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The Ironic Weirdness of Apple and Intel vs. Qualcomm | Tech Buzz

I’m not remotely non secular, however just lately it has grow to be more durable and more durable to disregard that issues have grow to be extremely ironic of late — as if a divine being with management over the world determined to prank us.

For instance, take President Trump. During the marketing campaign, all the things he made enjoyable of others for doing — together with consuming water badly, taking part in an excessive amount of golf, slacking off and slurring phrases — he has executed himself, in wonderful residing coloration. Also, he seems to be on a path that ultimately will get him locked up. Given his “lock her up” theatrics at rallies, that will be extremely ironic.

Kind of makes you wish to stroll right into a church and yell, “OK, haha, very funny — stop it already.”

Thanks to the Trump administration, I’m now sensitized to irony (in actual fact, I’m anticipating it — thus the “lock him up” prediction), and I’m noticing a number of it within the know-how phase, the place I reside.

For occasion, Brian Krzanich, after supporting the abuser aspect within the Gamergate scandal, introduced he was going to be an enormous advocate for variety. Then he managed to power out or demote just about each feminine senior govt who reported to him. No one appeared to say squat about his reverse-diversity variety program.

However, probably the most fascinating and screwy factor I’m presently watching is the litigation involving Apple and Intel vs. Qualcomm. It form of took a Twilight Zone spin final week because the EU
charged Qualcomm for one thing Intel was well-known for — locking out opponents.

In Intel’s case, it was locking out AMD; in Qualcomm’s, it was locking out Intel. So is that this “what comes around goes around” irony, or one thing even stranger. I’m going to argue the latter, so buckle up — I believe we have simply taken a left flip into the Twi… er, Irony Zone!

I will shut with my product of the week: an attention-grabbing new set of noise-canceling headphones for, get this, business.

You Do Not Partner With Apple Twice

“You do not partner with Apple twice” appeared to grow to be a standard saying after Andy Grove, Intel’s most iconic CEO, went off the rails about his cope with the company. It was not clear to me what Apple did to Intel and Andy, however he actually hated the agency and, notably, Steve Jobs.

Steve did have a status for screwing folks over. He supposedly lower certainly one of his closest buddies out of Apple — the man had saved his life years earlier in India — for daring to help Steve’s then-pregnant girlfriend, whom Steve had lower off for refusing to have an abortion. (That possible was the rationale Bill Clinton didn’t observe via along with his promise to make Steve the Secretary of Education.)

Then there was his previous companion Steve Wozniak, who reportedly
truly cried when he found out his previous pal cheated him.

In any case, Apple has the status for screwing over companions and, at the very least based on Andy Grove, actually screwed over Intel.

So Intel partnering with Apple to go after Qualcomm form of jogs my memory of
The Scorpion and the Frog, with one distinction: In the case of Intel and Apple, the frog and scorpion miraculously survived the primary crossing — however the scorpion then convinces the frog to do it once more. Having been stung as soon as, Intel ought to have no illusions about Apple’s true nature.

Why Apple Will Screw Intel

If you have a look at what Apple is making an attempt to do, it’s making an attempt to power Qualcomm to decrease its worth to Apple by a big quantity. The smartphone market is starting to seem like the PC market did a number of years again — slowing development, elevated competitors — and there’s a tone of worth stress.

However, Apple’s valuation relies on exceptionally excessive revenue margins and income development. Apple can’t appear to promote extra merchandise (the iPod is all however gone, the iPad is struggling, and the Apple Watch has fallen properly wanting expectations), so it should lower prices.

Apple initially tried to make use of Intel as a competitor to drive down Qualcomm’s costs, however Intel’s know-how was so inferior that Apple
determined to cripple Qualcomm’s parts in iPhones in order that customers wouldn’t determine they have been being screwed. Given that technique didn’t work, Apple moved to litigation, arguing that Qualcomm’s pricing was unfair.

Now, if Apple succeeds, Qualcomm will probably be compelled to drop costs — however Qualcomm nonetheless would have the higher know-how. So, ask your self this, will Apple proceed to purchase inferior Intel elements, or flip to purchasing Qualcomm elements at close to the identical worth? If the fee have been the identical, why wouldn’t it proceed to purchase from Intel, given the Intel know-how isn’t aggressive?

Intel’s Head Fake

Why is Intel even on this? It is
not as if it actually has any place in smartphones anymore. The whole technique of constructing the modems within the first place was to raised place its complete answer (together with processor) in opposition to Qualcomm’s Snapdragon.

That didn’t pan out, although, inflicting Intel’s board to hunt a change in CEOs. Intel’s processors since have been compelled out of the market, leaving Apple shopping for Intel’s modems because the agency’s solely main presence. However, as famous, Intel was speculated to be promoting processors, not modems, and whereas these Apple gross sales enable Intel to argue it’s in cellular, it’s really not, provided that its processor efforts have been dropped in that phase.

Apple designs its personal processors on this area and is utilizing Intel solely to drive Qualcomm’s costs down. That is tactical, and as soon as this litigation is over, win or lose, Apple will not want Intel anymore. This short-term false notion is hiding an excellent larger downside, although.

