Question

Chip makers (Qualcomm and Intel, for instance) and Smart Phone manufacturers (Apple and Samsung, for instance) belong to two oligopoly markets. However, these markets are connected because smart phones cannot work without chips. In 2017 we have seen a complex battle over patents and how much license fees should be between Apple and Qualcomm, the largest players in each market. They were fighting with lawsuits in the US, UK and China. Apple ended the litigation with Qualcomm in 2019 and agreed to buy Qualcomm Snapdragon chips because Intel-Apple were not able to develop 5G chips, Samsung and Wawei already have it, and Apple found itself cornered without 5G chips. However, the discussion of licence fee models is still relevant. Read this Reuters' article from 2017 about the license fee model supported by Qualcomm, Nokia and Ericsson, and the license fee model that Apple, Google, Mercedes, and VW would like to have: https://www.reuters.com/article/legal-uk-eu-technology-patents/apple-faces-down-qualcomm-ericsson-over-eu-patent-fees-idUSKCN1C71EO

1. Show with an example how these two license fee models are different.

2. As a consumer of final products and not chips, what model favors you? Why?

Answer 1

The main difference between two license fee models, Apple wanted to pay $1.50 per devices in royalties to Qualcomm, based on a 5 percent fee for the cost of each $30 modem connecting iphones to mobile networks.Instead,it ended up paying $7.50 per phone.Apple has always needed to develop its own modem. After all,it had always designed its own processors for the iphone and ipad, allowing it to optimize them for its own devices, thus having a performance-related competitive edge over andriod, which typically incorporates Qualcomm chips.And if you are talking about this years 2020. Its already too late for Apple to use Qualcomm's chips this year, but for 2020 it will purchase modem chips,including 5G modem chips,for the chipmaker for iphones after finalizing the deal," a souce with direct knowledge of the settlement plan told Nikkei.Qualcomm said 'its licensing buusiness benefits the whole industry by speeding up improvements to smartphones and the services they support and it doesn't stop rival chipmakers from accessing its technology.Instead,fees are charged to phone makers who pay a percentage of the selling price of each handset.Apple has been using Intel chips in Macs since 2006, when it moved away from powerPC processors. Apple has already proven that its own chips,used iniphones and ipads,are fast and powerful enough to run a PC too.

Coming on the second question

According to me Apple products are really good in quality wise, camera and security wise but Apple products are too expensive and delicate to handle. Its important for Apple users to take insurence of their devices otherwise if any damages occur then its really difficult to fix that devices. On the other hand andriod phones are cheap, with strong build up qujality, if damage it can be repair form neaby shops, even the shore keeper replace it if damage accidently,only one problem is that the security issue. If this can be manage then Andriod is better then Apple products.So according to me final product of Andriod is better. I used both the Apple and andriod but Mac devices are just for show off and for selfies and making videos. In apple you have purchase a single app to use but that amazing in andriod that almost all apps and features are easily available to the users.