Google made Apple cider with AAPL.

[iGas]

Apple says it would pay $1 per Apple iPhone to Motorola to license FRAND patents

Courts may force Motorola to license FRAND patents to Microsoft and Apple

Funny that Apple think that their curve worth more than $6 a phone, while believe that FRAND for Wifi technology worth no more than $1 per phone.

 

[akugami]

The problem is that FRAND means Fair, Reasonable, And Non-Discriminatory. It is not a matter of how "valuable" a patent is but what the market price is for that patent. That means if Motorola licenses their patent(s) for $1 per device on average, then that's the ballpark Apple gets to use when negotiating with Motorola. Apple's design patents are not FRAND. Apple can charge whatever the hell they want.

 

[mikegg]

So if Apple sells 50 million, they only have to pay $50 million? That's such a small fraction of their profit. I don't think they care. $1/device is a win for Apple.

 

[iGas]

The problem is that FRAND means Fair, Reasonable, And Non-Discriminatory. It is not a matter of how "valuable" a patent is but what the market price is for that patent. That means if Motorola licenses their patent(s) for $1 per device on average, then that's the ballpark Apple gets to use when negotiating with Motorola. Apple's design patents are not FRAND. Apple can charge whatever the hell they want.

I do not know what FRAND licensing price for IT, but in the industry that I use to work in is around 2%, hence Google demand of 2.25% seems to be reasonable over that of $1 per iPhone 5 that cost between $650~850.

If Apple engage in unreasonable and discriminatory practice, then it is only fair for competition to retaliates on the coward that is trying to make money behind a shield of lawyers instead of innovation, ie. Rambus, SCO, etc...

Apple has published a statement which admits that Samsung has not infringed its designs.

"Apple has had success with one claim in the US in which a jury suggested that Samsung pay a $1.05bn (£650m) fine for infringing software patents. Samsung has appealed against this decision. Most recently, a US International Trade Commission made a preliminary ruling that Samsung had infringed four patents relating to the look and feel of the iPhone."

Apple admitted that it is guilty of infringing all or part of the 13 wifi patents that Google acquired from Motorola 5 days before the court date, by offering up to $1 per device.

IMHO, Apple know that it doesn't have a leg to stand on hence it is trying to weasel out of a more expensive and damaging pay out. In the mean while Samsung and the majority of the IT community, minus the Apple core shrills firmly believe that the award for the Apple curve is a huge erroneous in the American patten and court system.

 

[iGas]

So if Apple sells 50 million, they only have to pay $50 million? That's such a small fraction of their profit. I don't think they care. $1/device is a win for Apple.

You are right, that why Apple is trying to cheap out 5 days before Google and Apple face off in court.

IMHO, Apple = cheating/thieving coward

 

[jpeyton]

FYI, the amount Motorola is asking for amounts to $450 million/quarter based on 30 million units sold (roughly how many iPhones they sell in a quarter).

That number could go up if those patents apply to the cellular iPads as well.

All in all, Motorola is asking Apple for $2 billion/year.

However, even if the courts award Motorola a 1% licensing fee, they would still take $1 billion/year from Apple.

 

[akugami]

I do not know what FRAND licensing price for IT, but in the industry that I use to work in is around 2%, hence Google demand of 2.25% seems to be reasonable over that of $1 per iPhone 5 that cost between $650~850.

If Apple engage in unreasonable and discriminatory practice, then it is only fair for competition to retaliates on the coward that is trying to make money behind a shield of lawyers instead of innovation, ie. Rambus, SCO, etc...

How do you engage in unreasonable and discriminatory practices if the patents are not FRAND patents? That's the issue here. Apple can charger whatever the hell they want for non-FRAND patents. Apple does have FRAND patents and the pricing on those have to be fair to everyone in the industry.

Many people will not like this but if it's a patent that Apple owns and it's not a FRAND patent, Apple can charge $100 per license for non-FRAND patents to one guy and $1 to another if they want and Apple wouldn't be doing anything wrong.

If it is a FRAND patent, then Apple (or Moto, Samsung, etc.) would have to charge everyone a licensing fee in the same ballpark. If that's on average $1 per device, 2% of revenues, or whatever it is then so be it.

Apple has published a statement which admits that Samsung has not infringed its designs.

"Apple has had success with one claim in the US in which a jury suggested that Samsung pay a $1.05bn (£650m) fine for infringing software patents. Samsung has appealed against this decision. Most recently, a US International Trade Commission made a preliminary ruling that Samsung had infringed four patents relating to the look and feel of the iPhone."

And that was a court ordered apology over a court case Apple lost. Apple also successfully sued Samsung over the same patents in different venues. But they're still not FRAND patents and Apple can charge whatever licensing fees they want.

Apple admired that it is guilty of infringing all or part of the 13 wifi patents that Google acquired from Motorola 5 days before the court date, by offering up to $1 per device.

