EXHIBIT 1

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

Expert Report of Edward A. Snyder Ph.D. 

 

June 28, 2018 

 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

vs. 

QUALCOMM INCORPORATED, 

Defendant. 

 

 Civil Action No. 17-cv-0220 

 

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TABLE OF CONTENTS 

I. INTRODUCTION ................................................................................................................. 1

A. Qualifications ................................................................................................................... 1

B. Assignment ...................................................................................................................... 2

C. Background and allegations ............................................................................................. 3

D. Approach .......................................................................................................................... 7

E. Overview of report ........................................................................................................... 9

II. SUMMARY OF CONCLUSIONS ..................................................................................... 10

III. INDUSTRY ANALYSIS ..................................................................................................... 16

A. Industrial organization principles .................................................................................. 17

B. Implications for organizing economic activity in the modem chip industry ................. 21

C. Mobile devices, modem chips, and the evolution of wireless standards ....................... 27

1. Mobile devices and their components ...................................................................... 27

2. Wireless standards and the modem chip industry .................................................... 34

D. Modem chip suppliers and purchasers ........................................................................... 44

1. Modem chip suppliers .............................................................................................. 44

2. Modem chip purchasers ........................................................................................... 48

E. Modem chip supplier–OEM purchaser relationships .................................................... 52

1. Factors affecting demand for modem chips ............................................................. 53

2. Factors affecting supply of modem chips ................................................................ 84

F. Conclusion ................................................................................................................... 104

IV. ANALYSIS OF MODEM CHIP SUPPLIER–OEM RELATIONSHIPS .................... 108

A. Number of modem chip supplier relationships at each OEM ...................................... 108

B. Changes in modem chip supplier–OEM relationships over time ................................ 111

C. Modem chip supplier–OEM relationships for high-end mobile devices ..................... 113

1. Greater concentration among high-end OEMs ...................................................... 114

2. Increasing vertical integration among high-end OEMs and their modem chip 

suppliers ....................................................................................................................... 117

D. Conclusion ................................................................................................................... 119

V. ANALYSIS OF MODEM CHIP SUPPLIER PERFORMANCE ................................. 120

A. Introduction .................................................................................................................. 120

B. Qualcomm’s experience ............................................................................................... 121

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1. cdmaOne and CDMA2000-compatible modem chips ........................................... 122

2. WCDMA-compatible modem chips ...................................................................... 148

3. LTE-compatible modem chips ............................................................................... 156

4. Summary of Qualcomm’s experience .................................................................... 170

C. Outcomes for other modem chip suppliers .................................................................. 171

1. Infineon .................................................................................................................. 171

2. Intel ........................................................................................................................ 183

3. MediaTek ............................................................................................................... 222

4. Samsung / Samsung S-LSI..................................................................................... 234

5. HiSilicon ................................................................................................................ 240

6. ST-Ericsson / Ericsson ........................................................................................... 246

7. Texas Instruments .................................................................................................. 258

8. Broadcom ............................................................................................................... 265

9. Freescale ................................................................................................................ 277

10. Spreadtrum ............................................................................................................. 282

11. VIA Telecom ......................................................................................................... 291

12. Marvell ................................................................................................................... 298

13. Nvidia ..................................................................................................................... 307

D. Conclusion ................................................................................................................... 312

VI. ANALYSIS OF INDUSTRY PERFORMANCE ............................................................ 318

A. Pace of innovation........................................................................................................ 319

B. Price trends................................................................................................................... 323

C. Consumer surplus......................................................................................................... 324

D. Conclusion ................................................................................................................... 328

VII.ASSESSMENT OF PROFESSOR SHAPIRO’S OPINIONS ........................................ 328

A. Claimed anticompetitive effects in terms of certain modem chip suppliers’ margins and 

exits ..................................................................................................................................... 330

1. Texas Instruments .................................................................................................. 331

2. Broadcom ............................................................................................................... 333

3. Marvell ................................................................................................................... 336

4. Nvidia ..................................................................................................................... 337

5. ST-Ericsson ............................................................................................................ 340

6. MediaTek ............................................................................................................... 342

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B. Claimed anticompetitive effects of Qualcomm’s licensing practices .......................... 345

1. Claimed harm from “eliminating a valuable option” ............................................. 346

2. Claimed harm from “discourag[ing] investment” .................................................. 349

C. Claimed anticompetitive effects of Qualcomm’s “exclusive dealing” agreements with 

Apple ................................................................................................................................... 354

1. Broadcom and ST-Ericsson ................................................................................... 354

2. Intel ........................................................................................................................ 358

D. Claimed barriers to entry ............................................................................................. 364

E. Professor Shapiro acknowledges the importance of industry factors .......................... 366

F. Conclusion ................................................................................................................... 367

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I. INTRODUCTION 

A. Qualifications 

1. I am the Indra K. Nooyi Dean and William S. Beinecke Professor of Economics and 

Management at the Yale School of Management where I have been employed since July 1, 

2011. As Dean I have overall responsibilities for the school’s academic programs, its budget 

and financial health, and strategy. Previously, I was the Dean and George Shultz Professor of 

Economics at the University of Chicago Booth School of Business. 

