Apple, Qualcomm legal battle heats up in China (The 3:59, Ep. 501)
Apple, Qualcomm legal battle heats up in China (The 3:59, Ep. 501)
2018-12-10
welcome to the 359 on Roger Chang I'm
Joanie sauceman apple may have hit a
legal snag in China Qualcomm said this
morning that a Chinese Court has ordered
a ban on iPhones in the country apple
says it remain I thought made available
in the country and called this a
desperate move by a company whose legal
practices are under investigation by
regulators around the world
lots of sniping between the two clearly
no love loss here keep in mind like
there they are stuck in this massive
legal battle right now where Apple has
refused to pay Qualcomm for a certain
intellectual property related to the
modems that Apple used to use no longer
use them but this is a serve the latest
in this ongoing drama between these two
tech titans right yeah China is
important to Apple but it's not like
it's important but it's not the it's not
their biggest market it's not but it
increasingly I think it will be does it
is it the way that works out it's like
I'm not the biggest market but it's the
most growth yeah yeah yeah the sheer
size and the brand appealed Apple and I
think one of the rare US companies that
really has been successful out there
yeah so it would be a blow if they lost
the the right that said you know I've
covered a lot of these these bands on
these product bands usually what happens
is the other company goes in and files
an appeal suspends the order and then
they kind of work it out in the courts
so I guess that's what's that's what
will happen yeah a little worried if
Qualcomm came out really aggressively
this morning like no phones what we sold
here and then Apple said wait a minute
that's not necessarily the case right so
we'll see how this all shakes out
speaking of Qualcomm Shara Tipton and
Jessica's old cord are out with this
story wrapping up last week's Snapdragon
Tech Summit bottom line the sheer amount
of 5v news that there was a lot coming
out last week was an attempt to
destabilize or a road Apple's position
in the wireless world basically implying
that if it's late to 5g you know it's
gonna be behind everyone else and
Qualcomm's first 5g so they're they're
in a great position it feels like the
Commish you know sticking that knife in
and twisting it a bit yeah yeah there
was a lot of there were a lot of
references to this other company that
they would not name during the event
and and it was just kind of comical to
see how they would like individual one
like company a yeah yeah the kind of
shade they were throwing on even minor
things I'm just telling earlier like
they the embrace of a new photo format
that Apple's been embracing like Apple
had to say well it's it's not just this
one little feature that this other
company talks about it's about all these
other things so it's if you're the no
you're clearly you know hearing all the
shade being thrown so do you think that
it actually matters that Apple that
Qualcomm and it's phones will have 5g
support before Apple do you think it
really matters not next year I think if
they're a year late I don't think it's
the end of the world
I mean clearly Apple is facing its own
challenges with with iPhone sales
potentially in decline but I think most
people are gonna stick to they're gonna
stick to the iOS that they're used to
and so for a lot of people 5 G's not
gonna make that yeah all right lastly
check out Katie Collins year review
piece on how the EU has made its
authority known to Silicon Valley
companies from gdpr to massive fines on
Google the EU hasn't been afraid to
wallet companies like Facebook and
Google yeah it's it's been kind of a
tough year for the biggies so I was at a
conference last week and one of the
things that somebody brought up there I
thought was interesting was that in a
way it makes sense that Europe's don't
like hitting so hard these companies
Europe isn't like there's no Mark
Zuckerberg wings of hospitals in Europe
yes you know there's no like there's
they get all of the downsides of like
the Facebook's and the googles and all
these other big tech titans but they
don't get a lot of the upsides either
it's true they're not I guess it's not
worth not donating rain Paris right yeah
and that's where I mean I think that's
why the u.s. is definitely that's a
really good reason why it's dragged its
feet on privacy regulations I'm really
holding these guys they're you know fire
speaking of Google sundar Pichai will be
testifying for Congress tomorrow for
full coverage on that check us out on
SEANET I'm Roger Jiang I'm Joni Saltzman
thanks for sitting
so in regards to cinnabar Chai's
judiciary Commission testify testify
testify testimony testimony thank you
five this is why I'm pushing the buttons
and not talking that is actually going
to push our show back tomorrow so now is
