How Qualcomm shook down the cell phone industry for almost 20 years
arstechnica.com
arstechnica.com
RIM pushed hard to develop its own chip 3G/4G chips because Qualcomm absolutely strangled the company with its licensing cost/terms. They pretty much demanded a separate cellular R&D team (QCT) that duplicates half the effort. All CDMA based phones must contain chips from QCT because Qualcomm holds CDMA patents and they won't license them to anyone. Finally, Qualcomm was, while very technically competent, will give you no assistance whatsoever if you deviate from what they want you to do. Basically 'my way or the highway.'
Edit: As an aside, my heart goes out to Intel's defunct Infineon-based 5G modem team.
Blackberry had a meteroic rise and they collapsed because of iPhone and (later) Android.
There was a fundamental change in phone capability and interaction that really shifted the market, and made new winners and losers.
I wouldn't call RIM / Blackberry a meteroic rise. They start in the mid 90's and built up the products in a pretty smart way with each following the next until the total shift of the Storm.
I still use the well made power adapter (Micro USB) that came with it to charge devices to this day. Kinda sad seeing that blackberry logo and knowing the tablet was horrible.
As an active participant in Playbook's entire development from (near) start to end, there were multiple reasons. They weren't good reasons (most of my colleagues had, eh, concerns which got override,) but they somewhat made sense.
What happened was that multiple teams (internal and external) screwed up, so much so that the thing's internal was completely redesigned half way through development ie. Switched to a completely different SoC .
As another poster noted, their power supplies were great. I still have a couple left around my house. They had to be great partly because of a design oversight....
If they could have taken more time, it might have been better.
But the Playbook product did effectively expose the lack of depth, talent and relevant experience at RIM. I'm ashamed to say.
It would make for a great email + basic usage phone, but not for media consumption. And the camera's not great.
I used a BlackBerry Classic that also ran BB10 until December 2017, and I still pick it up from time to time and wish I could still use it. The Classic is unique in that it has three independent input methods, all of which work super well:
1. Touch screen: the BB10 OS is actually designed for touch, with fluid and intuitive gestures. Swipe up to go home, swipe up and to the right to go to the notifications hub (reverse the gesture to just peek), swipe left to pull off a screen layer to go back, swipe down from the top to view the settings pane (standard place for settings in every app).
2. Optical trackpad and hard nav buttons, just like on old BlackBerries. You can fully control the phone without touching the screen (great for when you're wearing thick gloves during winter). Works super well for a mouse pointer in the browser. The trackpad even works reasonably well in Android apps, which weren't designed for it (presumably, it piggy-backed on the accessibility focus stuff).
3. Hardware keyboard: typing experience is great—not necessarily faster, but super precise, and no pop-up keyboard getting in the way. Every app is designed with keyboard shortcuts in mind, and the OS makes discovery super easy, so stuff like [C]omposing an email, scrolling to the [T]op of the page, or scrolling to the [N]ext page in a PDF are single click operations. Modern BlackBerries also have great keyboards, but since they run Android, they have none of the shortcuts (except app shortcuts).
And it was a super outdated Android runtime that ran like dogshit compared to the native BB10 apps.
Also, if you wanted any sort of Google Play services stuff, you had to have an app on a laptop/desktop to sign all your apk's the same and remove a specific check... and you'd have to do it all over again every time you wanted to update an apk with play services.
Not ideal.
Build quality was very poor. Overall experience was very poor.
She ran back to iPhone as soon as she could.
RIM died because their products were poor compared to the competition, it's as simple as that.
BlackBerry was a small company up against the #1 product of the era (iPhone) and a 'free' competitor. Both companies are basically #1 and #2 brands in the world. They have very deep experience in all things, channels, money etc..
We had no 'mapping team' really, Google had 100 people.
iOS is from MacOS. BB had this ancient thing.
We were just a tiny company that got clobbered, but frankly, BB was culturally more like 'motorola' than an advanced, well run entity. BB could not compete.
RIM started in 1982, not in the 1990's. The 'rise' was quite meteoric when they decided to put email on your hip, and added a phone.
Then the Passport launched, LOVED the format, best format ever squared and large screen, beautifully fitting everywhere though being larger, loved the TOUCH keyboard, loved the unified messaging but had NO F* network connection ever. Just could't be called or call others. A second Passport the same. Then one got dropped and it totally broke internally, the "steel frame" didn't help in any way, I assume it contributed due to its weight and momentum.
Reality is often a bit more nuanced than that.
Patent licensing fees were a big part of the equation, which led to inability to lower costs to compete.
Yes. OP asserted that too. Like OP, you haven't actually given a reason why. Here's some counter-arguments:
1) BB grew exponentially all the while paying Qualcomm licensing fees - why didn't it affect them then?
2) EVERYONE was paying the same licensing fees to Qualcomm. You couldn't build a smartphone connected to the cellular network and not pay those fees. So are you saying that it affected BB more than it affected Apple, Palm, MS, Samsung, etc. ?
As to #1, around BBOS v5 and v6, when they were pretty much top dog, all the cellphone accounts that wants to use a BB pays a service-access fee, or a BlackBerry Tax that goes to the company. Enterprise companies that want their emails and everything else also pays for the BlackBerry Enterprise Server. They were practically the only game in town.