2. I began my professional career in 1978 with the Antitrust Division of the U.S. Department of 

Justice as a Staff Economist to the National Commission to Review Antitrust Laws and 

Procedures. I was a Staff Economist in the Antitrust Division on a full- and part-time basis 

until 1984, working on antitrust investigations in a wide range of product markets involving 

manufacturers, service providers, distributors, and retailers. Since then, I have worked in 

antitrust enforcement, conducted research on antitrust policy and business practices, taught 

courses in related areas, and consulted on antitrust matters. 

3. I earned my M.A. in Public Policy and Ph.D. in Economics from the University of Chicago. 

My Ph.D. thesis focused on price-fixing and examined enforcement of Section 1 of the 

Sherman Antitrust Act by the U.S. Department of Justice; this involved reviewing over 200 

price-fixing conspiracies. I began my academic career in 1982 at the University of Michigan 

Business School and over time was promoted to Chair of Business Economics and Public 

Policy. 

4. My primary expertise is Industrial Organization, the field of economics that deals most directly 

with pricing and distribution of products, interactions among competitors, contracting practices, 

and antitrust issues. My research draws on relevant theory, investigates real-world behavior, 

and is predominantly empirical in nature. I conducted three scholarly projects on antitrust 

policy and enforcement with Thomas E. Kauper, Professor of Law Emeritus at the University 

of Michigan Law School and former Assistant Attorney General in charge of the Antitrust 

Division, U.S. Department of Justice. I have been an Editor of the Journal of Law and 

Economics. 

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5. I have provided expert testimony in numerous antitrust matters and in so doing have analyzed 

economic and business issues in a rich variety of industry settings, including microprocessors 

for computers, optical disk drives, cathode ray tubes, and liquid crystal displays. I consider 

myself to be an expert on pricing practices, distribution of products, vertical integration and 

contracting, and industrial organization in general. I also consider myself to be an expert on 

allegations of collusion, monopolization, and other anti-competitive practices. 

6. Appendix A provides my Curriculum Vitae. Appendix B provides a list of my expert 

testimony within the past four years. 

B. Assignment 

7. I have been retained by counsel for defendant Qualcomm to assess the claims by the Federal 

Trade Commission (“FTC” or “Plaintiff”) that Qualcomm’s alleged conduct has reduced 

competition in the modem chip industry. I understand that Plaintiff claims that the at-issue 

conduct deterred or precluded entry, suppressed innovation, and forced many of Qualcomm’s 

competitors to exit the business of supplying Code-Division Multiple Access (“CDMA”) 

modem chips as well as what Plaintiff calls “premium” Long Term Evolution (“LTE”) modem 

chips. Plaintiff also claims that, conversely, other modem chip suppliers “would become 

stronger and better positioned to win future designs at Apple and other OEMs” absent the atissue conduct.1

 To be clear, I do not address Plaintiff’s specific allegations of the at-issue 

conduct. Rather, I focus on the claimed harmful combined effects of Qualcomm’s alleged 

exclusionary conduct on competition in the modem chip industry and end customers. In this 

regard, I have been asked to evaluate the expert opinions offered by Professor Carl Shapiro 

concerning certain competitive effects of Qualcomm’s alleged exclusionary conduct.2

 

1

 Federal Trade Commission’s Complaint for Equitable Relief, Federal Trade Commission v. Qualcomm 

Incorporated, January 17, 2017, ¶ 127 (“Complaint”). 

2 Plaintiff retained Professor Carl Shapiro to “provide an economic analysis of the likely competitive effects of 

Qualcomm’s commercial practices that are the subject of the FTC’s complaint in this case.” Expert Report of 

Carl Shapiro, May 24, 2018, ¶ 7 (“Shapiro Report”). I understand that Plaintiff has asked Professor Shapiro as 

well as other experts to opine on additional topics. See, e.g., Shapiro Report, ¶ 7 (“The FTC also asked me to 

define the relevant markets applicable to the analysis of this conduct and to assess whether Qualcomm 

possesses monopoly power in any of these markets.”). 