IMHO, Apple know that it doesn't have a leg to stand on hence it is trying to weasel out of a more expensive and damaging pay out. In the mean while Samsung and the majority of the IT community, minus the Apple core shrills firmly believe that the award for the Apple curve is a huge erroneous in the American patten and court system.

Conveniently you leave out how ridiculous some of Motorola's asking prices for licensing Moto's FRAND patents are. Not to mention that Motorola was going to get hit with FRAND patent abuse if they didn't make a reasonable offer.

Keep in mind that Apple has never said they wouldn't pay. Their argument was that Moto's demands to license the FRAND patents in question was ridiculously priced. And at 2.25% of revenues which I believe was the original Motorola demand, it's hard to argue that it isn't an outrageous sum when that is going to mean billions in licensing fees per year to Motorola.

 

[SunnyD]

Fair, Reasonable and Non-Discriminatory:

For small manufacturer who has small margins, sure, $1 per handset may be Fair, Reasonable and Non-Discriminatory.

For Apple, 2.25% of retail pricing is easily Fair, Reasonable and Non-Discriminatory given Apple's markup and profit margins.

There's absolutely no reason that every licensee of a FRAND patent need be held to the exact same terms.

 

[Mopetar]

Fair, Reasonable and Non-Discriminatory:

For small manufacturer who has small margins, sure, $1 per handset may be Fair, Reasonable and Non-Discriminatory.

For Apple, 2.25% of retail pricing is easily Fair, Reasonable and Non-Discriminatory given Apple's markup and profit margins.

You're not getting the non-discriminator part. If they're selling to anyone for $1 per handset without some kind of cross-licensing deal in place, they have to give the same offer to Apple.

At this point Apple should just use their $120 billion to buy some other company that has licenses for all these patents and be done with it.

 

[SunnyD]

You're not getting the non-discriminator part. If they're selling to anyone for $1 per handset without some kind of cross-licensing deal in place, they have to give the same offer to Apple.

At this point Apple should just use their $120 billion to buy some other company that has licenses for all these patents and be done with it.

I get the definition of discrimination just fine.

Google is looking for a PERCENTAGE for it's license. My guess is Apple is looking at some numbers from some other company and saying "We want that rate." Google is saying, "Okay, pay 2.25%" - which is the rate they charged the other company.

2.25% on a retail $600 handset != 2.25% on a retail $350 handset. That's why Apple is bitching.

 

[akugami]

SunnyD, 2.25% of what Apple's handset revenue is hardly fair considering what this amounts to. It's ridiculously priced.

Without knowing Samsung's exact royalty fees, I would bet good money that Samsung doesn't pay close to this amount for Moto's patents on Samsung's flagship Galaxy Android phones which are in the same price range as what Apple charges for the iPhones.

 

[SunnyD]

SunnyD, 2.25% of what Apple's handset revenue is hardly fair considering what this amounts to. It's ridiculously priced.

Without knowing Samsung's exact royalty fees, I would bet good money that Samsung doesn't pay close to this amount for Moto's patents on Samsung's flagship Galaxy Android phones which are in the same price range as what Apple charges for the iPhones.

It's Apple's prerogative to price their products accordingly.

Honestly, in my opinion (which doesn't matter), 2.25% out of the 100% or so profit margin Apple makes is a pittance anyway.

 

[TuxDave]

It's Apple's prerogative to price their products accordingly.

Honestly, in my opinion (which doesn't matter), 2.25% out of the 100% or so profit margin Apple makes is a pittance anyway.

If Apple had a near 100% profit margin, I would totally buy more of their stock.

 

[akugami]

It's Apple's prerogative to price their products accordingly.

Honestly, in my opinion (which doesn't matter), 2.25% out of the 100% or so profit margin Apple makes is a pittance anyway.

You're saying 2.25% of Apple's handset revenue is fair. If everyone else pays an equivalent of $1 per handset and Apple is paying $2 because of its higher priced handsets, you are going to tell me that Apple doesn't have a valid argument that they are being unfairly priced? The situation is not black and white, there are shades of gray.

Let's say I make a widget and my competitor, John Doe, makes a similar widget. We both license the same patent from Company X. I sell my widget for $400, my competitor sells his for $200. Due to me using higher priced premium parts my profit margin is much lower than my competitors. In fact, we make roughly the same amount of money per widget. Would it be fair for me to pay a 2% flat fee vs my competitor? I wouldn't think so.

Yes, Apple makes more per handset than almost anyone else and my example is not reality but it is an example where a flat 2% does not seem fair to me when my competitor makes the same real profits I do but I have to pay a higher per widget licensing fee. What constitutes a fair licensing fees is not always a black or white argument.

 

[SunnyD]

You're saying 2.25% of Apple's handset revenue is fair. If everyone else pays an equivalent of $1 per handset and Apple is paying $2 because of its higher priced handsets, you are going to tell me that Apple doesn't have a valid argument that they are being unfairly priced? The situation is not black and white, there are shades of gray.