They didn't have problem then, because they were rolling in cash; just like how they didn't have a problem basically buying up Philips st expanding, or keep coming up with phone models even though there's no way that there's enough demand to actually absorb the production.
#2 on top of needing to deal with Qualcomm licensing fees, which often applied (as the article stated) on non-qualcomm phones, they basically freaked out after losing that lawsuit to the patent troll, so they end up overpaying for licenses (not sure who's the licenser in this case) to avoid getting hit with more patent trolls. The contracts for those licenses were quite hard to get out of. By the time they were making the BlackBerry Priv, they don't have the SAF to juice their income. Patent licensing, Qualcomm and others, were disproportionally high, compared to other Android providers. They can't renegotiate some of them due to the contract wording. Being 1% of the market means Qualcomm hardly cared to give support, because Qualcomm is far more likely to help Samsung and other android phone, that pushed out far more numbers than BlackBerry did at the end.
It ends up being that they end up licensing their brand, because had they manufactured their own phone, they'd have to deal with the patent licensing contracts that they can't get out from.
There's probably a reason why OP won't be too forthright in describing why. I'll leave that as an exercise to the reader.
They sipped battery and data, and once that gear is setup, the SAF was very profitable.
Even to this day, email is not the same level of instant.
So everyone there is hoping that Apple buys them out.
Selling toast isn't easy when you let the customer borrow your bread and butter.
To put it another way, Apple took their ball and went home. No soup for them!
FYI - IBM handed Microsoft and Intel a big chunk of market share because who would ever want a personal computer...
I believe it was because they needed a PC in a hurry. I have heard that Ken Olsen ridiculed the IBM PC for its crude design, but it was the beginning of the end for DEC.
That's a much better explanation. They made the entire thing in a year, and 90% of it was made by outside vendors. I think both of these things, long-term, contributed to its success.
I thought chip-makers weren't required to license QCOM's patents -- QCOM like all other wireless SEP holders only collect licenses at system-level.
Here is the thing. If Apple sold a 2G network based iPhone with a non Qualcomm IP modem, and a 4G iPhone at 2x the price with a Qualcomm modem, which one would make more money for Apple?
Sure, without QCOM's IP, other non-wireless parts of the phone won't add/contribute as much value or drive market demand for the phone.
Consider the 64 GB iPhone XS selling for $1000 vs the 512 GB one for $1349. Is Qualcomm adding any extra value to the second phone as compared to the first one? Obviously not, so why should they capture any of the extra purchase price?
Free market pricing is based on demand of the feature not the cost to make it. Qualcomm should be pricing the part at the point where the phone without the qualcomm part is equal value per dollar.
This is the problem with mandatory standards and patents that cover those standards.
Standards require all participants to license at a FRAND rate. If apple developed 5G IP they would have effectively received a rebate based on the relative impact of their contribution.
Qualcomm actually has great execution. You realize 5G is going to put a 1 gigabit network in the palm of your hand? I can’t even get that out of cable.
Clearly you didn’t read the article. There’s an entire section about Qualcomm not issuing FRAND licenses.
In the ideal world the phone would be like a PC, and you could buy an iPod touch from apple and swap in the qualcomm 5g modem or the intel one.
Apple pays qcom $14 bucks for the modem. In the PC world I think qualcomm would be able to price theirs closer to 50 compared to intels.
Qcom charges Apple $14 bucks for the modem. That doesn't sound crippling or unfair or unreasonable. I think if consumers had the option to buy an ipod touch for 500, then add the modem like you do with a PC no one would be buying a fully integrated device from Apple for 1000.
I worked at Qualcomm, so take this with a grain of salt. But I find it laughable that Apple is complaining when they can sell the exact same thing at 2x the price by just adding a $14 dollar qualcomm modem.
For the industry at large it was $500 (now $400) [1]
https://fudzilla.com/news/mobile/47691-apple-qualcomm-licens... [0]
https://www.reuters.com/article/uk-qualcomm-licensing/qualco... [1]
Sure, first, QCOM licensing fee only applies to the first $400, which is in turn also based on the wholesale, not retail, price from Apple's contract manufacturers.
second, without QCOM, Apple wouldn't be able to price the iPhone XS at $1000 (or the iPhone 7 at $550), much less sell nearly as many units. Would you even consider paying $550 for the 128GB iPod Touch, which is essentially at feature parity with the iPhone 7, but without QCOM's IP?
Sure, QCOM is not a marketing/consumer electronic company they way Apple is. Your 99% of consumers buy the iPhones over the iPod because of QCOM's wireless functionality, not because of their branding.
And how many of those 99% of consumers do you think would pay $1000 for a OLED iPhone XS without QCOM's patented wireless features that allow to make phones call or data? Or how many would pay half the price? or even a third? The iPhone 7 without OLED, the most popular selling iPhone in many countries, still costs at least twice as much as comparable iPod Touch and sells multiples of the unit sales of the iPod touch.
Their business model existed largely via the mismatch between cellphone companies and wireless carriers.
