Court action says smartphones are too expensive because of Qualcomm


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

Image: lili sams / mashable

It's no secret that premium smartphones are being sold for heavier and heavier stacks of cash these days. Now the government is saying that it is a problem – but not for the reason you think.

The Federal Trade Commission has filed an antitrust lawsuit against chip maker Qualcomm in 2017, and is now only in court. According to CNET, the lawsuit claims that Qualcomm took advantage of a non-competitive market to charge too much of Apple and other smartphone manufacturers for the use of its chips, technology and intellectual property.

So, yes, newer iPhones carry a premium price because Apple continues to fool them with more premium features and ever-crazier cameras, there are other reasons why smartphones have hit new difficult-to-swallow price levels. Across the market, smartphones may be more affordable if Qualcomm does not require such a sizable cut in manufacturer revenue as royalty for the use of its technology.

The court's findings may show that Qualcomm took advantage of its exclusivity for a while – a Qualcomm executive allegedly forced an Apple executive to pay his prices by saying "I'm your only choice and I know Apple can pay for it."

But that was in 2013, and Apple has not been exclusive to Qualcomm for some time. All iPhones came with Qualcomm chips until 2016, when some iPhone 7 and 7 Plus models started coming with Intel chips. The iPhone X models came with the Qualcomm and Intel chips. And the latest line of iPhones 2018 came exclusively with Intel chips.

IPhones did not pass the price of $ 1,000 up to the iPhone X models, when Qualcomm was no longer the exclusive supplier. It was also said that Apple was following a strategy of a premium high-end product to increase revenue. But Qualcomm was not her exclusive partner at the time.

Apple's strategy has already inspired a negative reaction. Thanks to declining iPhone sales, specifically in China, Apple recently had to revise its revenue projections, causing a pause in stock trading and a consequent drop in stock prices. Some have seen this as proof that iPhones are very expensive.

Is Qualcomm entirely to blame for the premium cost of smartphones? As the situation with Apple proves, the story is probably more complicated than that. We just have to wait and see what the judicial system thinks.

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