Qualcomm doesn't wield enough power to harm competition, says trial witness
Testifying during the ongoing antitrust trial pitting the U.S. Federal Trade Commission against Qualcomm, an expert witness claimed that despite the FTC's allegations, the company doesn't have enough clout to harm the mobile chip industry.
Qualcomm has for instance cut chip prices in response to MediaTek products, and Intel seeking orders from Apple in 2014, consultancy owner Tasneem Chipty said on Tuesday, according to CNet. While those actions won Qualcomm business, that's not anticompetitive, Chipty explained.
"Qualcomm doesn't have sufficient market power to coerce OEMs into onerous business terms that would rob them of billions of dollars," she argued, pointing to the fact that the company lost 50 points of marketshare in premium smartphones between 2014 and 2017, ceding ground not just to MediaTek and Intel but Huawei and Samsung. Since March 2018, all of the new premium phones from Apple and Huawei have used non-Qualcomm chips.
Apple's director of cellular systems architecture, Matthias Sauer, earlier testified that Intel modems were under consideration as far back as 2012, but that they didn't meet specifications. He also acknowledged, however, that an Intel modem might've made its way into 2014 iPads, but Qualcomm offered incentives to stay loyal.
Chipty further suggested that the FTC had failed to recognize the "dynamic competition" in the chip industry, and that Qualcomm's deals with Apple were forged out of solid business reasons.
The FTC's lawsuit dates back to 2017, and accuses Qualcomm of antitrust violations by forcing chip buyers to sign patent licenses at inflated rates. The Commission rested its case last week.
Qualcomm has defended its practices by a number of means, for example pointing to the high cost of innovation. Apple has called the chipmaker's demands "onerous," at one point asking Apple to cross-license all of its intellectual property to get a direct license for standards-essential patents, something it decided to eschew.
Apple's Chief Operating Officer Jeff Williams recently revealed that Apple wanted to return to a mix of Intel and Qualcomm modems for 2018 iPhones, but was shot down by Qualcomm CEO Steve Mollenkopf. The two companies have been engaged in a global legal war since 2017, instigated by Apple, which sued over nearly $1 billion in rebates allegedly withheld as retaliation for cooperation with antitrust investigators.
AppleInsider has affiliate partnerships and may earn commission on products purchased through affiliate links. These partnerships do not influence our editorial content.