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Qualcomm Launches Defense in the FTC Process Demonstrating Its Mobile Chip Capabilities



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Irwin Jacobs, co-founder of Qualcomm, entered defense of his company on Tuesday.


Vicki Behringer

Today's smartphones would not be possible without Qualcomm. Or at least the chip giant wanted to show on Tuesday during his trial against the US Federal Trade Commission.

The two have been fighting since January 4 in a courtroom in San Jose, California, and are wrapped up with the FTC on Tuesday afternoon against Qualcomm. The FTC has accused Qualcomm of having a monopoly on radio chips, forcing customers like Apple to work exclusively with it and charging excessive royalties on its technology.

On Tuesday, Qualcomm's first chance was to come up with a separate case. The company says the FTC's claim is based on "flawed legal theory". According to Qualcomm, customers are choosing their chips because they are the best and have never stopped providing processors to customers, even when they are fighting for licenses.

  http://www.cnet.com/


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The company called Irwin Jacobs, co-founder, and Durga Malladi, responsible vice president for 4G and 5G operations, to visit Qualcomm's innovations in wireless technology.

Jacobs, considered one of the pioneers of mobile technology, testified to the early years of Qualcomm. The idea of ​​using Code Division Multiple Access (CDMA) technology for phones came to him while driving in San Diego, he said. The company equipped a fan with the technology to show how this could work.

Qualcomm decided to license its technology to earn enough money to do more research and development on CDMA, Jacobs said. The first licensee was AT & T, followed by Motorola, Nokia and others. Qualcomm charged an upfront royalty and then royalties on the sale of CDMA equipment.

"Everything was negotiated," Jacobs said. "We [wanted] were a bit low enough not to hinder progress if it became a commercial product and we wanted it to be used as much as possible worldwide."

The US carriers' voice networks still use either CDMA or GSM two fundamentally different technologies . Sprint and Verizon use CDMA, while AT & T and T-Mobile use GSM with most other countries in the world. Qualcomm has the most important patents related to CDMA, and the technology eventually enabled 3G networks that could also provide data.

"The industry began to realize that it was important to provide mobile Internet access and data communications," said Jacobs. "Essentially, the third generation [network technology] is based on CDMA."

License battle

The FTC filed a lawsuit against Qualcomm two years ago, supported by the chip maker Intel and the iPhone maker Apple. The United States states that Qualcomm has a monopoly on modem chips and has affected competition by trying to maintain its performance. Qualcomm's "inflated" royalties prevented rivals from entering the market, driving up telephone costs and harming consumers facing higher mobile phone prices, the FTC.

The FTC in the trial summoned witnesses from companies such as Apple Samsung, Intel and Huawei and called experts to testify to the damage caused by Qualcomm's licensing practices for the mobile industry. The study has shown how the most important business of tech, smartphones, works, and how suppliers are fighting for dominance and profit.

Carl Shapiro, a professor at the University of California at Berkeley and an expert on the FTC, confirmed on Tuesday that this was the case While Qualcomm is an innovator, that does not mean that it can not be a monopoly.

"Qualcomm should be praised for its technological achievements," said Shapiro. "But … what's really important is that companies that are not that good or that are not on the scale are not hindered from catching, threatening, and challenging the leader."

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He testified that Qualcomm is using its market power and monopoly power over chips to gain an "unusually high amount" for royalties on patents. This increases the costs for the rivals, weakens them as competitors and strengthens the monopoly power of Qualcomm, said Shapiro.

Qualcomm has argued that his broad patent portfolio and innovations justify his fees. CEO Steve Mollenkopf, who took position on Friday defended the company's licensing practice and said his company sells chips to smartphone manufacturers, which is best for everyone involved.

Malladi, who testified on behalf of Qualcomm on Tuesday, emphasized The patents and innovations Qualcomm has sourced on 3G, 4G and 5G cellular technology.

For example, Qualcomm was the only company capable of manufacturing a millimeter-wave 5G network processor from March 2018, the trial's evidence warrant. The technology allows the super fast speeds of 5G, but can only cover short distances and has problems with obstacles like trees or walls. Qualcomm has been working on the technology to solve these problems for phones that are due to run on Verizon and AT & T's millimeter-wave networks this year.

"We are keen to move the needle a lot when it comes to many communication issues that we want to solve," Malladi said.

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