Apple demanded $1 billion for chance to win iPhone chip contract, Qualcomm CEO testifies

Under the 2011 deal, Qualcomm was named Apple’s sole supplier of modem chips. (Reuters)
Updated 12 January 2019

Apple demanded $1 billion for chance to win iPhone chip contract, Qualcomm CEO testifies

  • The payment from Qualcomm to Apple was meant to ease the technical costs of swapping out the iPhone’s then-current Infineon chip with Qualcomm’s
  • While such a payment is common in the industry, the size of it was not

SAN JOSE, California: 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 US 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.”


Jubilant cheers as Dubai begins one-year countdown to Expo 2020

Updated 20 October 2019

Jubilant cheers as Dubai begins one-year countdown to Expo 2020

  • Dubai prepares for eye-catching countdown on Burj Khalifa
  • Live performances from singer Mariah Carey and acclaimed Emirati singer and Expo 2020 ambassador Hussain Al-Jassmi

DUBAI: Crowds gathered at different locations in the UAE on Sunday night to mark its one-year countdown to Expo 2020 in October next year, with host emirates Dubai staging a spectacular concert, topped by a light projection on the iconic Burj Khalifa.

American superstar Mariah Carey was the star of the night, which also saw performances from regional artists including Khalifa, Shamma Hamdan, Abri and Funk Radius, Showcase and Jaysus Zain. The audience also grooved to a few Arabic tunes from Emirati singer Hussain Al-Jassmi.

A make-shift stage was set up at the Burj Park in Dubai’s downtown area to host the performances, while people also enjoyed a good view of the tallest building in the world. The countdown was facilitated by Emirati social media sensation Khalid Al-Ameri and Bollywood actress Shraddah Kapoor. 

A 3-minute firework display lit up the skies of Dubai as the crowd eagerly waited for Carey to appear on stage.

The 49-year-old singer sang her all-time favorite songs, including “Emotion,” “We Belong Together,” and a revival of the Motown classic “I’ll Be There,” to an enthusiastic audience who didn’t mind the heat and humidity at the outdoor venue.

The other six emirates also marked the occasion with free-for-all activities in venues such as the Louvre Abu Dhabi, Al Majaz Waterfront in Sharjah, Ajman Museum, Umm Al Quwain Corniche, Al Qawasim Corniche in Ras Al Khaimah and Fujairah Fort.

The events, Minister of State for International Cooperation and Expo 2020 Director-General Reem Al-Hashimy said, will “offer a window into the once-in-a-lifetime celebration that awaits from October 20, 2020.”

“The next 12 months will see us put the finishing touches to ensure an exceptional World Expo,” she added, in a report by state-run WAM.

The Louvre Abu Dhabi featured YouTube sensation Sandra Sahi, as well as singers Stephon Lemar, Layla Kardan, the Emirati Trio.

Indian band ROOH, singer and pianist Clarita de Quiroz, Egyptian oud player Rami Zaki and other regional artists were celebrating the count down at Sharjah’s Al Marjaz waterfront.

While the Ajman Museum hosted Arabic fusion band, pop-rock musician Hydyy, Emirati soul singer Chakram, poet Storm Fernandes, artist Humaira Hussain and MC Mohammed Enaba.

The 6-month Expo 2020, to be held at a vast new site in the south of Dubai, will officially open on Oct. 20 next year, with organizers expecting an estimate of 25 million visitors.