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Qualcomm allegedly bribed Apple into not making a WiMAX iPhone

Qualcomm allegedly bribed Apple into not making a WiMAX iPhone


Sorry, Intel and Sprint!

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I have no idea where this image came from but it’s in our system so here it is.

The FTC filed a blockbuster lawsuit against Qualcomm today, arguing that the chipmaker used its baseband processor patents to illegally force competitors out of the market. (The short version: the FTC says Qualcomm wouldn’t sell modems to any company that didn’t also agree to pay Qualcomm patent royalties on phones that used modems from other suppliers, which the agency refers to a the “no-license-no-chips” policy.)

Anyway, a big part of the complaint has to do with Apple, and the fact that Qualcomm spent a lot of time working and reworking its deal with Cupertino to remain the exclusive provider of modems in the iPhone. Among the moves it made? The FTC says that in 2007, Qualcomm agreed to refund some of Apple’s patent royalty payments if Apple agreed not to make a WiMAX iPhone.

Here’s the FTC’s complaint:

Under a 2007 agreement, Qualcomm agreed to rebate to Apple royalties that Qualcomm received from Apple’s contract manufacturers in excess of a specified per-handset cap. Qualcomm’s payment obligations were conditioned upon, among other things, Apple not selling or licensing a handset implementing the WiMax standard, a prospective fourth-generation cellular standard championed by Intel and opposed by Qualcomm. 

WiMAX is dead now, but in 2007, this was a Big Deal: Sprint had just made an enormous bet on beating the market to 4G speeds by deploying a WiMAX network in 2008, ahead of LTE, and Intel still had an opportunity to make a mark in mobile. Paying off Apple allowed Qualcomm to keep the iPhone off a faster network until LTE was ready — and in the process effectively kneecapped Sprint, which invested billions into a network that couldn’t support the future iPhone roadmap.

kneecapping sprint’s wimax network

Ten years later, and Sprint has switched to LTE but still isn’t in great shape — T-Mobile CEO John Legere just referred to Sprint as “exploding” and hinted that he might like to take it over. Intel’s not doing much better when it comes to mobile, although the company just managed to get some modems in the iPhone 7. But it’s interesting to think about what might have been if the first 4G iPhone had been a WiMAX model on Sprint, while every other network was still running 3G.