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8. I have directed employees of Analysis Group, Inc., an economic research and consulting firm, 

to assist me in this assignment. I am being compensated at my normal hourly rate of $1,250 

for time spent on this matter, and I receive compensation based on the professional fees of 

Analysis Group. No compensation is contingent on the nature of my findings or on the 

outcome of this litigation. 

C. Background and allegations 

9. The allegations in this matter concern modem chips – also identified as modem chipsets or 

baseband processor chipsets. 3 These small silicon chips, when incorporated into mobile 

devices, facilitate the transmission and reception of digitized data over cellular networks.4 

Hence, modem chips are foundational to mobile device functions, including telephone and 

internet access. 

10. Exhibit I.C.1 depicts some aspects of the modem chip industry and its relationship to 

downstream firms that design and manufacture mobile devices. As indicated, the extent of 

vertical integration varies greatly. Firms such as Samsung have been involved in modem chip 

design, modem chip fabrication, mobile device design, and mobile device manufacturing. 

Other firms have focused on a subset of these activities. For example, “fabless” modem chip 

suppliers such as Qualcomm and MediaTek design modem chips and use foundries such as 

Taiwan Semiconductor Manufacturing Company (“TSMC”) to manufacture them.5 Other 

firms, usually known as integrated device manufacturers (“IDMs”), both design and 

manufacture modem chips. For instance, Intel owns fabs to manufacture modem chips for 

both internal use and, more recently, for other modem chip suppliers. 

 

3

 Modem chips modulate and demodulate signals and thus communicate with other modems. These small silicon 

chips also perform a variety of radio control functions such as encoding and radio frequency shifting, and often 

integrate other functions executed by the application processor (“AP”). The term chipset is used to refer to a set 

of electronic components, such as a modem chip and radio frequency (“RF”) chip. See The Linley Group, “A 

Guide to 3G/4G Wireless Chips,” Fifth Edition, September 2010, pp. 29–30 (Section 3 – Handset Processors). 

4

 As I discuss in more detail in Section III.C.1, mobile devices include handsets (such as feature phones or 

smartphones) but also other devices that contain modem chips and enable cellular connectivity. 

5

 Semiconductor fabrication facilities are called “fabs.” See, e.g., Handy, Jim, “What’s It Like in a 

Semiconductor Fab?,” Forbes, December 19, 2011. 

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11. Similarly, some original equipment manufacturers (“OEMs”) such as Apple and, at times, Acer, 

design mobile devices and use contract manufacturers such as Foxconn to manufacture them. 

Other OEMs, such as LG, both design and manufacture mobile devices. In addition, some 

OEMs design and manufacture mobile devices and also design modem chips. For example, 

Huawei owns HiSilicon, which designs the modem chips for some Huawei mobile devices. 

Overall, modem chip suppliers obtain modem chips manufactured according to their designs 

from either internal or external foundries, then supply those modem chips to internal or external 

OEMs; OEMs then sell mobile devices containing modem chips. 

12. Defendant Qualcomm, in addition to designing and selling modem chips and other products, 

develops and licenses intellectual property that includes patents that are essential to standards 

(“standard-essential patents” or “SEPs”), including cellular SEPs, and patents that are not 

essential to standards but are nevertheless often commercially significant (“non-essential 

patents” or “NEPs”).6

13. The FTC alleges that Qualcomm has engaged in conduct to exclude competition, “den[ying] 

other [modem chip] suppliers the benefits of working with a particularly important cell phone 

manufacturer [i.e., Apple] and hamper[ing] their development into effective competitors,”7

thereby “serv[ing] to maintain Qualcomm’s monopoly in [modem chip] markets.”8

 According 

to Plaintiff, Qualcomm’s alleged exclusionary conduct has allowed it to maintain and extend 

monopoly power in the sale of CDMA modem chips and “premium” LTE modem chips.9

 In 

support of its claim that Qualcomm has harmed the modem chip industry, Plaintiff alleges “a 

set of interrelated policies and practices” comprising three primary components.10

 

6

 Qualcomm Incorporated is the parent company of Qualcomm Technology Licensing (“QTL”) and Qualcomm 

Technologies, Inc. (“QTI”), among other subsidiaries. QTL is operated by Qualcomm Incorporated, which 

owns the vast majority of Qualcomm’s patent portfolio and conducts the related licensing business; QTI, 

together with its subsidiaries including Qualcomm CDMA Technologies (“QCT”), operates “substantially all” 

of Qualcomm’s “products and services businesses” and “engineering, research, and development functions” 

(Qualcomm, “Reporting Segments,” available at http://investor.qualcomm.com/reportingsegments.cfm). 

7

 Complaint, ¶¶ 1, 8. 

8

 Complaint, ¶ 7. 

