'Apple asked Qualcomm $ 1 billion as a condition for collaboration'

Apple would have asked chipmaker Qualcomm a "spur of the day" of $ 1 billion to make Qualcomm the only maker of modem chips for the iPhone.


Apple would have asked chipmaker Qualcomm a "spur of the day" of $ 1 billion to make Qualcomm the only maker of modem chips for the iPhone.

That's what Qualcomm CEO Steve Mollenkopf said in a hearing of the American trade commission FTC, reports Reuters . Apple and Qualcomm have been involved for months in various lawsuits about the use of each other's patents.

Qualcomm would have paid Apple an allowance in 2011 to make the transition from modem chips from the company Infineon to chips from Qualcomm more attractive. Such a payment would not be unusual in the market for smartphone components, the amount of 1 billion dollars though.

To recoup that amount, Qualcomm wanted to become the only modem provider of Apple. The aim was not to remove competitors from the market, Mollenkopf states.

High discounts as a reward for exclusivity

In the end, Apple and Qualcomm would have signed an agreement whereby Apple received a discount on Qualcomm's modems, as long as it did not use chips from other suppliers. Apple was free to do so, but that would reduce the lower price of Qualcomm chips.

According to competition authorities, Qualcomm's discount program was part of a pattern of the company to strengthen its dominance in the field of modem chips, and to exclude competitors such as Intel.

Apple CEO Tony Blevins, responsible for the company's suppliers, also testified to the US trade commission. According to Blevins, Apple always wants to have at least two manufacturers for the components in iPhones, sometimes even six.

'Very, very high discounts' made Qualcomm attractive

Apple planned to build an Intel modem in the iPad Mini 2 in 2013. But because it would then lose the agreement with Qualcomm, the costs would become too high.

"They made it very unattractive for us to use another chip maker," Blevins said about the discount program. "Those discounts were very, very high."

The conflict between Apple and Qualcomm is being fought in different countries. In China, Qualcomm has succeeded in enforcing a sales ban on iPhones. Apple calls that prohibition a pressure to enforce a settlement.

Several iPhone manufacturers are also at odds with Qualcomm. The group demands compensation of a total of 9 million dollars.

REF: https://www.nu.nl/mobiel/5679734/apple-vroeg-qualcomm-1-miljard-dollar-als-voorwaarde-samenwerking.html