https://www.bloomberg.com/gadfly/articles/2017-01-24/qualcomm-s-tax-collection-days-are-looking-numbered
The above article says QC deserves less cell phone loyalties. They give the example of when Apple adds more flash to a phone, QC's revenue goes up because the price of the phone went up, just because it has a QC modem. Why should adding a component like more memory provide any benefit to QC? Furthermore, why should adding a better camera benefit camera? Why should having a QC modem allow QC to get benefit from the entire device?
I argue that it should. I have no comment about the current executives, but it seems that Irwin (I joined long after he left) was a visionary and knew how important the modem would be to a mobile device and how to cleverly create a business model from it. What good is a 128GB of flash storage without a good modem? Whatever content you create is stored on flash, and a better modem with better download speeds results in more content created. The camera goes hand-in-hand with the storage. I don't know how cameras work, but I expect the better a camera, the bigger the image/video. The modem is helping to drive the storage and camera development. All are intertwined, but the modem has contributed more to the development of the other two than just the each of them separately. Even the CPU is intertwined with the modem. What good is having a fast CPU if there isn't a good modem to pass the data off to it fast enough, especially considering how much we rely on the cloud? We would not have had this rich interactive content without the development of the modem and it related components.
I'm just a few given examples of how important the modem is. Almost everything could be intertwined with the modem. Therefore, I don't think it's unreasonable for QC to receive a royalty for the entire phone. Keep in mind, QC also makes the radio and other related components, thus further increasing their footprint.
You could say how the modem benefits everything else is murky. The GPU may not be so intertwined with them modem. Then, the royalty agreement with the Chinese is perhaps a more reasonable trade off, where I think QC receives a royalty on 2/3 of the price of the phone. The Chinese agreed to the importance of the modem, because otherwise they would not have agreed to this big of a royalty.
Apple and others have signed off on legal agreements that stipulate how QC should receive a royalty. You may think their practice is unfair, but that's how the business and legal agreements were drawn up. Nothing is hidden. Lawyers from sides pore over and negotiate the details. If Apple and others don't like the agreement, they are free to make the modem themselves. Intel is still trying. Of course, QC owns patents in 3G/4G, but that's how QC has setup their business, and they've been following this model for decades.
Apple should tread carefully with this lawsuit. Apple is not much different from QC in some regards: they take 30% of app purchases, so they are saying 30% (which is a far less royalty than what QC charges for a modem that has more tangible benefit to other components on the phone) of whatever effort you've put in is because of them. It probably costs them no more than a penny when you download an app. They've recovered their developments costs many times over. I was upset and still am about their royalty. Don't be surprised if developers take Apple to court for this. Developers should.
It's a dog-eat-dog world, and Apple is paying the Trump card to get a better deal on the modem. In the end, I think QC will win because I expect they have well thought out legal agreements, but QC will negotiate to something less costly, similar to China. Their legal agreements have to be better than their physical technology, which many of you on this board complain about. Their business model is dependent on their legal work.