Intel’s Bigger Problem

That larger downside is that Apple has signaled that it will definitely desires to maneuver iOS to laptops, and there’s no signal it’s going to accomplish that on Intel. In reality, Microsoft, taking a look at this similar potential menace has collaborated with Qualcomm to create a brand new class of laptop computer — the
Always Connected PC.

If profitable, Microsoft’s effort may power Intel processors off its laptops and blaze the path for Apple to observe. Intel, quite than increasing into cellular, now’s taking a look at a future the place the most important a part of its PC gross sales could possibly be lost to ARM, each on Microsoft and Apple platforms.

This is much more problematic on Windows, as a result of Microsoft presently is run by Satya Nadella, who is among the prime cloud advocates within the world, and the chance that future variations of Windows will probably be hosted is due to this fact a close to certainty. With Windows 10 S, Microsoft has drifted towards a thin-client mannequin, which is extra preferrred for ARM than x86.

So, as Intel screws round making a misunderstanding that it’s aggressive on cellular, it’s at very actual danger of shedding the PC market — not simply laptops, both.

Apple Qualcomm

Now, Apple already had a sweetheart deal from Qualcomm. Its quantity gave it a elements price benefit over most opponents. (Volume licensing offers steeper reductions the extra you order, and few order as many elements as Apple.)

However, if Apple’s litigation have been to succeed, Qualcomm would have to chop its costs to everybody and could be lower than happy with Apple, which means that some a part of that benefit, if not all of it, would go away.

Because of the character of the Android ecosystem (extremely price-competitive) all of Apple’s opponents should cross on financial savings to clients via worth decreases, so this may put extra worth stress on Apple to decrease costs.

So despite the fact that profitable would imply Apple’s prices would go down, it could outcome solely in a short-term margin benefit till opponents repriced. Apple then could be in worse form than when it began, as a result of its already-problematic finish person worth delta would grow to be way more apparent.

Wrapping Up: The Weirdness

So, Intel is masking up that it has no sustainable cellular place as its PC place erodes catastrophically, and Apple is executing a method that can depart it in worse form — however that isn’t even the weirdest half.

I promised you actual weirdness, and right here it’s. What Apple and the European Commission have alleged is that Apple obtained an added low cost if it agreed to not use anybody else’s modems. As I discussed earlier, utilizing this tactic is one thing Intel as soon as was well-known for, and what people appear to overlook is that Apple has Intel’s previous chief counsel working as its chief counsel.

So, who do you assume it is extra prone to have come up with the thought? Apple, whose prime lawyer embraced it as a daily technique at his prior job? Or Qualcomm, which has no recognized historical past of utilizing such a tactic?

It seems to be as if Apple bought the thought of those clauses to Qualcomm after which turned in Qualcomm to the EC for having them. It smells like entrapment blackmail, and it’s clear that Qualcomm isn’t amused. This is why corporations don’t do business with Apple twice.

Netting this out: Apple resides on excessive margins and executing a method that ought to collapse these margins; Intel is collaborating with a agency that has screwed it prior to now and that it is aware of will screw it once more: and Qualcomm, a agency run by attorneys, is being brutalized by attorneys. I believe that’s irony cubed.


I’m form of a Plantronics junkie — I should be, as a result of I’m as much as my ears in its merchandise. They are all completely different merchandise, although. For occasion, I have one set of headphones for my desk, one other for understanding, and but a 3rd set for after I travel (which I have lost twice). With the brand new
Voyager 6200 UC, Plantronics has created create one set of headphones meant for use in all three implementations.


Plantronics Voyager 6200 UC Bluetooth Neckband Headset

Plantronics Voyager 6200 UC


The around-the-neck design retains them small and moveable, whereas placing the burden and complexity in your neck — not in your head or in your ear. The 6200 has an up to date array microphones with noise cancellation, so it really works as a phone headset. It has earbuds with noise cancellation, so it really works for music (in a fitness center or, particularly, on a aircraft). It has respectable battery life (9-hour speak), and it’ll pair with eight gadgets, so you should use it with two cellphones, your pill, your workplace telephone, and your home telephone, and you may nonetheless have further capability for 3 extra gadgets.

A brand new characteristic known as “dynamic mute alert” reminds you that you just have mute on in case you out of the blue begin speaking with mute on (not that I ever do this…). At US$299 it is among the dearer merchandise on the market, but when it actually replaces three different units of headphones (certainly one of which prices greater than that, in my case) it’s a deal.

I believe the Voyager 6200 UC headphones anticipate a time when you’ll put headphones on once you get up and take them off once you fall asleep. Given its around-the-neck design, I’m much less prone to lose this headset — and that alone would make it my product of the week.



Rob Enderle has been an ECT News Network columnist since 2003. His areas of curiosity embody AI, autonomous driving, drones, private know-how, rising know-how, regulation, litigation, M&E, and know-how in politics. He has undergrad levels in merchandising and manpower administration, and an MBA in human assets, advertising and marketing and pc science. He can also be a licensed administration accountant. Enderle presently is president and principal analyst of the Enderle Group. He previously served as a senior analysis fellow at Giga Information Group and Forrester. Email Rob.




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