Free market pricing is based on demand of the feature not the cost to make it. Qualcomm should be pricing the part at the point where the phone without the qualcomm part is equal value per dollar.
Apple is sitting on 200b in cash. What would be great for consumers if they spent some of their cash on 6g networks before they turn into a sovereign wealth fund.
Anyway, such verticals integration is unlikely to be good for consumers.
And if it wasn't a percentage, it will be a fixed price for everyone, while it may sound fair, all of a sudden everyone selling a phone would be paying in total ~$50 to Patents license. That might not matter to higher end phones, for the lower spectrum that is a huge increase in Total Cost.
That entirely depends on what Qualcomm was charging RIM's competitors.
But if you need to give Qualcomm money for the 9000 Bold (in house stack, no qualcomm at all, GSM, and sold around the world), because you need to license it to buy the modem for the 9670 Bold (CDMA, sold in select market, and CDMA use was minimal elsewhere), then out of the 99 problems you've got, Qualcomm is one of them.
RIM sold more 9000 than 9670. In its heyday, the GSM stuff is everywhere, but needed to keep the CDMA for NA and a half-hearted attempt to enter China.
Samsung should start selling 5G modems in NA as well. I know this stuff isn't going to work in the short term, but this is the sort of choices we need.
https://www.semiaccurate.com/2019/04/16/qualcomm-just-beat-a...
https://www.semiaccurate.com/2019/04/18/why-did-intel-kill-o...
So please, please, stop bringing up SemiAccurate on HN.
And 4th, 10nm is not dead, Intel is not skipping it for 7nm. Nokia is not dead either. And it doesn't matter how anyone spin it, SemiAccruate is like tabloid of Tech Report, and to ensure the quality of news I personally believe it should serve no role on HN.
They could have formed a joint venture with other manufacturers to split the development costs.
And that was just the start. Fantastic article. Qualcomm, man, just evil business practices that worked for a decade and may continue depending on appeals.
This is one big piece of that puzzle. I'd still kill to have a vertical slider for a phone...
First and foremost: when you are as big as Qualcomm and Apple are in their respective spheres, you don't need rights. You have POWER, which is far, far better, especially when you can use it to extract money to buy more power with.
Rights are for little people. Qualcomm has been at this for decades. How long can you get away with just parking your car in the wrong place?
Second, when you talk about abuse of monopoly power, it makes no sense to look at it from the standpoint of the monopolist. Everything is stacked in their favor. The important question is, what can the little guy do? Not other companies, even though they complain most effectively (like Apple or Intel complaining about Qualcomm), or even small ones that can't. They would all love to be monopolies too, and sometimes are. What matters is, what is the experience of somebody who got an iPhone for her quinceaña, or of the farmer stuck with a busted John Deere tractor?
Each is obliged to pay a huge premium -- for software, or repairs -- because the 400-pound gorilla can force the matter. The fact that somebody else has an Android phone or an IH tractor doesn't help either of them. Each is stuck with what Apple or Deere is willing to let them have.
The law doesn't need to define a monopoly: only a monopoly can exercise monopoly power, so it suffices to look for that happening. Any monopoly not visibly abusing its monopoly power has nothing to worry about, because nobody can tell.
Anti-trust law doesn't make it illegal to have a monopoly. It just says that if you choose to make one -- and every monopoly chose it -- different rules apply. The law defines lots of rules, but the DOJ has chosen to ignore almost all because of a lately fashionable notion promoted by Chicago-school economists that nothing matters except high prices. Under the law there is a hell of a lot of monopoly abuse nobody at DOJ will even look at, that have all kinds of deleterious results. Anybody who wants to do anything about any of it gets mobbed by defenders of monopolists' rights.
And that's where we are today. Qualcomm got in trouble by making things unpleasant for other 400-pound gorillas, and we get to watch. Offenses against us are entirely ignored, and now people insist that's normal and right, law or no law.
Meanwhile everybody else is saying that US antitrust law is concerned entirely with consumer harm and not with competition. Although in this case the consumer harm seems to be that a >$750 phone costs ~$20 more than it might otherwise.
A zillion other companies do the same things, and much worse for "consumers", but are less openly greedy toward other big companies, so are ignored.
We need open source 3/4/5G chips, but the R & D cost would be astronomical. If you ever think that TCP/IP is complicated check out the mobile system specs some time! They span 1000s of pages... It's amazing to me how much complexity is there. Those phone engineers deserve way more money, IMO.
At the beginning of my corporate career I was working on implementing LTE layer1 (PHY) in internal testing tool. It sometimes took us weeks to understand a single page from the specification - those were fun times ;)
In particular, serie 36 is for the LTE RAN (radio access network) while series 38 is for the NR (~5G) RAN. But other series are relevant, for the core and services parts among (many) other things.
All the specs are publicly accessible, and also the change requests (CR) submitted for discussion at the standardization meetings, as well as the minutes. From a spec page you can get to its history and the related CRs. Now of course, there are side discussions but the process is still very open in practice. But it's really huge, don't really expect to make sense of it with a little casual looking around. It takes some real time investment and commitment.
