In a testimony last Friday, we have heard new details about the Qualcomm – Apple relationship, the $1 billion incentive Apple received, and what Qualcomm demanded in return.
Qualcomm's Chief Executive Officer, Steve Mollenkopf, testified in front of the U.S. Federal Trade Commission (opens in new tab) and said Apple had asked for $1 billion incentive if it was to swap Infineon modems that were in iPhones at the time, with Qualcomm's.
Apple's alleged reasoning was that swapping modems was expensive and the incentive would 'ease the technical costs'. Apple was also free to pursue other suppliers, but would lose the incentive in that case.
Qualcomm, on the other hand, wanted ensurances that such an incentive would be worth it, so they demanded to be the sole supplier.
“The risk was, what would the volume be? Would we get everything we wanted, given that we paid so much in incentive?” Mollenkopf testified. Qualcomm is being accused of trying to block rivals, such as Intel, which Mollenkopf denied.
Antitrust regulators are saying this is just another in a string of anticompetitive moves Qualcomm has been doing.
Apple's supply chain executive Tony Blenvis had also testified that day, and said Apple usually has between two and six suppliers for each of the 1,000+ components their smartphones have. Apple stopped adding Intel's modems into their iPad Mini 2 because they didn't want to lose Qualcomm's incentive.
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