a good time to mention that will be
going late tomorrow and it's going to be
completely contingent on when that wraps
up so we'll actually be streaming the
entire hearing on Sina on YouTube and
livestream and periscope and maybe
twitch I'm not even sure at this point
so if you want to see how bad pachai
gets grilled this is the place if you're
looking for the 3:59 just stay tuned
we'll try to keep you updated on Twitter
as far as when we're going to be able to
pick up but it's going to have to be
post the hearing because I can't do two
shows at once and yeah that'll be the
official like post show kind of recap
about what goes down so if you want the
abbreviated version just come back and
find us later in the afternoon before we
jump into the questions I have a bit of
trivia again I love digging these little
little nuggets up today December 10th
would have been Ada Lovelace birthday
the Countess of Lovelace the English
mathematician and writer chiefly known
for her work on Charles Babbage's
proposed a mechanical general-purpose
computer the analytical engine I thought
that was a neat little tidbit to include
today I did homework alright so might as
well go ahead and jump right into the
chat and start pulling questions from
Tiger X 966 this is a comment more than
a question they need to settle so Apple
can get apt xhd and low latency codecs
for better Bluetooth audio and I think
we're all on board of that since we're
never gonna see the headphone jack come
back yeah that's true you know when I
was down in San Diego they showed me
this or the difference between the audio
codecs that Qualcomm uses versus sort of
standard Bluetooth and it does make a
pretty big difference I don't know I
feel like the ship has kind of sailed
for Apple Qualcomm using equipment using
each other's equipment for a little
while this law so you can drag on for a
long time and it's getting I feel like
it's getting increasingly bitter just
like is these shots are being taken here
and it's the more these headlines come
out less likely it is that they'll know
subtle doesn't seem like they're
settling anytime soon speaking of
settling Tiger X also wants to know did
Apple ever pay the man they stole the an
emoji trademark from oof lots of shade
coming from Tiger X yeah where you been
I don't know that's I did kind of didn't
even realize that yeah sorry I don't
think I don't I don't know if they did
all right so let's take a real one now
thanks again Tiger X you're making it
interesting today Timothy do will this
ban affect the iPhone tennis max in
China which has two physical sim slots
assuming it actually the ban takes
effect at all yeah it could be an idle
threat right yeah to the out to my
earlier point I think that the ban is
just gonna be will likely be suspended
until they kind of figure things out in
court but I believe it applies to all
models of the ten so ten tennis max
tennis okay I think it applies to all
models of iPhone from like six through
ten got it which is like all the ones
that they actually sell right right yeah
it's a pretty broad sweeping threat
pretty ballsy move on their part if I do
say so they make the threat I think they
were just publicizing the result of this
case yes exactly they didn't in ordered
the band Qualcomm was trumpeting it
right was kind of dancing with glee and
it was a really so the patents they used
to accuse Apple of infringing upon their
technology are relatively new one of
those to adjust and reformat the size
and appearance of photographs so it's
fairly general manage applications using
a touchscreen when viewing navigating
and dismissing applications on their
phone those are the three patents it is
a little weird that these pads are
coming up right now
Apple made the point that these are
relatively new complaints considering
that this stuff is all like kind of like
default baked into smartphones now so
it's it's a little unusual that they're
just bringing up with these pens all
commas patent troll yeah so let's talk
about Qualcomm and they're devout
developmental habits here Tim also asks
I understand there's a need for hardware
upgrade but this Qualcomm need to grade
their chip Snapdragon eight
45:36 cetera every single year why don't
they just focus on a generation chip
instead of a yearly upgrade I don't even
know where to begin
and why do they why do they focus every
single year like a car dealership rather
than focusing on a generation like an
operating system Oh like having just
like one chip for all phones or not
necessarily he's saying the upgrade
still roll but I don't know maybe it's
just I'm picturing in my head instead of
buying the 1997 Honda Civic and then the
1998 Honda Civic buying the generation 3
Honda Civic and then in 2001 rolled out
and you get the generation for Honda
Civic yeah it makes more sense to I
