Apple vs. Qualcomm: Apple’s Dangerous Gambit
Apple and Qualcomm are at war, but Apple is dangerously close to looking like the bully who complains about his victim’s violence because the bully’s knuckles are bloody. “Look what that guy’s face did to my hand!”
The base cause of the dispute is that Apple has been unable to increase revenues by growing volume and has had to resort to increasing prices instead—and their efforts to increase margins have largely resulted from pounding their suppliers to reduce costs. These suppliers mostly folded with Qualcomm being the most visible exception. So, while complaining that Qualcomm had too much power, Apple has effectively cut off a massive amount of Qualcomm’s revenue, showcasing what looks like an excessive amount of power by Apple instead. Fortunately, Qualcomm is more diverse in terms of revenue sources so they are surviving this impressively well but that also points to Apple’s lack of revenue diversity (only one of their diversity problems) as a problem.
Add to this claims that Apple must use Qualcomm’s technology while Apple is allegedly designing out that same supposedly critical technology and Apple has the beginnings of what could be a significant credibility problem in the courts. But the real issue is that Apple is increasingly putting iPhone users in the cross hairs of their actions and that never ends well.
Let me explain.
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NOTE: This column was originally published in the Pund-IT Review.