Well, now it's time for our daily Bloomberg Law Brief, exploring legal issues and the news. It's brought to you by American Arbitration Association, International Trade or Business Dispute Resolve Faster with the International Center for Dispute Resolution, the leader in alternative dispute resolution around the world i c d
R dot org. Today, Bloomberg LA host Greg Store discusses the ongoing legal fight between Apple and qual Calm over the technology that allows most smartphones to send him received data. He speaks with Max Chafkin, a reporter for Bloomberg Business Week. Tell us, tell him, explain to me what Qualcom's great technology is and why it is so important to my
my iPhone. Pretty much any phone you own today relies on this Qualcom technology, which is the technology that allows you to send and receive data through a cellular connection.
So if you're making a phone call or or sending a mobile message, or going on Snapchat, or doing pretty much anything you do in the modern world that is that is using a three G or four G connection, you rely on Basically this this big basket of patents that that Qualcom developed, which which sort of figures out how to squeeze data into radio signals, and to do it efficiently, they charge a a flat royalty on the
on the price of every handset that's sold around the world. Um. And Apple, uh, and and it appears maybe there may be a couple of other companies joining them. Has has basically said enough enough and and they're fighting this uh, this this big legal battle. Yeah. So walk me through the relationship between Apple and Qualcomm. In your story you talk about how they a little while back had a deal. Um. But but but I guess that's that deal maybe breaking down.
So what's what's kind of ingenious or maybe, depending on your perspective, diabolical with with Qualcom's business model? Is they so so they do two things. One is they have the patents and the other is they manufacture the chips that are used in many phones. But they don't they don't. They're not the only manufacturer of chips. They're just the manufacturer of the best chips basically. And whether you buy your chips from Qualcom or from one of its competitors,
you still have to pay that that royalty. And what happened with Apple and this is Apple's contention in in the lawsuit. Um, is that Qualcom used it's basically basic power as a chip manufacturer to force Apple to agree to terms that that it now says our our ownerous. And the thing that changed is basically that Apple got a second supplier. Apple convinced Intel to invest some money to make a competing modem, which which is now in
some iPhones, but not all iPhones. And it was that, um, that sort of buying power that allowed Apple to turn around and and and now um, you know, start negotiating harder, which led to this dispute. That's Max Chafkin, a reporter for a Bloomberg Business Week, speaking with Bloomberg La host Greg Store. And you can listen to Bloomberg Law weekdays at one pm Wall Street Time here on Bloomberg Radio
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