guess equate it to how operating systems
kind of roll out there not every single
year necessarily pretty much every year
like Microsoft chips it out twice a year
sometimes that's a good point I guess
I'm really bad at creating these
analogies I'm not really sure where he's
trying to go with that but I kind of
like you could clarify I mean I would
just say that if you're asking about why
they don't just do like one chip for all
phones like and have that be like a
generation one chip versus a generation
two chip it is kind of to Brian's car
dealership analogy like there's like the
Ferrari chip and then there's like a
Honda Civic chip and like if you're
paying 100 bucks per phone you're using
the Honda Civic chip you buying an
iPhone or not an iPhone sorry a Galaxy S
nine that's gonna be the Ferrari chip so
there I mean there's different levels of
chips for different prices and that's
that's kind of why they they break it
out that way
but instead of that why not something
like a Windows XP Windows Vista 710 I
guess it's really just coming down to
now in clay Chur isn't it like you know
I think it's being able to like break
out the different prices allows handset
manufacturers to change the pricing on
their devices or have a portfolio of
both cheap and expensive phones so if
everyone's using the exact same chip
then there's less price differential
okay I think I understand what you're
saying like you can't get all the super
high-end it's like like that would be
fantastic if like the person paying 100
bucks would get the same features as the
person paying a thousand bucks for
theirs
but that's just not how the world works
it'd be awesome we could all have
Tesla's for free yeah that works too
economically that probably doesn't work
too well but yeah that's kinda the same
logic they're trying to like break out
the pie incentivize ya got it
okay here's one from P and prom in mom P
tint mom got it well it's time for Apple
to start building their phone in the
states do we think that's even remotely
possible because it's an interesting
thought no it's possible in a limited
scale we had to keep in mind like Apple
sells how many phones per quarter like
50 60 million let's find out it's a lot
though right so that that kind of volume
requires a lot of things requires
massive facilities requires a lot of
investment and requires a lot of labor
and fairly skilled labor and in China
there I mean there actually is a pretty
large supply of instantly skilled labor
there that's less the case in the US
where it's harder to find Motorola tried
this a few years back with one of their
moto phones I can't remember which one
but it was you know they built they made
a big deal about making a factory built
in factory in the u.s. having these
phones built here they scrapped that
plan after a couple years because it
just became too cost-prohibitive like it
just it's too expensive it's a shame
because I would have been potentially
wonderful house how many iPhones are
sold so in quarter and q1 for Apple
which is usually their happiest quarter
right yeah yeah so q1 for Apple in the
most recent there's finished there last
year and he won of that year they sold
77 million iPhones and a quarter and a
quarter and then the most recent quarter
not the biggest quarter they sold almost
47 million yeah so like that cheer mount
of volume like it just at least right
now it can't be done I mean you could I
think if you had like a long-term plan
like a 10-year plan in terms of building
out the infrastructure for it but Apple
can do an apple and and the other issue
is given sort of the higher labor cost
here in the US hire just hired cost in
general like I kind of did sort of the
back of
love math on that like your iPhone would
be at least twice as much if not more if
it was built in the u.s. bummer
yeah rolling back to that thought
process of the development and Qualcomm
Alan max Diaz points this out logic
would be if development of the hardware
and the software was unified it should
have lower cost because it is its own
it's self-contained it's the outsourcing
by payment of royalties that should be
more expensive I mean that's a pie in
the sky dream is it not yeah yeah I mean
part of the issue with apples they do
have their serve own and and system
right they control the hardware and
software and they don't actually they
don't use Qualcomm processor they just
take the modem the antenna and that's
just one component it's not like Android
phones or they take the Qualcomm
Snapdragon processor and like all the
the intellectual property that goes
along with it all the features like fast
charging Apple doesn't take as much and
so they argue that all the money that
they're paying Qualcomm for for
innovations they've developed themselves
and so they feel like it's not justified
to pay that that high premium gotcha I'm
