around 5.5 Billion every year in R&D or 23% of net sales. For comparison, apple spends a paltry 2.2% of its net sales on R&D. Dry up Qualcomm's net sales and the R&D will dry up too.
All the most crucial wireless patents (the really fundamental ones) have already expired. Why doesn't Apple design another, competing system around Qualcomm's patents and license it for free? The answer is that it takes a decade and tens of Billions of dollars.
Apple has the money, but it's cheaper to work the courts over so they pay less. If Apple were the ones who built 4G, you can be very sure they'd be charging at least as much as Qualcomm.
Remember, Apple thought the look of their iphone was worth $40 per device when suing Samsung, but now they think the actual technology to make it work isn't even worth $10 per device. If Qualcomm were making the same profit margins (relative to R&D) as Apple, they'd have to go from $10 per device to $100.
I'm not a Qualcomm fan (or any big corporation for that matter), but if we were making a list of price gouging companies, I think there are a lot of companies that should be getting fined and regulated (especially Apple) before Qualcomm.