WEBVTT - Bloomberg Law Brief: Apple & Qualcomm Feud (Audio)

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<v Speaker 1>Well, now it's time for our daily Bloomberg Law Brief,

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<v Speaker 1>exploring legal issues and the news. It's brought to you

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<v Speaker 1>by American Arbitration Association, International Trade or Business Dispute Resolve

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<v Speaker 1>Faster with the International Center for Dispute Resolution, the leader

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<v Speaker 1>in alternative dispute resolution around the world i c d

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<v Speaker 1>R dot org. Today, Bloomberg LA host Greg Store discusses

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<v Speaker 1>the ongoing legal fight between Apple and qual Calm over

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<v Speaker 1>the technology that allows most smartphones to send him received data.

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<v Speaker 1>He speaks with Max Chafkin, a reporter for Bloomberg Business Week.

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<v Speaker 1>Tell us, tell him, explain to me what Qualcom's great

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<v Speaker 1>technology is and why it is so important to my

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<v Speaker 1>my iPhone. Pretty much any phone you own today relies

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<v Speaker 1>on this Qualcom technology, which is the technology that allows

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<v Speaker 1>you to send and receive data through a cellular connection.

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<v Speaker 1>So if you're making a phone call or or sending

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<v Speaker 1>a mobile message, or going on Snapchat, or doing pretty

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<v Speaker 1>much anything you do in the modern world that is

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<v Speaker 1>that is using a three G or four G connection,

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<v Speaker 1>you rely on Basically this this big basket of patents

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<v Speaker 1>that that Qualcom developed, which which sort of figures out

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<v Speaker 1>how to squeeze data into radio signals, and to do

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<v Speaker 1>it efficiently, they charge a a flat royalty on the

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<v Speaker 1>on the price of every handset that's sold around the world. Um.

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<v Speaker 1>And Apple, uh, and and it appears maybe there may

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<v Speaker 1>be a couple of other companies joining them. Has has

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<v Speaker 1>basically said enough enough and and they're fighting this uh,

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<v Speaker 1>this this big legal battle. Yeah. So walk me through

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<v Speaker 1>the relationship between Apple and Qualcomm. In your story you

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<v Speaker 1>talk about how they a little while back had a deal. Um.

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<v Speaker 1>But but but I guess that's that deal maybe breaking down.

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<v Speaker 1>So what's what's kind of ingenious or maybe, depending on

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<v Speaker 1>your perspective, diabolical with with Qualcom's business model? Is they

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<v Speaker 1>so so they do two things. One is they have

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<v Speaker 1>the patents and the other is they manufacture the chips

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<v Speaker 1>that are used in many phones. But they don't they don't.

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<v Speaker 1>They're not the only manufacturer of chips. They're just the

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<v Speaker 1>manufacturer of the best chips basically. And whether you buy

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<v Speaker 1>your chips from Qualcom or from one of its competitors,

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<v Speaker 1>you still have to pay that that royalty. And what

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<v Speaker 1>happened with Apple and this is Apple's contention in in

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<v Speaker 1>the lawsuit. Um, is that Qualcom used it's basically basic

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<v Speaker 1>power as a chip manufacturer to force Apple to agree

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<v Speaker 1>to terms that that it now says our our ownerous.

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<v Speaker 1>And the thing that changed is basically that Apple got

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<v Speaker 1>a second supplier. Apple convinced Intel to invest some money

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<v Speaker 1>to make a competing modem, which which is now in

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<v Speaker 1>some iPhones, but not all iPhones. And it was that, um,

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<v Speaker 1>that sort of buying power that allowed Apple to turn

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<v Speaker 1>around and and and now um, you know, start negotiating harder,

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<v Speaker 1>which led to this dispute. That's Max Chafkin, a reporter

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<v Speaker 1>for a Bloomberg Business Week, speaking with Bloomberg La host

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<v Speaker 1>Greg Store. And you can listen to Bloomberg Law weekdays

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<v Speaker 1>at one pm Wall Street Time here on Bloomberg Radio

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<v Speaker 1>and now. Among the top legal stories from Bloomberg Law,

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<v Speaker 1>Oscar winning movie mogul Harvey Weinstein has taken a leave

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<v Speaker 1>of absence from his production company over sexual harassment allegations.

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<v Speaker 1>According to The New York Times, Monstein has reached at

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<v Speaker 1>least eight settlements with women claiming that he harass them.

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<v Speaker 1>Actress Ashley Judd was among those saying she had been

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<v Speaker 1>harassed and us this morning's Bloomberg Law Brief. You can

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<v Speaker 1>find more legal news at Bloomberg law dot com and

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<v Speaker 1>Bloomberg Bienna dot Com. Attorneys will find exceptional legal research

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<v Speaker 1>and business development tools there as well. Visit Bloomberg law

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<v Speaker 1>dot com and Bloomberg Benna dot com for more information