First, in terms of patent fee acceptance, Qualcomm lowered the threshold for licensing, and smart phone manufacturers were able to choose lower-cost licensing projects, from 5% of original equipment costs to 3.25% of equipment costs.
Secondly, by opening up its 5G patents, it no longer takes the patent bundled route of the CDMA era. Mobile and tablet manufacturers do not need to pay extra fees for adopting Qualcomm 5G communication licenses. This move can placate regulatory agencies and the vast number of manufacturers. Qualcomm said that it hopes that Without increasing the price, provide more technical and patented products to create a good foundation for future market stabilization. They call their own company's 5G licensing policy as 'regulator-friendly' license.
Finally, Qualcomm is considering gradually discarding the consistent practice of charging a percentage of equipment costs, which will benefit high-end mobile phones such as the Apple iPhone.
In addition, Qualcomm announced last week that it will adjust its core business patent licensing fees, set a limit of US$400, which is one-fifth lower than the previous US$500 limit, in order to activate the authorized business development.
But so far Apple has not responded to this.
Qualcomm dropped Apple patent fees for major customers?
Market analysts analyzed that Qualcomm’s practice was based on its major customer, Apple. In early 2017, Apple filed a $1 billion lawsuit against Qualcomm, accusing Qualcomm of receiving unfair royalties for 'unrelated technology'. Apple insists that Qualcomm's standard pricing for mobile phones is unfair, but Qualcomm responded that their technology is 'the core of every iPhone'. Qualcomm subsequently filed a counterclaim, accusing Apple of violating the license agreement and making a false statement. .
It is precisely because of this unfinished patent wars that it is reported that Apple will abandon the use of Qualcomm's baseband chips and use competitors' Intel products as the main supplier of the iPhone. This will create a camp for Qualcomm. Serious impact on the revenue.
Recently, Qualcomm announced its second-quarter earnings report for 2018. Technology-authorized revenues fell 44% from the same period in 2017 and also fell 3% from the first quarter of 2018. The main reason was that the past three quarters have not come from Apple. Any income that results in a 40% drop in operating income.
Qualcomm and Huawei are also negotiating patents
It is worth mentioning that, in addition to the patent dispute with Apple, in March 2018, the Wall Street Journal quoted sources as saying that Qualcomm was negotiating with Huawei to try to resolve the patent dispute. In November last year, Qualcomm held a meeting with shareholders. It was revealed that in addition to Apple, there was also a mainland mobile phone brand maker that refused to pay royalties. According to Taiwan media quoted supply chain sources, the mainland company is Huawei.
Huawei is the second company to refuse to pay royalties to Qualcomm. Before, the world’s top four Apple product OEM manufacturers – Foxconn’s parent companies, Hon Hai Precision, Wistron, Compal and Hewlett-Packard—according to Apple’s Intent, refused to pay royalties to Qualcomm and brought the company to court. These OEMs have been paying until 2016.
It is reported that Huawei's annual shipments of smart phones are approximately 150 million. Although the average unit price of Huawei mobile phones is relatively low, about US$300, Huawei pays Qualcomm’s patent fees annually and accounts for approximately 5 to 10% of Qualcomm’s royalties. , Plus Huawei owns its own baseband technology, and many other related patents, and decided to suspend payment of Qualcomm royalties.
It is reported that although the negotiation between Qualcomm and Huawei has proceeded smoothly, it does not rule out the possibility of a breakdown of the negotiations and does not guarantee that the parties will reach an agreement.