Another point to keep in mind: the cellular industry has one of the most demanding certification process for consumer grade devices. And operators often add on top of this. You don't want buggy devices messing up a shared medium, particularly when it's a scarce resource in many places (high density urban area at peak time). If designing a cellular modem is hard, making it go successfully through certification and also work well in the field and pass the tiers 1 operators field trials (drive tests in particularly harsh locations) and interoperability tests is even harder.
A lot of people miss this part. It takes millions in test equipment just to get ready to enter certification, and that's not the main cost. Even if it's painful, it's also important to make sure things work reasonably well in such complex, multi-parties systems. Which is why certification is legally required to operate in many places (e.g.: Europe requires GCF certification). There are open implementation of LTE, but none certified and legally usable in the field because of this.
In addition, while I have no love lost for Qualcomm, what you do have to remember is that CDMA was a "bet the farm" moment. If CDMA could be delivered, it was significantly better than what existed at the time.
However, there was no promise that a power amplifier could be delivered with the specifications demanded by CDMA--Qualcomm bet that they could. Rockwell had a worldwide monopoly on CDMA power amplifiers for years because they were delivering that amp, and the yield was abysmal.
The original Qualcomm stuff was a significant engineering achievement, and, while they probably don't deserve to continue to abuse their position at this point, they certainly deserved some time to profit from their work.
Update: fixed up my wording.
However, unless the terms of service of any of those approaches penalized me for buying a meal at Burger King, then we aren't quite at the same level of scrutiny as opposed to what was reported to have happened in this article.
You basically couldn't buy MP3 encoding hardware because nobody could negotiate a rate that didn't suck.
Nit: abysmal means very great/limitless... I suspect you meant dismal here.
"abysmal" can mean very great or limitless DOWNWARD (a la "abyssal")--but that's a secondary definition.
However, the primary definition appears to be: "immeasurably low or wretched : extremely poor or bad"--which is the sense in which I used the word.
abysmal
adj 1: very great; limitless; "abysmal misery"; "abysmal
stupidity"
2: resembling an abyss in depth; so deep as to be unmeasurable;
"the abyssal depths of the ocean" [syn: {abysmal}, {abyssal},
{unfathomable}]adjective
1. extremely bad; appalling.
"the quality of her work is abysmal"
synonyms: very bad, dreadful, awful, terrible, frightful, atrocious, disgraceful, deplorable, shameful, woeful, hopeless, lamentable, laughable, substandard, poor, inadequate, inferior, unsatisfactoryI was going to say "part of the blame" but it was Qualcomm's choice to take advantage of this. Rambus is another bad guy in this regard.
What Apple thinks would be fair for Qualcomm chip license fees would also be reasonable for App Store fees.
They mean everything. Every thin dime spent anywhere you care to spend it. There really exists nothing else quite like Qualcomm around out there. We tend to throw the monopoly word around so loosely that we start to equate things like Apple and Qualcomm. It really does make it difficult to try to generate support to dig out from under abusive companies like Qualcomm when they have an army of people out there advancing the narrative that they are no different than any other company.
Meanwhile real engineers are losing their livelihoods by the thousands when companies succumb to the Qualcomm chokehold. Then a lot of those engineers have to go work for Qualcomm. Etc etc, on and on. It's sad.
Wait. What are you talking about? They own a platform, others want to use that platform to make money, so Apple is charging fees to use their platform. Where is the monopoly part? Developers have other avenues to sell their software on (Android)
iOS and Android can be classified as a Duopoly though.
A cartel is when a small number of homogenous companies share the market while ostensibly competing with each other, but coöperate to erect barriers to anyone else getting into the market.
If Apple and Google block other companies from getting into the mobile device business, they would be a cartel.
https://www.newyorker.com/culture/culture-desk/the-curse-of-...
The "æ" is a whole nother thing.
I've always liked typography and graphic design, and I enjoy anachronisms like ligatures, alternate letterforms, drop capitals, visual justification, latin phrases, and so on ad nauseum.
I am particularly fond of the looped st and sc ligatures.
You pay Qualcomm a lot of money just to get access to the modems, but they'll ignore you for bug fixes, firmware, etc...
The word Qualcomm drop (update in the Qualcomm code) sent a shiver down my spine. They'd fix one bug and introduce two others, that is if the bug big enough that they couldn't simply ignore you in the first place.
I have concerns that, even as full device encryption has evolved and many of us have moved communication to more secure media (Signal, Riot, etc), the very baseband chip of the phone is still acting like a bug in our homes.
What is your evidence of such claim?
And in any case, my comment is not about prices, but about security.
There has been no evidence as such. Even in court.
I know a lot of people hate Qualcomm, but reading the 230 pages of the report I cant help but felt sorry for them.
They had a special opportunity to take a lead role in protecting the American public from being victimized by criminal behavior within the NSA and they chose to side with the criminals instead of the victims.
What's to feel sorry for?
And where is that from?
They had an opportunity in June 2013 to say, "we're aware of the former intelligence chief James Clapper's acknowledgement that his March 2013 testimony to the United States Senate Select Committee on Intelligence was erroneous ; we are taking every action possible to thwart efforts by the NSA to collect information about our users as described in his recent letter and as disclosed last month by Edward Snowden."
