Be careful out there folks! I have some experience with this as you can see in my twitter response to IrrationalAnalysis. A few things I'd like to point out -
1. As IrrationalAnalysis says, modem development is incredibly hard. Few are aware that even nVidia tried, failed and gave up. They bought Icera in Bristol UK in 2011 for use with Tegra but gave up and sold it in 4 years. Some of the same folks were involved in Graphcore, another failure that got bought by Softbank eventually, but I digress. At least nVidia was smart enough to realize not too late.
2. The last big instance of Apple needing to license core IP was for GPUs. They used the viable third guy out there - Imagination Technologies (AMD had sold mobile GPU IP to Qualcomm, Apple hated nVidia due to bumpgate). But guess what happened once they developed enough experience? They developed their own in-house GPU. Apple has enough money and time to replace anything important. If they can do something fundamental as developing their own CPU and switching the ISA for their software, they can do anything especially things that are kind of internal.
3. Even assuming they don't do this, it's not all roses as an Apple supplier. Look up what Murata says about what Apple allows them to earn. There are plenty of areas Apple doesn't want to bother to enter, but don't forget who has the upper hand in negotiations.
4. Assuming the numbers here are correct (seems reasonable to me), we are looking at about $40 million incremental revenue in the next few years and then flat (as smartphones aren't really growing). From around a $100 million current revenue level, is it really that exciting? This isn't a long-term hold quality name IMO.
It's certainly delusional that Apple just could stop paying for patents that it uses. It is called stealing.
Other option is that Qualcomm patents are not under FRAND requirements because 5G can be implemented without and in the future Qualcomm can charge other companies whatever it wants.
Also, there are good articles on the various reasons for the years-long delay of Apple's 5G modem. It wasn't just Intel's IP; Apple knew (mostly) what they were buying, and what was still missing. What tripped them up was basically, well, arrogance (C-suite). The thinking was apparently "we are great at designing CPUs, GPUs etc, that modem stuff can't be that hard". Plus, they had money and were willing to throw a lot of it at the development. Turns out that modems are their very own universe, and great chip designer aren't automatically good at designing performant and efficient HF modems. They actually had a working modem earlier, however, it was quite power hungry (literally - battery drain). Hence the need to go back, hat and checkbook in hand, to Qualcomm. Now that Apple has their own usable 5G modem, that revenue source for Qualcomm won't be there for much longer.
In related news, Mediatek announced that they have taken the speed crown for 5G from Qualcomm. It'll be interesting if Mediatek gets more traction in the US not just with smartphone SoCs, but also for 5G-based internet delivery to people's homes. There's a strong push by Verizon, AT&T and Comcast to avoid installing FTTH and deliver high speed internet by fast 5G wireless instead.
Be careful out there folks! I have some experience with this as you can see in my twitter response to IrrationalAnalysis. A few things I'd like to point out -
1. As IrrationalAnalysis says, modem development is incredibly hard. Few are aware that even nVidia tried, failed and gave up. They bought Icera in Bristol UK in 2011 for use with Tegra but gave up and sold it in 4 years. Some of the same folks were involved in Graphcore, another failure that got bought by Softbank eventually, but I digress. At least nVidia was smart enough to realize not too late.
2. The last big instance of Apple needing to license core IP was for GPUs. They used the viable third guy out there - Imagination Technologies (AMD had sold mobile GPU IP to Qualcomm, Apple hated nVidia due to bumpgate). But guess what happened once they developed enough experience? They developed their own in-house GPU. Apple has enough money and time to replace anything important. If they can do something fundamental as developing their own CPU and switching the ISA for their software, they can do anything especially things that are kind of internal.
3. Even assuming they don't do this, it's not all roses as an Apple supplier. Look up what Murata says about what Apple allows them to earn. There are plenty of areas Apple doesn't want to bother to enter, but don't forget who has the upper hand in negotiations.
4. Assuming the numbers here are correct (seems reasonable to me), we are looking at about $40 million incremental revenue in the next few years and then flat (as smartphones aren't really growing). From around a $100 million current revenue level, is it really that exciting? This isn't a long-term hold quality name IMO.
Good luck out there.
P.S. Who's the smallest dinosaur in that picture?
It's certainly delusional that Apple just could stop paying for patents that it uses. It is called stealing.
Other option is that Qualcomm patents are not under FRAND requirements because 5G can be implemented without and in the future Qualcomm can charge other companies whatever it wants.
Either way Qualcomm gets the money.
Also, there are good articles on the various reasons for the years-long delay of Apple's 5G modem. It wasn't just Intel's IP; Apple knew (mostly) what they were buying, and what was still missing. What tripped them up was basically, well, arrogance (C-suite). The thinking was apparently "we are great at designing CPUs, GPUs etc, that modem stuff can't be that hard". Plus, they had money and were willing to throw a lot of it at the development. Turns out that modems are their very own universe, and great chip designer aren't automatically good at designing performant and efficient HF modems. They actually had a working modem earlier, however, it was quite power hungry (literally - battery drain). Hence the need to go back, hat and checkbook in hand, to Qualcomm. Now that Apple has their own usable 5G modem, that revenue source for Qualcomm won't be there for much longer.
There’s a tear down video of 16e out now. Have you seen it? Are CEVA’s products in there?
In related news, Mediatek announced that they have taken the speed crown for 5G from Qualcomm. It'll be interesting if Mediatek gets more traction in the US not just with smartphone SoCs, but also for 5G-based internet delivery to people's homes. There's a strong push by Verizon, AT&T and Comcast to avoid installing FTTH and deliver high speed internet by fast 5G wireless instead.
> Last post was about how QCOM stock is cursed
> Every post about QCOM is about how it’s doomed
Did the Snapdragon laptop hurt you or something
Fire post and thumbnail 🔥🔥