It's hard to believe Apple did not look at the BOM from day one as a future internalised profit moment. After all it's what they did with Wolfson chips in the iPod: used them until they understood how to replace them and then dropped them.

Qualcomm is hardly cheap, but per-phone it's also hardly expensive. At one remove, this is a fight between two dogs with no up or downside for me as a consumer because in all likelihood Apple will keep prices high: It's seeking to reduce cost, not price.

If somebody has evidence the cost of Qualcomm IPR has influenced Apple pricing and we can expect a price drop, I'd love to understand it.

Moving upstream, is Apple going to take over the Qualcomm research function and start owning the IPR behind encoding and RF technology?

Wouldn't buying qualcomm have achieved the same outcome? Buying their IPR wholesale instead of retail? Thats what Google did with Motorola: bought the entire box, kept the three pokemon cards it liked (the retained IPR, a small amount), and sold the rest to Lenovo.