At a time when many people (including some members of Congress) were hoping that Clapper was going to be prosecuted for perjury and the entire regime of illegal spying was going to be provable undone, Qualcomm, a potentially huge contributor to safety of the public, did and said nearly nothing.
Note there are five ftc commissioners. Christine Wilson is one of three republicans. She is unfortunately the one who seems the most trumpian. She misleadingly quotes a filing her own agency made in this op-ed. Because of that, and a few other turns of phrase in here that appear frequently in Qualcomm PR (such as the factually incorrect statement that this case was filed during the Obama administration--it was actually filed under Trump) I'm willing to bet a lot of money Qualcomm wrote this and gave it to her and she signed off on it.
https://www.ftc.gov/enforcement/cases-proceedings/commission...
Does anyone know why this is the case?
And in defence of Qualcomm, I would post a few links from people that had the same thought as I did. [1] Is the Qualcomm information, I think it provides a angle just how much Qualcomm has spent on R&D. While I don't normally consider Cnet as Quality source of news, Shara Tibken [2] has been following the Apple and Qualcomm Trial and has been in the court for every trial between the two, reporting on the "exact" wordings some of these people gave in court. There were lots of details, and Qualcomm clearly has some very decent explanation in every accusation against them. And somehow none of these made it into many other mainstream media.
Patrick Moorhead wrote about this [4][5] and I agree with him on every thing ( Apart from the US politics which I am not well versed in ). Things Such as the "common interest agreement” Apple has with the FTC, and Huawei's involvement. Along with completely ignoring the defendant's testimony. It really opens my eyes as to how US law system works compared to UK or Germany.
And I would just like to remind everyone, Hating Qualcomm, Qualcomm doing wrong, and Qualcomm is a monopoly are 3 different things.
[1] https://www.qualcomm.com/ftc
[2] https://twitter.com/sharatibken
[3] https://www.forbes.com/sites/patrickmoorhead/2019/05/28/ftc-...
[4]https://www.forbes.com/sites/patrickmoorhead/2019/03/31/the-...
In general, at this point, I'd love to see the entire patent system dismantled rather than keep what we have.
I would expect making CPUs and GPUs to be a lot more difficult than modems, no?
Seems strange, given that plenty of manufacturers are making the radios on the other side of the cellular connection. Can't, say, Ericsson take the radios in their cell towers or picocells, redo their tape-outs for phone scale, and end up with a workable mobile radio?
I suspect those high-power radios are not doing the majority of the RF in silicon.
Workable maybe but not power efficient, which is crucial in mobile. That takes years to figure out and is the reason why ARM is so utterly dominant on mobile - there simply is not any Intel x86 offering even close to the power envelope of ARM, even after years of ARM dominance Intel hasn't managed to get anything meaningful.
And (3), this would add complexity, because, even though one is much simpler, now you need two completely separate decoding pipelines and mechanisms for switching between them.
https://www.usenix.org/system/files/conference/cooldc16/cool...
That’s not nothing but usually when people talk about this the rhetoric assume it’s much greater and that e.g. ARM doesn’t have similar issues supporting its older instructions, albeit at smaller scale. If you look at the results, and a couple decades where everyone else was struggling to match X86 on either performance or non-embedded power efficiency, it clearly wasn’t holding them back that much. Even Intel’s huge moon-shot clean architecture failed to outperform despite starting with considerable experience and no legacy baggage.
As to your specific example, ARM has instructions which do complex operations as well. Does that mean it’s not a RISC CPU, or just that some engineers made a pragmatic decision to support things which are done heavily like AES or SHA?
I think it’s still mostly accurate, CISC/RISC is about public API i.e. instruction set. What’s inside a core is implementation details, very interesting ones and can be important for performance, but still.
> ARM has instructions which do complex operations as well
True, but I don’t think they combine these complex math operations with RAM access, in a single instruction?
Sun RISC of the same era, 84W TDP: https://en.wikipedia.org/wiki/UltraSPARC_T2
Apple holds an ARM architecture license (https://en.wikipedia.org/wiki/ARM_architecture#Architectural...) and to this day the Apple CPUs are ARM (https://en.wikipedia.org/wiki/Apple_A12X).
Apple designs processors that implement the arm64 instruction set. They do NOT use processors designed by ARM (the company).
They are very close. Intel has many x86 chips consuming 3-4W: https://en.wikipedia.org/wiki/List_of_Intel_Core_M_microproc... Some older Atoms were under 1W.
> the reason why ARM is so utterly dominant on mobile
The economy. When you sell complex chips for $10, you have to sell a lot of them to return R&D costs. That's why they shut down cheap Atoms introducing Core M series: technically the two are close in many respects, but Atoms were sold for $10-20, core M's for $200-300.
Generally speaking, no.
Sometimes in the base stations, you'll find FPGA and such, which are super expensive.
The even bigger issue is that you're implementing the other side of the over-the-air protocol, and a whole bunch more stuff too (signaling in the carrier's network). Whereas the modem in a phone is designed to talk to just a single system.
Also, the protocols are designed to be asymmetric. The cell station is fixed, but has relatively unlimited size and power constraints compared to the phone. They also have to talk to multiple phones simultaneously, and manage their access to the network.
