Lawsuit says smartphones are too costly due to Qualcomm


Premium phone, premium price.
Premium telephone, premium price.

Image: lili sams/mashable

It’s no secret that premium smartphones are promoting for fatter and fatter stacks of cash today. Now, the government is saying that is a problem — however not for the motive you would possibly assume.

The Federal Trade Commission introduced an antitrust suit against chip-maker Qualcomm in 2017, and it is just now taking part in out in court docket. Per CNET, the suit alleges that Qualcomm took advantage of a non-competitive market to overcharge Apple and different smartphone makers to be used of its chips, know-how, and mental property. 

So whereas sure, the newest iPhones carry a premium price as a result of Apple retains tricking them out with more premium features and ever crazier cameras, there are different causes smartphones have hit hard-to-swallow new pricing plateaus. Across your complete market, smartphones is perhaps extra reasonably priced if Qualcomm hadn’t demanded such a sizable minimize of producer income as a royalty for utilizing its tech.

Court findings might present that Qualcomm took advantage of its exclusivity for a time — a Qualcomm govt reportedly strong-armed an Apple exec into paying its prices by saying “I’m your solely alternative, and I do know Apple can afford to pay it.”

But that was again in 2013, and Apple hasn’t been unique with Qualcomm for some time. All iPhones got here with Qualcomm chips till 2016, when some iPhone 7 and seven Plus fashions began to return with Intel chips. iPhone X fashions got here with each Qualcomm and Intel chips. And the latest line of 2018 iPhones got here completely with Intel chips. 

iPhones did not cross the $1,000 price tag till the iPhone X fashions, when Qualcomm was not the unique provider. Apple was additionally mentioned to be pursuing a strategy of a high-end premium product to increase income. But Qualcomm wasn’t its unique partner at that time both.

Apple’s technique has already impressed a backlash. Thanks to decreased iPhone gross sales, particularly in China, Apple lately had to revise its revenue projections, inflicting a pause in inventory buying and selling and a ensuing drop in inventory prices. Some noticed this as proof that iPhones are too dang expensive.

Is Qualcomm solely in charge for the premium cost of smartphones? As the scenario with Apple proves, the story is probably going extra difficult than that. We’ll just have to attend and see what the justice system thinks.

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