What a strange game...
The only winning move is to be a lawyer.
Qualcomm has won a $31m judgment against Apple in the US after the iGiant infringed three of Qualy's mobile phone battery patents – the latest ruling in a long series of intellectual property spats between the two companies. After an eight-day trial, a jury in San Diego, California, decided the iPhone slinger had made use of …
>The only winning move is to be a lawyer.
As a patent attorney I feel left out. Somehow I have not found this fountain of money. Got any juicy references? M&A is traditionally where big money is found since that is about merging two or more money mountains, not so much in patents. If you have sources I'd be interested to hear.
I think they mis-spoke, and should have noted "the only winning move is to be one of the lawyers in this fight", although one wonders if the firms get a cut of the judgement in these cases, or just have the joy of billing an hourly rate (assuming they're not employees of either Apple or QC).
I think we should get Darl McBride involved, I'm sure he'd help smooth things over...
Surely, we learned from the cold war that you can't go overboard with the nuclear option. You keep building nukes until one of you can't afford to do it anymore, then the other person is the winner.
Apple understood, when it told other companies to stop paying Qualcomm. Qualcomm went to the courts to hit Apple where it hurts.
Seems par for the course, not sure who will go under first, my bet is on the no-longer revolutionary Apple.
Qualcomm is valued around $70bn. Apple has $285bn in cash, and generates another $59bn profit a year (last time round). They could just swallow Q if they really wanted.
If Apple lose the big one, they transfer $1bn to Q. But every 3.5 years they'd keep doing the same ($1.40-ish per unit, with 216m phones a year). Or to put it another way, if they swallowed Qualcomm, they'd save $300m-ish a year on patent license costs (and that's just the one that's been priced - I'm assuming there would be more), plus bank a couple of billion a year (Q's profits) and presumably be able to go license-happy on patents to other mobile manufacturers. Or just consume the know-how into their own chip design ambitions. Whatever, they'd not lose out massively.
On the flip side, Qualcomm could see a 15% lift in profits if they win, whether they sell chips or not to Cupertino. And that's before the cash payout for old infringements. But for context, that rolling revenue would be less than 10% of their R&D expenditure today. It sounds like big numbers all round, and they definitely have a measurable impact on Q where they're a rounding error for A.
Don't like patent wars, but kinda rooting for the wee fella here.
> If Apple lose the big one, they transfer $1bn to Q.
First off we might be talking triple damages (this is after all in the US). Secondly it is Apple that encouraged the suppliers not to pay license fees to Qualcomm. The implication here is huge. Many companies would not survive the payoff involved, and I guess they are smart enough to have some form of contractual obligation from Apple that they will protect them if Apple loses. There are two problems here. First of all Apple is known to grind their suppliers (ref. the well known sapphire glass supplier, the Dialog takeover and the Imagination operation, pretty ugly all of them, barely within the law) so they could delay the compensation longer than the suppliers can survive, hoping that Qualcomm's claims die screaming with the suppliers. The second issue is that this was an organised operation and Apple could be liable for this. In that case Apple's payout will be far, far beyond one billion dollars.
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