[DrJosiah]

Not to defend Qualcomm, but patent bundling is very common in telecommunications tech for a very simple reason: what good is 1 licensed patent when you need 5 patents to actually build a product?

And more specifically, 4g phones usually have fallback to 3g or even lower speeds, so if you're going to build a 4g phone, you almost always need to license the tech for 3g and prior. Unbundling the patents in this situation is great theoretically, but in practice it is likely to result in licensees not licensing enough patents, opening themselves up for patent lawsuits.

[Dwolb]

Interesting. From a microeconomics perspective, bundling is a form of price discrimination which is optimal for situations where the seller has multiple products, but buyers' wants are negatively correlated.

e.g. Roger sells both candy bars and packs of gum, both of which cost him $0 to produce (for simplicity). Al is willing to pay $5 for a candy bar, but $1 for a pack of gum. Jesse willing to pay $1 for a candy bar and $5 for a pack of gum. Roger could sell one candy bar to Al for $5 and one pack of gum to Jesse for $5 for a total profit of $10. More optimally, Roger could sell a bundle consisting of both the candy bar and the pack of gum to both Al and Jesse for $6 for a total profit of $12. Bundling has optimally increased Roger's profits.

[DrJosiah]

It would be interesting to know to what extent Qualcomm was doing this.

[nichtich]

So bundling should be one of the options instead of the only option. With bundling they are locking up the tech stack for the manufactures.

[DrJosiah]

Again, telecommunications is a strange beast. To make the one chip to do all of what is called 4g, you need something like a dozen related patents. Ditto for basically every telecommunications product out there.

That's why the auction for the 600 Nortel patents was so important, they all need to cross-license from each other in order to build a product. Yes, having those patents means you've got more weight to swing around in the patent war, but you can't really build a telecommunications product without licensing a bunch of patents.

Again, theoretically this is an awesome idea. But in practice, this is really just government-sponsored theft from Qualcomm, and the only reason that Qualcomm is going with the flow is because China would be a huge market to lose. So they used to make $100 and they now make $65, or maybe even $25 due to reduced patent licensing? Better than $0.