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In the field of mobile communications, Qualcomm is a well-deserved hegemon.
It not only occupies the high-end chip market of today’s smartphones, but also continuously obtains high profits from the market through a large patent license.
Its business model of relying on patent-licensed profits has been questioned, and many countries and regions around the world have launched large-scale anti-monopoly investigations.
Although Apple has been using its own A-series processing chips in its products, the modem chip cannot bypass Qualcomm.
The modem (modem) chip is the core part of the whole mobile phone.
It is responsible for handling the analog signals and communications sent by the mobile phone. The mobile phone can answer calls and access the Internet.
In the early days, Apple mainly used the modem chip provided by Infineon.
Since 2011, Apple has used Qualcomm’s modem chip in the iPhone 4s.
The iPhone has long dominated the high-end mobile phone market, with more than 90% of its profits in the global mobile phone space.
In order to seize Apple’s big customer, Qualcomm and Apple signed a secret agreement, giving Apple a high discount to ensure that it only buys Qualcomm products.
At the stage of rapid development of smartphones, the cooperation between Qualcomm and Apple has been very stable.
However, with the gradual saturation of the global smartphone market in recent years, iPhone sales have also declined, and have to rely on continued high pricing to cover up the decline in sales.
The problem arises here. Qualcomm charges a patent license fee for each mobile phone instead of a quota.
Instead, it determines the license fee based on the price of the mobile phone. Usually, the mobile phone manufacturer needs to pay Qualcomm a patent license of about 3.25% of the price of the whole machine. Fees, not only Apple, most mobile phone brands such as Huawei, Samsung, Xiaomi, etc. are required to pay fees.
When Apple continued to raise the price of the iPhone, the patent license fee paid to Qualcomm also rose.
Take the iPhone 7 released in 2017 as an example. The price of the machine is 5388 yuan from the beginning of the release.
Each party needs to pay 175.11 yuan to Qualcomm, and the price will be upgraded to 8699 yuan and the patent fee paid to Qualcomm. Then it became 282.7 yuan.
Apple believes that its average selling price is due to its continuous innovation in mobile phone screens, touch IDs, cameras and other areas.
And these have nothing to do with Qualcomm. “Qualcomm insists on charging patent fees for technologies that are not related to them,” said Apple CEO Cook.
After that, Apple began to try to bypass Qualcomm and choose the modem chip provided by other manufacturers.
In 2017, Apple began using Intel’s modem chip on the iPhone 7 launched in some regions.