What kind of phone do you have? Whatever your answer, deep down it’s a Qualcomm – the chipmaker invented many of the CDMA communications standards essential to mobile phones, and owns key patents on W-CDMA. Or as you might have heard of it, 3G, and every time you did Qualcomm made a bit more money. They manage this without even owning any factories – instead they own the designs and contract out construction of the actual pieces.
This enviable position has attracted all kinds of legal challenges. In 2005 Nokia, Ericsson, Panasonic and Texas Instruments, NEC and Telefon ganged up and told the teacher, her represented by the European Commission, that Qualcomm was charging too much for its products. For the phone companies this worked about as well as basically suing the sole producer of some of your most vital components could be expected to.
Nokia ended up agreeing to a new fifteen-year agreement with Qualcomm, as well as paying an undisclosed amount, and promptly retracted its complaint to the commission. Broadcom decided Qualcomm’s prices were okay once the latter decided to share some of the profits with the former. Ericcson and NEC saw which way the wind was blowing and gave up. At this point the commission decided the complaint was over.
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