Let's say I make a widget and my competitor, John Doe, makes a similar widget. We both license the same patent from Company X. I sell my widget for $400, my competitor sells his for $200. Due to me using higher priced premium parts my profit margin is much lower than my competitors. In fact, we make roughly the same amount of money per widget. Would it be fair for me to pay a 2% flat fee vs my competitor? I wouldn't think so.

Yes, Apple makes more per handset than almost anyone else and my example is not reality but it is an example where a flat 2% does not seem fair to me when my competitor makes the same real profits I do but I have to pay a higher per widget licensing fee. What constitutes a fair licensing fees is not always a black or white argument.

The problem is we know that Apple gets better preferred supplier pricing on nearly all of it's "widgets" than its competitors, and uses nearly the same off-the-shelf parts as everybody else does. It's been proven time and again. Besides, this isn't even remotely the point.

This is a cost of doing business. Google wants a percentage-based licensing fee. FRAND or not, Apple can shove it where the sun doesn't shine.

Now on the other hand, I will admit if Google is giving ALL of its other licensees a licensing rate of 0.225% or something, then yes, what they are asking would be unreasonable. Odds are we will never really know since these licensing agreements are shrouded in secrecy anyway.

 

[akugami]

The problem is we know that Apple gets better preferred supplier pricing on nearly all of it's "widgets" than its competitors, and uses nearly the same off-the-shelf parts as everybody else does. It's been proven time and again. Besides, this isn't even remotely the point.

That has nothing to do with patent licensing and everything to do with Apple running a tight and steady ship. Those are two separate unrelated issues.

This is a cost of doing business. Google wants a percentage-based licensing fee. FRAND or not, Apple can shove it where the sun doesn't shine.

Yes, it is a cost of doing business. BUT if you own a FRAND patent, you can't abuse it. Motorola (and Samsung) are being investigated for FRAND patent abuse in at least one venue. Meaning that there is at least some circumstantial evidence that Motorola's demands are unFair, unReasonable, and not Non-Discriminatory.

No one has to nominate their patents for inclusion as an industry standard but usually when you do they require FRAND agreements which are legally binding so you can't price gouge others.

Now on the other hand, I will admit if Google is giving ALL of its other licensees a licensing rate of 0.225% or something, then yes, what they are asking would be unreasonable. Odds are we will never really know since these licensing agreements are shrouded in secrecy anyway.

Motorola is being investigated for possible FRAND patent abuse by the FTC and the EU. Meaning there is reasonable suspicion that Motorola is abusing its monopoly position in regards to FRAND patents.

Yes, we will probably never publicly know the exact amounts Moto is charging others but I'm sure that Apple has a pretty good ballpark figure of what is being charged others and what the patents are worth.


**Breaking News****Breaking News****Breaking News**

According to Bloomberg the FTC staff is recommending that the FTC sues Google/Motorola for patent abuse.

 

[golem]

**Breaking News****Breaking News****Breaking News**

According to Bloomberg the FTC staff is recommending that the FTC sues Google/Motorola for patent abuse.

If this suit actually goes to court, then its likely we will find out what Motorola is charging it licenses and what it was trying to charge Microsoft and Apple. Unless Google settles out of court. If that happens, then I would think Motorola was trying to charge Apple/Microsoft much more than everyone else. In the past, it seems Google hasn't had a problem with going to court if they thought they could win.

 

[zaydq]

Is anyone really surprised that Motorola is possibly abusing their control over patents? That company has been going down hill since the RAZR.

 

[TuxDave]

If this suit actually goes to court, then its likely we will find out what Motorola is charging it licenses and what it was trying to charge Microsoft and Apple. Unless Google settles out of court. If that happens, then I would think Motorola was trying to charge Apple/Microsoft much more than everyone else. In the past, it seems Google hasn't had a problem with going to court if they thought they could win.

I would be super interested in that. That's the common argument thrown around in FRAND nerd fights and so it would be nice to finally hear the rates that a company tosses around in general.

 

[akugami]

Is anyone really surprised that Motorola is possibly abusing their control over patents? That company has been going down hill since the RAZR.

Well, to be fair to Moto (and other FRAND patent holders), going downhill and abusing their FRAND obligations are two different things.

 

[zaydq]

Well, to be fair to Moto (and other FRAND patent holders), going downhill and abusing their FRAND obligations are two different things.

You're right but it can't be denied as a potential motive. Moto isn't very profitable, and Apple/Microsoft are. Sometimes rules are overlooked for the sake of profitability. I'm also not stating this as fact behind Moto's reasons for possible FRAND infringement, i'm simply speculating.

 

[badb0y]

Lol I love the title but your an idiot.



Warning for mild personal attack
Badb0y, please try to post useful, and non-insulting replies in the future. And I'm not even going to mention anything about the grammar.

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