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First, Apple is known to squeeze every penny from their suppliers to improve their bottom line. Second, likewise, Apple sued every single wireless patent holders (eg, Nokia, Ericsson, Qualcomm, etc) to negotiate better licensing terms -- but, to be fair, it's not uncommon for other smartphone OEMs to do so in court. Third, Apple's legal argument was always that Qualcomm's per-device (ie, final product) royalty basis licensing offer was not FRAND. Apple believes that the royalty should be based on the cost of Qualcomm's chips instead. But, of course, there is no legal basis or industry practice to support Apple's unfounded claim and, consequently, LOST EVERY lawsuit based on this claim for past 10+ years. Fourth, "... then also to sue various downstream part contractors ..." No, you don't sue everyone in supply-chain. The wireless patent holders collect their royalty only once and at the top of the supply-chain, ie, smartphone OEMs, to maximize their profit. and that's been the industry practice for much of the past 25+ years (possibly even longer). Fifth, "... it was untenable to have to source all of their LTE stuff from Qualcomm ..." Umm.. Stop, stop, stop! So in conclusion, it's all about saving Apple's margin, that's all. I don't blame any company for trying to minize their cost, but the recent event with Qualcomm, ie, FTC's attack on Qualcomm with Apple orchestrating behind the curtain, was highly unethical and abuse of their political power. PS. insulting languages removed |
This is just unequivocally false. I used to work for a semiconductor company that was a supplier for Apple. Apple would pay a premium compared to other companies.
The semiconductor game is kind of rigged, assuming you don't have your own fab, everyone knows your costs. They know how much a wafer costs and they know the size of your device, so they have a pretty good idea of what it costs you per device (they don't know your yield, but can guess a range).
Everyone uses that information to keep your profit margins fairly low. Apple would pay a premium compared to other manufacturers. You could probably look at the financial reports of various apple suppliers and reverse engineer that information.
Apple is extremely risk averse, them making their own modems is almost certainly about reducing supply chain risk.
Profit margins will be lower down on the priority list. They can just increase the price of the phone to improve those.
For the record, I am not an Apple fan, I disliked working for one of their suppliers and dislike their products. But they do pay their suppliers a premium.