Ericsson used to make cellular chips for mobile devices. They decided to leave that industry rather abruptly, leaving us high and dry on one product I worked on.
They can, and they did. Not exactly of course, the two products are fundamentally different, but the organization owns enough IP and good engineers to make a viable product. From a technology standpoint it seems reasonable.
The problem is that the competition is tough and you need to stay on your toes with much more rapid iteration than on the "other leg" where you sell expensive stuff to telcos. And the margins on the consumer side are smaller. So, historically, it has proven very difficult to host the same two "legs" in the same organization. The one with bigger more reliable business tends to push the other out. It's been the same with much of the computer industry too.
https://www.macrumors.com/2019/03/06/apple-san-diego-enginee...
So, "Apple" designing a CPU is technically correct, but its a design team from elsewhere.
Edit: Protomyth below is correct. Apple licenses the architecture from ARM but designs its custom chips.
https://www.marketwatch.com/story/new-arm-designs-help-samsu...
The chips themselves are manufactured by TSMC.
Source: https://en.wikipedia.org/wiki/Apple-designed_processors
Sorry. I forgot which of the ex-DEC design groups got bought when. It's been a while.
A lack of design-for-handoff OF ANY SORT is why Intel failed with 802.16. Qualcomm invented soft handoff which made frequency reuse 3x more efficient, and it made CDMA possible. People are pretty ignorant that due to shadow fading you have to keep 3 or more MACIDs active on different base stations and use high speed feedback control to hand off roughly every 1.6 seconds. I statistically analyzed drive testing logs for 1x-EV-DO at Qualcomm to produce one of the world's first handoff markov models, as part of OFDMA handoff design for Qualcomm.
A lot of practical experimentation goes into cellular system design in the most challenging handOff locales on Earth - San Diego and Hong Kong.
The article points out where QCOM actually violated a contract, though. It's related to FRAND patents [1] - they committed to licensing a certain set of patents this way so they can be included in a standard, something very valuable to Qualcomm, and then later reneged on that commitment. That I can totally side with. But all the other bellyaching about QCOM the big bad monopolist for other reasons is missing the point IMO.
[1] https://en.wikipedia.org/wiki/Reasonable_and_non-discriminat...
Regardless, their behaviour with their own Dev relations is very much like what they're accusing Qualcomm of.
They also refuse to permit their customers to run apps not approved by Apple on the phones they have bought. That's the monopoly.
and they still sign your apps, they just do it automatically, i think.
That’s not a monopoly. That’s them exercising control over their own property.
What’s the rationale to treat Apple’s digital store different than Apple’s physical store?
Apple demands that all web browsing is done via Safari on IOS as I understand it.
[0]https://en.m.wikipedia.org/wiki/United_States_v._Microsoft_C....
End of story.
So I guess if someone can prove AAPL's dominance in "premium" PC, education, or some niche subgroup in PC market, it too can be in trouble.
If Apple used its dominance in some niche subgroup PC market to force buyers to pay a percentage of the total cost of all USB-C devices they buy, including non-Apple devices, to Apple to pay for Apple's patents related to USB-C. And if those buyers were companies like Best Buy that needed to be able to buy Apple devices or else lose access to over half their market. And if Apple refused to sell buyers any devices unless they agreed to those terms. And if Apple promised during standardization of USB-C to offer licenses to said patents on FRAND (fair, reasonable, and non-discriminatory) terms. Then that analogy might hold a little water.
Chrome uses WebKit because Google would rather use a WebKit/JSC engine than a slow Blink/V8 engine - especially since Blink is a WebKit fork.
They can’t stop you from walking over to Burger King.
Luckily, oven technology doesn't really make that business model feasible so GE doesn't try to do it. But I think there are reasons for antitrust authorities to take a careful look at the behavior of companies that do have this kind of power over their customers.
Plus, monopolies aren’t illegal, using them anti-competitively is. So the analogy would be GE buying or putting out of business all the other oven makers, then saying you can only cook GE food in a GE oven.
Not necessarily declared a monopoly yet, but also not declared not one.
https://www.theverge.com/2019/5/13/18617727/apple-v-pepper-a...
The app store paid out $34bn to devs last year, so a very simple and probably naive calculation of 34/.7*.3 tells me they pocketed around ~$14.5bn in revenue from a total of $48.5bn. (source: https://finance.yahoo.com/news/developer-apos-34-billion-ear... )
That really ought to be big enough a pot to warrant my drawing the parallel.
Furthermore,
- They have absolute control and will shut down things whenever they want, such as parental control apps - https://www.macworld.com/article/3391361/apple-privacy-paren... .
- They claim you may install alternative apps, yet you may not set them as default handlers to replace Apple's native ones- https://www.theverge.com/2019/5/29/18644045/apple-defends-ap...
- They're playing hardball with Spotify, who are also using the word "monopoly": https://www.theverge.com/2019/5/6/18530894/apple-music-monop...
Do you think parents were aware of that? Are you okay with that? If you want to control your child’s phone, you are free to use MDM software where you control provisioning and the profiles.
