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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 in feedburner stitcher we will play music Google podcast games on echo of course cnet.com we'll see you all tomorrow at some point another one sometime see tomorrow alright you
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