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Apple Sues Qualcomm For $1 Billion, Is There A Bigger Issue Here!

“The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.” Source: Apple

A couple of years ago, my team worked a long night debugging our product for a CES show. I picked up the phone and called a small company in Zurich, Switzerland called Faceshift; we were using their software for face recognition, and thought their approach was not only best in market, but would transform the technology applications in that space. To my pleasant surprise, the CEO and founder answered the phone and proceeded to cordially walk me through the technical issue we were having. Months later the company was acquired by Apple, and it became more difficult to access the team or the technology application development.

I assumed that small players or startups were simply left out of many technology and innovation partnerships because companies don’t have the bandwidth to cater to a small company or Startup.Which brings me to Qualcomm. Working with a small company now, I recently inquired with Qualcomm about procuring the same chip that is in the Galaxy Gear S3; however, the royalties were unreasonable, and the upfront licensing cost was not only beyond reach for a start up but also that of most small companies I suspect. As their lawsuit demonstrates, even Apple finds Qualcomm’s practices of charging large amounts for licensing fees — mostly for the legacy innovation of others — too expensive, Apple-Expensive.

This battle of the behemoths has exposed a bigger issue: through their monopoly-like grip on some technologies and licenses, and with their legal budgets; are large companies like Qualcomm and Apple having an adverse effect on a reasonable access to innovation for everyone? and is the barriers to entry and delays, is ultimately hurting themselves and the economy in a fundamental way:

There is an unwritten rule for open competition, specifically in the U.S., that we should be proud of and embrace. This especially applies if you are benefiting from a legacy of licenses and innovation, and from others’ work. And it is particularly important for participants in the information and knowledge community to exercise its collaboration muscles, or risk the downsides of atrophy.

For example: I’m a big fan and beneficiary of open source software, and as our team uses machine learning algorithms and open source libraries, we will contribute back. It is preservation of the species: if I give you what I know, you might do something I didn’t think of, and we will both benefit from this open competition-collaboration. Compound that by the exponential growth of open source developers, and the whole industry benefits, technology moves ahead much faster and ultimately the economy experiences GDP growth.

These companies’ practices, if by their cultural inertia, benign neglect, or deliberate strategy, may not be doing themselves or the American economy any favors. Although I’m a fan of both Apple and Qualcomm, I find the feud and legal statements a bit ironic, and overall concerning.