Tech Titan Clash: What Apple and Qualcomm Are Fighting About

Back in 1990 when Qualcomm was a start-up, it was spending so much on a new approach to cellular communications that it struggled to make payroll.

So the San Diego firm began peddling its 50 patents to mobile phone and network gear makers such as Motorola and Alcatel-Lucent. It negotiated upfront fees to fund research, as well as an ongoing patent royalty should its technology ever be used in their products.

Companies did use Qualcomm's technology. And in a big way.

Qualcomm's inventions are now under the hood of every 3G/4G smartphone. They power faster download and upload speeds, have reduced static and interference, given batteries a longer life, made auto lock and airplane mode possible, and the list goes on. Its patent licensing arm is a $7.7 billion juggernaut -- 130,000 patents issued and pending strong. Its licensing business model helped cement Qualcomm as the research and development engine for the mobile industry.

And now Qualcomm is in Apple's cross-hairs over how much it charges for its inventions. In January, Apple sued Qualcomm, cutting off royalty payments. Among other things, it claims Qualcomm is illegally gouging Apple on patent fees and collecting royalties on innovations that it had nothing to do with.

Anti-monopoly regulators in the U.S. and South Korea allege Qualcomm has concocted a scheme that leverages its dominance as a cellular modem chip supplier to overcharge for patents and hamstring competitors. Qualcomm believes these charges were instigated by Apple.

Monopoly regulators in Europe and Taiwan are investigating. Tech giants Intel and Samsung have lined up behind Apple. So have technology trade groups that count Google and Microsoft as members.

Qualcomm counters that its fundamental cellular technologies breathe life into mobile phones. Without them, a $700 iPhone is a glorified iPod Touch.

For this technology that enables high speed, ubiquitous connectivity, Apple was paying on average...

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