According to the article, their would-be competitors are legally blocked from competing. That's the opposite of competition.

They can spend some money on r&d and build a patent portfolio to force Qualcomm to cross license.

Intel and Samsung specifically did that by creating WiMax as a competing standard for LTE, but look what happened.

https://www.theverge.com/2017/1/17/14303910/qualcomm-alleged...

Well, standard != tech. They wanted to roll out an entire new network based on some flaky tech, instead of focusing on making a better radio.

In 10 years LTE is going to be to slow, and Qualcomm is busy developing whatever is going to replace it. if Intel wants a piece of that pie they need to do some r&d.

Not really. Qualcomm gets most of their profits from patent licensing. If someone pressured them hard in the hardware and patent space, they would rather exit the hardware space than exit the patent space. Qualcomm minus its hardware division would be very hard to sue for parent infringement and therefore wouldn't really care about anyone else's patent portfolio.

Doesn't seem like it would make a difference in the total cost. Intel could license their patents under the same terms as Qualcomm Patent Inc, and effectively get a discount out of Qualcomm Hardware Inc.

Legal battles are competition of a sort, but competition usually means competing products in the marketplace. Lawsuits don't have the same effect on prices or quality of goods sold.

You can argue that there are good reasons for patents, but the whole point of them is to create a legally protected monopoly, which prevents competition at least to some extent.

well, that has already happened. While Qualcomm is widely credited for creating the early wireless standards (eg, CDMA) single-handedly, their customers like Samsung and LG for instance stepped up their R&D and have contributed significantly to the recent 4G standard -- so much so they are now neck and neck in terms of patent counts.

In spite of this, under their contract with Qualcomm, Samsung has limited ability to market and sell their own basebands/APs in the US.

Samsung is a grown up, they signed a contract for a mutually beneficial reason. If they want a steeper discount, I am sure they can offer Qualcomm more fab capacity for their chipsets.

In my view, if qualcomm was being unreasonable in their pricing, Apple wouldn't have made 40b a year in profits. 50% of Qualcomms market cap. If anything, Qualcomm should charge them more.

FRAND doesn't specify that the price offered had to be the same to everyone.

I own stock in both, so I feel it's dumb of them to spend money on lawyers instead of engineers ;).

the premise of your first statement is what's being discussed and challenged here. The problem is that Qualcomm contracts are lopsided in violation of FRAND -- in this case, Qualcomm not only refuses to license their patents, but, in Samsung's case, also dictates to whom Samsung can sell their products and where they can do business. This isn't clearly about reducing their royalty payment as Apple is doing.

My understanding is that Qualcomm would allow Samsung to do whatever it wants if they paid a high enough fee. Sounds like the fee is to high for the US market at least. Afaik Samsung does ship some chips for the other markets.

Just because Samsung could earn a higher profit using their own chips, doesn't mean that Qualcomm should license it at that price. They could in theory compete on quality, or power at a higher price tier. Nothing in FRAND indicates that you should let competitors maximize their profits.

First, FRAND does explicitly require that Qualcomm license their SEPs to all willing licensees under non-discriminatory terms, not just their customers or end-device makers.

Second, this isn't about earning higher profit. but whether Qualcomm is abusing the standard essential patents to prevent competition and maintain their dominance. Qualcomm doesn't want to compete with anyone on quality or price. ETSI which governs the wireless standard forbids such anti-competitive licensing practices outlawed by local powers.

Sure, SEP/FRAND isn't about promoting competition or best price, etc, but it is certainly about interoperability and everyone having fair and reasonable access to the underlying IP's to achieve the ideal.

afaik, non-desciminatory just means that they can't say we are charging Samsung more because we don't like them, but they can say that the fee for a specific use is X. And they could change the fee based on volume, clients ability to pay, etc.

Given how vague it is, I think the way to determine what's fair is to look at the effect on the market. I think their socket share is 60-70% which is the lions share, but not at the point to be considered a monopoly. They can't double thier rates without loosing market share.

In my view Qualcomms market share is largely due to how efficiently they have integrated all the wireless technologies into one package. If intel had a single efficient multi band package for LTE/3G/2g/wifi/bt etc... the extra 2% licensing costs would be offset by the battery savings.

There is nothing vague about ETS's bylaws requiring all licensors to comply with local anti-trust/monopoly laws. Many SSO's, bar IEEE's recent licensing policy on "smallest saleable Compliant Implementation," intentionally leave it out in their by-laws or FRAND commitment to avoid crossing paths with regulators. This isn't about their market share, but whether their licensing practices were anti-competitive and/or in violation of local laws and Qualcomm has been found guilty on that by at least three different regulators. I don't have any problem with a "natural monopoly" -- though the US regulator may not agree with me -- but this isn't clearly a problem of just market competition.

That sounds awfully like worsening the situation further... like some sort of an arms race.

Using the same means that have locked other competitors out of Intel's and Samsung's market.