Apple says nobody can run apps on their phone without handing them a 30% cut. No side-loading, no other stores, nothing. There is very obviously a market for apps that Apple controls completely. Just because there are other app stores for other phones does not mean Apple doesn't have control over the entire market for iPhone apps. Markets can be narrowly defined in anti-trust law. Apple is fleecing iPhone users for that 30%.
I don't think there's a good parallel case for this. DRM'd Keurig cups are the closest thing I could think of, but that never went to court that I know of. The case will be interesting: can you create a secondary market that you exert total control over? Can I bar anyone else from selling apps for my phone?
Personally, I don't think Apple should be able to do what they are doing and I hope they lose. It would be a win for consumer rights and free market principles.
The judge essentially paused the case for four years while he ruled on a motion (which is ridiculous) so it's been quite slow. But I'm still watching it...
I doubt one has ever been defined as narrowly as a single product. The differences between an iPhone and an Android phone are functionally so minimal as to be irrelevant.
Actually, QCOM's antitrust case is exactly that: QCOM's dominance in one or two particular markets (or product), in this case, the CDMA and "premium" (aka, LTE) modems.
If you define the market to be a single company’s offerings, when there are other companies that make similar products (Android and the Android App Store) then the concept of monopoly has become a tautology.
The problem some people are having goes back to the concept of the walled garden in the first place and general purpose compute devices.
Apple does not have a responsibility to provide general purpose computing smartphones that can run any software you want. If Congress wants to pass a law saying that they do, then fine, but it seems quite to stretch to claim that anti-trust law is designed for that.
False. You can pay for an app/service via the internet (side-pay). The app can be free on the app store. This is what Netflix does. Is it a bit of a hassle? Sure. This is the only part that has an optics problem even though it probably meets any legal thresholds. I do think Apple will get some pressure to make this process easier and that change will happen. Once that is done, there will be even less of an argument here.
From the consumer perspective, if one doesn't like the app store, buy a different brand of phone. There is no monopoly here from a legal or functional perspective.
Has Apple's so called monopoly reduced consumer app selection or pricing? Absolutely not. High quality software has never been more affordable and never has the selection been so incredible. It will be rather easy for Apple to argue that the app store is a net positive for consumers.
For the vast number of non HN users, the app store is a huge win. The whole morass of app selection, installation, update, and developer trust has been solved by the app store. If you are looking for harm to anyone other than the minuscule number of users that care about side loading, it just isn't there. Has everyone forgotten what software purchase, installation, and maintenance looked like a decade ago? What a mess. Fleecing is not the right word for something that has made consumers lives simpler in so many ways.
Some readers of HN might not like Apple's approach, but that doesn't make it illegal. There is just not a way to show substantial (any) harm to consumers. As I said, I think they will probably improve the side-pay options to improve their PR optics and that will be end of it.
That is not how monopolies are defined. Apple says all apps for the iPhone must be signed by them and they must collect 30% of sales and in-app-purchases. The fact that they run an "App Store" means there is a market for iPhone apps. They control the market for iPhone apps. I don't know how to make that any clearer. The fact that Android exists does not change anything about the market for iPhone apps.
However, side-pay will be a very interesting defense. I haven't really considered that enough to speak on it.
Also, while it is true that Apple is controlling the marketplace for iOS apps, it does not control the market for smart phone apps in general. There is a good chance that that is sufficient for the courts to find no monopoly. As many of others have pointed out, there are many, many examples of narrowly defined monopolies. With a different definition, there is no monopoly.
Of course, none of us know what the courts and I get your concern. My point is that the simple control of a marketplace (created by Apple) for a specific product is not a sufficient condition for court action. The benefits to consumers could easily outweigh any concerns about control. Time (years) will tell.
Here is an interesting essay on press (public) perception of monopolies vs antitrust laws:
https://www.cato.org/cato-journal/winter-2019/two-systems-be...
I feel like the fact that only Apple makes iOS devices is what's confusing people.
Suppose that Tesla is the only company that makes electric cars and also the only company that has any electric car charging ports. (This is a hypothetical; in practice other companies offer both electric cars and charging ports.)
They don't have a monopoly on cars -- you can go buy a Volkswagen diesel if you like, and "electric cars" isn't necessarily a separate market than "cars" at the time of purchase. But once you have an electric car, they do have a monopoly on charging ports, which is a separate market because you can't run your electric car on petroleum.
This is easier to see if you add another electric car company but not another electric car charging company. So you go buy your Nissan Leaf but you still have to use a Tesla charging port with it. Clearly a monopoly on charging ports. But still the exact same charging port monopoly when they're the only company making electric cars.
You can have a monopoly on iOS app stores even if you're the only company that makes iOS devices. Having fewer competitors in the other market doesn't make you less of a monopoly. Even the fact that they compete there at all -- if Amazon was the only company with an iOS app store, they would have a monopoly on iOS app distribution even if they don't even make iOS devices.
If you start declaring that the market is the specific store or product, then literally every single product and service is a monopoly begging for state intervention. Can I sue Netflix because as the monopoly holder of the Netflix network they refuse to carry my home made videos? Is Spotify abusing their monopoly over Spotify by refusing to carry my karaoke? Should I be able to sue them in order to bend them to my will?
Of course not. That’s patently ridiculous.
