Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Apple demanded $1 billion for chance to win iPhone: Qualcomm CEO

share with twitter share with LinkedIn share with facebook
share via e-mail
0
01/11/2019 | 09:58pm EDT
FILE PHOTO: A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai

SAN JOSE, California (Reuters) - Qualcomm sought to become the sole supplier of modem chips for Apple's iPhone to recoup a $1-billion "incentive payment" that Apple insisted on, not to block rivals from the market, Qualcomm's chief executive testified on Friday.

The payment from Qualcomm to Apple - part of a 2011 deal between Apple and Qualcomm - was meant to ease the technical costs of swapping out the iPhone's then-current Infineon chip with Qualcomm's, CEO Steve Mollenkopf testified at a trial with the U.S. Federal Trade Commission.

While such a payment is common in the industry, the size of it was not, Mollenkopf said.

Under the 2011 deal, Qualcomm was named Apple's sole supplier of modem chips, which help mobile phones connect to wireless data networks, in exchange for which Qualcomm agreed to give Apple a rebate - the exact nature of which has not been disclosed. Apple could choose another supplier but it would lose the rebate, effectively increasing the cost of its chips.

Antitrust regulators have argued the deal with Apple was part of a pattern of anticompetitive conduct by Qualcomm to preserve its dominance in modem chips and exclude players like Intel.

At a federal courthouse in San Jose, California, Mollenkopf testified that Apple demanded the $1 billion without any assurance of how many chips it would buy, which pushed the chip supplier to pursue an exclusivity arrangement in order to ensure it sold enough chips to recover the payment.

Qualcomm was not aiming to block rivals like Intel, he said.

"The risk was, what would the volume be? Would we get everything we wanted, given that we paid so much in incentive?" Mollenkopf testified.

Earlier in the day, Apple supply chain executive Tony Blevins testified that it was Apple's practice to pursue at least two suppliers and as many as six for each of the more than 1,000 components in the iPhone.

The company stopped trying to place an Intel modem chip in the iPad Mini 2 because losing the rebates on Qualcomm's chips would have made the overall cost too high, he said.

"They made it very unattractive for us to use another chip supplier," Blevins said of the rebates. "These rebates were very, very large."

(Reporting by Stephen Nellis; Editing by Sandra Maler and Sonya Hepinstall)

By Stephen Nellis

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
10:57pU.S. states probing Hyundai, Kia over vehicle fires - Connecticut AG
RE
10:52pMalaysia's February consumer prices seen falling 0.3 perfect year on year
RE
10:49pEXCLUSIVE : Saudi Arabia curbs family influence in Binladin group shake-up
RE
10:31pMalaysian PM Mahathir says some state-owned entities may be listed
RE
10:15pOil hovers near 2019 highs on OPEC-led supply cuts, U.S. sanctions
RE
10:08pSingapore's Golden Gate partners Hanwha to invest in Southeast Asian startups
RE
09:56pELON MUSK : Elon Musk never sought approval for a single Tesla tweet, U.S. SEC tells judge
RE
09:51pCanada's Alberta increases crude output limit for May and June
RE
09:46pGM considers options for its Lyft stake following IPO
RE
09:25pGOVERNMENT OF ALBERTA : Province increases oil production limits
PU
Latest news "Economy & Forex"
Advertisement