not taking a site on that I mean it's up
to the courts really to decide you know
what how much Apple should pay but
that's sort of the crux of the dispute
here's another one from Tim will there
be new tech like a new version of
Bluetooth infrared light on the remote
controllers is still going strong just
new tech in general well new Bluetooth I
think oh yeah I mean bluetooths
constantly advancing I mean I'm not I'm
not an expert at Bluetooth but I know
there are revisions and new versions
that come out out once a year at least
so yeah okay what do we think about AMD
getting into the mobile cellular modern
industry we were asked this last week to
I don't think they have any mobile
admissions as far as I can tell they're
a processors for servers and desktops
laptops and from where I stand their
chips are way more grass more
competitive now they're there actually
more powerful than the Intel ones but
I'm not sure they're in phones or if
they even want to be in phones it's it's
a tough market I guess let's switch
gears over to the European Union topics
at hand what is some of the fallout we
think we're going to see in 2019 now
that so much is unfolded this year last
year and a half-ish following Cambridge
analytical and everything else what at
what are some of the actions that we're
going to see what are some of the
repercussions with with all the the
major players like you said Facebook
Google the big boys well I think the
article 13 of the copyright directive is
the next like gdpr and not so much
Cambridge analytical because that was a
scandal that's sort of centered in
Europe rather than policy that's
centered in Europe on it but that's the
next kind of wave where where
legislation centered in Europe but has
global effect is going to sort of stem
from and so that should start happening
before we might start seeing
implications of that before the end of
this year and definitely depending on if
it gets enshrined in law and just a few
like what it's the idea that both in
America in the US and in Europe there
have since the dawn of the consumer
internet been safe harbor provisions
against copyright which means that any
tech company isn't held responsible
liable for copyrighted content that's
uploaded onto their service that they
don't have to be responsible for what
every single one of their users uploads
and so people argue that you know when
Facebook and Google and other companies
like that are the most powerful
companies in the world they don't
necessarily need that sort of say if I
were provision anymore it was designed
at a time when the internet needed to
protect these companies so they could
become more powerful but then on the
other side people say that the way that
this legislation has been written it's
too vague and that no even Google which
already has a system in place to sort of
kind of deliver on the things that it's
asking them to do they still don't do it
well enough that like the idea is that
there'd be a lot of content that would
be defect so de facto censored whether
right
wrongly depending on how well they're
able to filter copyrighted stuff right
they've come for our means is what
you're saying that's what a lot of
people are putting it as like people
like to talk about memes because
everybody loves memes and it's true in a
way but like it has implications for
video and for music and blah blah blah
anything that's a copyrighted thing I'd
be interested to see any proposals that
they put forth as far as how to automate
and regulate that process because you
know that's gonna be their first goal is
to try to take the human interest out of
it
because that makes the most amount of
sense and how that's going to backfire
on digital content creators I put money
on it that they didn't plan a system
where we could get flagged for
repurposing our own content mark my
words
are you talking about legislators are
you talking about companies let's go
with companies for now I think you start
with those companies like if you like
put in like their algorithms yeah like
they don't miss read certain condo oh
yeah well that's yeah a big concern is
that not that they would do it on
purpose it's just that like even the
most powerful like google has Content ID
on YouTube and even that gets things
wrong all the time and it's a most
advanced sort of system all the time
yeah it's the most advanced sort of
system like that on the planet for one
of the biggest media resources on the
planet so yeah that's part of the
problem you can argue that like Google
and YouTube weren't incentivized to
actually make something that worked well
to this degree before and maybe that's
why it works so badly maybe that's why
but baby maybe it's true that like you
know the car got before the horse and
YouTube created a platform without the
repercussions like thinking of the
repercussions on people that are
