Apple vs. the Wireless Industry

The battle between Apple and Qualcomm is heating up as the U.S. FTC investigation and legal battles in China, Germany, and the U.S. go to court over the next few months.But in all the rhetoric and news coverage, it’s easy to forget the real issue and what’s a stake. The real issue is the intellectual property (IP) licensing model and the associated licensing rates of the wireless industry. And, what’s at stake is the rate of investment and innovation.This is not a battle solely with Qualcomm, but with the entire wireless industry. As one of the leading innovators and IP licensors, Qualcomm is neither the first nor the last to be an Apple target.Patents represent intellectual property. In many cases, IP is held proprietary as a competitive barrier and not licensed to other entities. If a company infringes on the IP, the holder may seek compensation or other actions through legal means. In some cases, IP holders choose to offer the IP to anyone without compensation. This is often done to establish an open-source hardware or software standard. And in other cases, the IP holder chooses to license the IP to a specific part of the value chain or possibly all parts of the value chain.In the case of semiconductors, IP is typically licensed from the IP holder to the semiconductor vendor. In the wireless industry, however, IP is licensed to the ODM or OEM — essentially those building the end device whether that be a smartphone or a car.