Apple is the only smartphone company to buy standalone modems;
Qualcomm CTO James Thompson testified Friday in an FTC trial as the company's chief technology officer James Thompson said on Friday that if Qualcomm didn't have to release separate modems for Apple, it wouldn't spend the time and money to update them every year.
James Thompson, who testified on Qualcomm’s behalf, said Qualcomm spends $250 million a year adapting its modems to Apple’s needs.
"Apple requires us to launch a new product every year," said James Thompson. "But if you look at our other customers that use these products, like the data card business, they don't even want us to do a new design every year."
Using the fastest possible modems in end equipment can Allowing us all to access websites faster or stream videos. Each generation of wireless technology allows us to leapfrog from the previous generation. This year, 5G modems will start showing up in phones, enabling download speeds that are 10 to 100 times faster than today's typical cellular connections.
Apple designs its own applications processor - the brains of the iPhone - but it relies on third-party chips for network connectivity. From the iPhone 4S in 2011 to the iPhone 6S and 6S Plus in 2015, the sole supplier of these chips was Qualcomm. The next year, Apple began using Intel modems in some models of the iPhone 7 and 7 Plus, but it still used Qualcomm modem chips in Verizon and Sprint versions. Apple's latest phones now only use Intel's 4G chips.
Thompson said all of Qualcomm's other mobile customers use its chips to integrate their modems with their applications processors on a single chip, the Snapdragon family of chips. But for Apple, Qualcomm took the modem embedded in its Snapdragon processor, wrapped a different chipset around it, and included different software and other items to enable it to run on iPhones. in operation.
Thompson said that if Qualcomm didn't have to build a new modem for Apple every year, it would update its modems less frequently. Instead, it will release a new standalone high-end modem every two to three years, he said.
"If we don't have Apple's business - the customers we have, the data card people, the automotive, etc., they don't require you to upgrade it every year," he said.
Qualcomm has been fighting the Federal Trade Commission (FTC) in court in San Jose, California, since January 4. On Tuesday afternoon, the U.S. Federal Trade Commission (FTC) filed a lawsuit against the company. The agency accuses Qualcomm of having a monopoly on wireless chips, forcing customers like Apple to work exclusively with Qualcomm and charging excessive licensing fees for its technology.
Tuesday marked the first time Qualcomm appeared in court in its own case. The company said the FTC's lawsuit was based on a "flawed legal theory." It also said that customers choose its chips because they are the best, and that it never stopped supplying processors to customers even as they competed to obtain licenses from Qualcomm.
Qualcomm called on its co-founder Irwin Jacobs and Durga Malladi, its senior vice president of 4G and 5G operations, to speak on Tuesday about Qualcomm's progress in wireless technology. Innovation.
Jacobs, considered one of the pioneers of mobile communications technology, testifies to Qualcomm's early years.
He said he came up with the idea of ??using code division multiple access (CDMA) technology for cell phones while driving in San Diego, and the company outfitted the technology with fans to show how it worked.
US wireless carriers' voice networks still use two fundamentally different technologies, CDMA or GSM. Sprint and Verizon use CDMA, while AT&T and T-Mobile and most of the world use GSM. Qualcomm owns most of the important patents related to CDMA, the technology that ultimately enabled 3G networks that can provide data services.
Thompson also confirmed Qualcomm's investments in CDMA and other wireless technologies on Friday. He confirmed that from 2011 to 2016, Qualcomm spent $5 billion annually and more than 20% of its revenue on research and development.
Qualcomm has a reputation for being ahead of the pack with wireless technology, but the company actually believes it is lagging behind its competitors in launching 4G LTE.
Thompson said Samsung and LG showed off demos in South Korea, which led to Qualcomm scrambling to catch up with 4G LTE processors.
"It's like a call of arms at the company, and we're marshalling resources around the company to try to catch up," Thompson said. "Obviously, we're seeing these demonstrations. There's a lot of evidence that we We fell behind. We went all out and finally launched the product." When Qualcomm finally launched its 4G LTE chip, it found that it was actually the only company with a commercial product.
"To our surprise, we were the only ones," Thompson said.
Thompson also testified about Qualcomm’s mistakes in 2014. When Apple launched 64-bit processors for its mobile devices in late 2013, Qualcomm's customers pressured Qualcomm to do the same. But Qualcomm isn't ready for 64-bit yet and wants to tweak its processors. The resulting chip performed poorly and was not released with customers, Thompson said.
The chip was so bad that Samsung, the world's largest phone maker, ditched Qualcomm's Snapdragon processors and used its own Exynos chips. Other customers buy older chips or use lower-level processors, Thompson said. Ultimately, he said, the modem accounted for only one-tenth of its predecessor's lifetime sales.
"We win and lose every year," Thompson said. "It's not about one single technology. It's about a wide range of technologies, all the things that make phones interesting. If you have a spectacular failure with one of those technologies, that's okay, you're going to fail across the board." < /p>
The FTC filed suit against Qualcomm two years ago with help from chipmaker Intel and iPhone supplier Apple. The United States says Qualcomm has a monopoly on modem chips and is harming competition among companies by trying to maintain its competitiveness. The U.S. Federal Trade Commission (FTC) said Qualcomm's "excessive" patent rates prevented competitors from entering the market, thereby driving up the cost of mobile phones, which in turn caused mobile phone prices to rise and harmed consumers.
In this court hearing, the Federal Trade Commission (FTC) has summoned witnesses from companies such as Apple, Samsung, Intel and Huawei, and asked experts to discuss the impact of Qualcomm’s licensing practices on the mobile industry. The damage was confirmed. The trial sheds light on the inner workings of the tech industry's most important business: smartphones, showing how vendors compete for dominance and profits.
While Qualcomm is an innovator, that doesn't mean it can't become a monopoly, UC Berkeley professor Carl Shapiro and an expert witness for the Federal Trade Commission testified Tuesday. who.
"Qualcomm should be commended for its technological achievements," Shapiro said.
"But ... what's really important is that companies that aren't as good as Qualcomm or don't have the scale are not stymied from trying to seize and threaten and challenge the leaders," he testified. , Qualcomm is using its market power and its monopoly power over chips to extract "unusually high" royalties for patents. Shapiro said this would increase costs for rivals, weaken them as competitors and strengthen Qualcomm's monopoly power.
Qualcomm believes its broad patent portfolio and innovations justify its expenses. Chief Executive Steve Mollenkopf, who assumed the role a week ago, defended the company's chip licensing practices, saying the way his company sells chips to smartphone makers is best for everyone involved.
During Friday's cross-examination, the FTC sent an email between Thompson and Mollenkopf. In it, Thompson said that if Apple is cutting Qualcomm's licensing business, Qualcomm should fight back when it's strong. His email said that without Qualcomm, Apple would struggle in North America, China and other parts of the world.