copyright holders rather than people
that want to take advantage of
copyrighted works and you said by 2019
is that kind of the best estimate we can
come up with for a timeline for this
yeah I think it depends I don't know
exactly but I think that I know I know
that it could be it's a matter of
they're teasing out final wording right
now before it's already been like
approved and passed in a way that in a
kind of language that Google reddit
other companies have spoken out against
and now they're speaking the final
wording before it becomes actual law and
I think that's was that could happen is
early like before they like in the next
couple weeks
Wow wow that's insane how quickly that
that came to be how exactly was article
13 enforced before the Rises exist
before right it's part of a new light
it's part of new legislation that I was
passed I think in like over the summer
over the summer yeah yeah it's kind of
those it's a progressive process but
like people up and yeah talking about it
since this summer mostly yeah and like I
said before article 13 this new
legislation before that they're in in
the Europe and in the u.s. there were
these these there was this policy around
the safe harbor idea and so now we're
seeing the first challenge rethinking of
whether or not safe harbor well safe
harbor was always kind of a gray area to
put it as lightly as possible so I'm
kind of interested I know we have other
content creators in our fan base so
everyone's experience is gonna be
different in this if you experience some
kind of effect that's related to article
13 I'd love to hear what's happening
either posted in the comments or tweet
at us just to see what varying degrees
of effect this is gonna have and how
accurate it actually plays out before we
go let's switch gears back one more time
to Qualcomm apple the Apple ban and
China would that involve ecommerce sales
like eBay as well ooh I guess if it held
up theoretically China thinks so I don't
know where any third party really yeah
again I don't I don't think the ban will
hold up do you think this is just a
scare tactic it's not a scare tactic I
mean it's just part of the legal process
that these bands get put in place and
then they get challenged and then they
put on they get put on hold until they
kind of work out the details in court
got it and I don't think that it would
apply to third-party resellers yeah
because it's early because this is
something against apples on their own
subsidiaries that to their own
businesses in China I think the idea is
that yeah I guess you're right I guess
third-party retailers
would be able to buy them in the resale
I guess so
boom market for under-the-table reason
Baba I guess I'm trying to think it's
not it wouldn't be eBay it would be like
you'd get it from Alibaba or some other
third-party retailer one more before we
wrap it up I like this that came in at
the 11th hour here from the Dean but
it's interesting well article 13 form
the basis of new business models like
charging a subscription fee for
copyrighted content
I could see large youtubers paying for
that yeah the idea being like you pay
for a collection of stuff that you know
has all like all the eyes dotted and t's
crossed on copyright in that way you
know you're safe I think those already
exist it's just that the Internet's such
a kind of like creative free-for-all it
would you know the people that would be
affected in that sense would be just
like normal people who want to like do a
cover of a song that they loved and
posted on YouTube like those are people
people that are youtubers and have a
business out of it
have people and themselves they already
think about copyright but it's you know
like just normal users of the internet
who want to post a meme that draws from
like Rick and Morty or want to do a
cover of a song that they love that's
the people that wouldn't have the
expertise to know that what they're
doing could be getting them well could
be getting them in copyright trouble but
also second degree under article 13
getting that company in trouble that
they're posting it to do you think the
platform saw this as writing on the wall
and that's why we see a lot more things
like a YouTube premium YouTube red no
those kind of subscriptions coming out
or is it just money yeah yeah yes
everybody likes money alright we're out
of time thanks everybody for joining us
again we only got three episodes left in
2018 so you know make sure to say
calendar dates except for tomorrow of
course because we don't know when we're
gonna be live tomorrow so yeah stay
tuned thanks everyone
alright 3:59 is available in iTunes tune
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course cnet.com we'll see you all
tomorrow at some point another one
sometime see tomorrow alright
you
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