A major purpose of brnad marketing is to create such pocket markets.
Aside from being extremely silly, under this formulation Rolls Royce might be a monopoly, it lacks factual backing. There are plenty of android offerings that overlap Apple offerings in price, including the Pixel 3 and most of the Galaxy S10 series. If your point is that someone willing to spend $1k on a smart phone has no other choice other than to buy Apple, the $1k+ Galaxy S10+ would like to have a word with you.
If your point instead is that any brand that builds up a “pocket market” via good products and marketing is an abusive monopoly that just be stopped, then you’re signing up basically every top company in the every market segment for stringent antitrust enforcement, which is so broad a definition as to be useless. You can’t sue Nike as a monopoly because they’ve built up their own fan base and “pocket market”.
Nope. My point to is neither “there are no high priced smart phones” (there are) not “it’s a monopoly” (I have no position on that question). You should be able to tell that because I say nothing similar to either of those anywhere in the post you are responding to.
My point is that the existence of other players in a particular popular framing of what the market is has very little to do with the anti-trust definition of “monopoly”, which has to do with empirical competition (what do consumers move to or from in response to, particularly, price changes), not how markets are popularly described.
> If your point instead is that any brand that builds up a “pocket market” via good products and marketing is an abusive monopoly that just be stopped
Again, no. Building a non-competitive market via branding or other means makes you a monopoly, not necessarily an abusive one. You still have to abuse that monopoly to be an abusive monopoly.
I've had two posts in this thread, both of which take exactly the same position despite your ridiculous misinterpretation in between them; I haven't shifted, slowly or otherwise.
And the definition of market/monopoly is exactly the one used in antitrust law. That may be inconvenient for your desire to argue, but that doesn't change the facts. And I haven't presented any definition of an abusive monopoly, just corrected your claim that a particular definition of monopoly also meant any company that meant it was also an abusive monopoly, noting that “abusive” actually does have meaning.
I feel like Google might disagree.
Every company deserves a “monopoly” on their own product, unless they are a common carrier, a designation which is based on the government enabling them to exist through preferential treatment in the first place.
Apple created the Apple iPhone and they should be allowed to determine its destiny, as long as other companies are also allowed a fair shot to create their own competing devices.
Why?
Obviously hardware third party components without Ford's permission is a well established industry. Nobody questions it, except maybe a few lunatic capitalists like Elon Musk. Even then though, I think people like him keep their head on straight for the most part. They don't do much to facilitate it, but if you started selling compatible hardware components for his cars, I doubt they'd actually consider trying to stop you. (If I'm wrong about that, he's worse than I thought.)
Your supposition is that software components should be a special case, unlike hardware components, where companies have a right to deny anybody else the right to produce components without their permission. I say that's bullshit. They should be legally forbidden from creating products for which third party components can only exist if given permission.
When you go buy a phone, one of the factors you have to decide is "what app store do I want". If you go with Android, you might miss a few apps, but so what ? Most of them are also fungible, just use a similar one.
If it wasn't like that, we could say that Wall Mart is a monopoly because only they sell Great Value branded products.
You're explaining why Tesla doesn't have a charging port monopoly in practice. The hypothetical is that they do. You can't use any other power outlet in the same way that you can't install an Android app on an iPhone.
> When you go buy a phone, one of the factors you have to decide is "what app store do I want".
Which is what creates the app store monopoly. There wouldn't be one if you could make that decision independently, which is the whole point. It's classic tying.
Moreover, the "customer" of the app store is as much the developer as the user, given that they're the ones paying all the fees. But they don't get to choose between platforms any more than Walmart chooses to operate in Florida instead of California, because they have to reach their customers in both regions, not just one or the other.
By contrast, Nike can choose Target instead of Walmart because they both operate in both regions, so they can still reach substantially all of their customers through one store if the other is being unreasonable, since it's much easier for the customer to switch stores for a desired product when that doesn't require switching locations/platforms at the same time.
Those numbers, combined with the fact that a new competitor is arising to take market share away from Apple strongly implies that Apple is not currently behaving in an anticompetitive fashion.
Last checking GM's share price it was barely a composition of their revenue.
Why wouldn't they be? Does someone else compete with them for distributing apps on Uconnect? Can you install Ford Sync apps on your Jeep?
Alpine and Pioneer probably make replacements for Uconnect (iPhone) but it is not even close to the integration I get with my Jeep and Uconnect.
Wow, shocking.
I'm surprised Jobs didn't gather a forum of all the handset makers to work as a cabal against QQcom on the issue.
Apple is struggling to raise prices in everything they do these days. They invented the $1,500 phone. They make phones that more and more cannot be disassembled. They started soldering everything to the motherboards (phones, MacBooks). They now put lock down chips in the phone and the laptop so most of the hardware cannot be swapped out and repaired. They charge $500 to replace the back of a phone when Samsung charges $20. They make defective failure-prone keyboards and keep selling them 3 years after the market began complaining. They took out functionality and raised prices with USB C.
We are actually close to "peak apple" if you think about it for just 10 seconds. Growth under Tim Cook (mid-2012 to now) has been one third of growth under Steve Jobs (mid 2007-mid 2012).