The two largest smartphone makers in the world supply a majority of their own modem chips to help their devices connect to wireless data networks, according to evidence presented at an antitrust trial for chip supplier Qualcomm Inc.
A trial between the US Federal Trade Commission and Qualcomm kicked off in a federal courtroom in California on Friday, with the regulators arguing that Qualcomm engaged in anticompetitive patent licensing practices to preserve a monopoly on modem chips. The case is being closely watched because it may shed light on the likely eventual outcome of the global legal battle between Apple Inc and Qualcomm.
Apple has alleged that Qualcomm engaged in illegal business practices, and Qualcomm in turn has alleged Apple violated its patents, scoring victories in China and Germany last month.
Qualcomm has argued its licensing practices follow long-established industry norms and that it charges broadly the same licensing rates that it had for many years before it ever started selling chips.
That has become a big market for Qualcomm, which controlled 59.6% of the US$15.3 billion market for 4G modem chips in 2017, according to IDC’s Phil Solis, who studies mobile chips for the research firm.
But Bob Van Nest, an attorney representing Qualcomm in the case, also sought to show that Qualcomm is not dominant in the world’s two biggest handset makers.
During opening arguments, Van Nest’s presentation said that Huawei internally sources 54% of the modem chips it puts in its devices and gets only 22% of its modems from Qualcomm, with the remainder coming from other unnamed makers. Samsung internally sources 52% of the modem chips it uses, with 38% from Qualcomm and the rest from other makers, according to the presentation.
Samsung, Huawei supply majority of own modem chips, Qualcomm says