9

 Complaint, ¶¶ 131, 144, and 147. As discussed further in Sections III.C.2.a and V.B.1, I refer to CDMA 

modem chips as those supporting the cdmaOne or CDMA2000 families of standards. 

10 Complaint, ¶ 3. I understand that Plaintiff’s allegations also include a number of other claims. 

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14. First, Plaintiff alleges harm from Qualcomm’s practice of licensing its cellular SEPs to OEMs 

and not providing exhaustive licenses to its SEPs to modem chip suppliers:11

Qualcomm has consistently refused to license its SEPs to competing suppliers of 

[modem chips]. Several of Qualcomm’s former and current competitors, including 

Intel, MediaTek, and Samsung, have sought SEP licenses from Qualcomm. In each 

instance, Qualcomm refused to grant a SEP license. 

A license to Qualcomm’s cellular SEPs would provide substantial benefits to other 

[modem chip] suppliers and to their customers. Because Qualcomm refuses to license 

[...] SEPs to its competitors, these competitors cannot offer OEMs [modem chips] that 

convey the rights to Qualcomm’s cellular SEPs. 

Qualcomm’s ability to tax its competitors’ sales via patent license terms with OEMs 

would be limited if it licensed cellular SEPs to its competitors. Qualcomm’s [...] 

competitors, unlike its OEM customers, do not depend on Qualcomm for [modem chip] 

supply. As a result, Qualcomm could not use a threatened disruption of [modem chip] 

supply to skew SEP-license negotiations with its competitors, and the royalties that 

would emerge from those negotiations would reflect the royalties that a court would 

deem reasonable. 

Qualcomm’s refusal to license competing manufacturers of [modem chips], in 

contravention of its FRAND [i.e., fair, reasonable, and non-discriminatory] 

commitments, contributes to its ability to [...] maintain its monopoly.12

15. Second, Plaintiff alleges harm from Qualcomm’s “condition[ing] OEMs’ access to its [modem 

chips] on OEMs’ acceptance of a license to Qualcomm’s cellular SEPs on Qualcomm’s 

preferred terms,”13 and requiring OEMs to pay “substantial royalties to Qualcomm on sales of 

[mobile devices] using a [modem chip] purchased from Qualcomm’s competitors.” 14 

 

11 Complaint, ¶¶ 112–115. 

12 Complaint, ¶¶ 112–115. See also Shapiro Report, ¶ 9 (“Qualcomm’s refusal to license its cellular SEPs [...] to 

its modem-chip rivals has [...] weaken[ed] and exclude[d] those rivals, thereby strengthening and prolonging 

Qualcomm’s monopoly power in the market for CDMA Modem Chips and in the market for Premium LTE 

Modem Chips.”). 

13 Complaint, ¶¶ 61, 102. 

14 Complaint, ¶ 61. 

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According to Plaintiff, this “reduces demand for competitors’ [modem chips]”15 and thereby 

“weakens Qualcomm’s competitors [...].”16

16. Third, Plaintiff alleges harm from Qualcomm’s discounting practices, where Qualcomm 

offered funds to certain OEMs that were “conditioned on the OEM’s acceptance of 

Qualcomm’s preferred terms” and “in some cases accrued based on OEMs’ purchase of 

Qualcomm’s [modem chips].” 17 It further alleges harm from Qualcomm’s entering 

“agreements with Apple provid[ing] for billions of dollars in conditional rebates,” where such 

agreements were “de facto exclusive deals [...].”18 According to Plaintiff, such inducements 

led to decreased sales by other modem chip suppliers and thereby “significantly impeded the 

development of other [modem chip] suppliers into effective competitors to Qualcomm.”19

17. Plaintiff claims that these components of Qualcomm’s alleged exclusionary conduct have 

“excluded competitors, increased consumer prices, and suppressed innovation”:20

By raising OEMs’ all-in costs of using competitors’ [modem chips], Qualcomm’s 

conduct has also diminished OEMs’ demand for those [modem chips], reduced 

competitors’ sales and margins, and diminished competitors’ ability and incentive to 

invest and innovate.21

 

15 Complaint, ¶ 87. 

16 Complaint, ¶ 7. See also Shapiro Report, ¶ 9 (“Qualcomm will not supply its modem chips to a handset 

manufacturer that has not signed a patent license with Qualcomm covering Qualcomm’s cellular standardessential patents (SEPs). [...] As a result [...], Qualcomm has been able to obtain unreasonably high royalties 

for its cellular SEPs [...]. Qualcomm’s unreasonably high royalties for its cellular SEPs have raised the cost to 

handset manufacturers of using non-Qualcomm chips. This in turn has reduced the output of non-Qualcomm 

modem chips [...].”). 

17 Complaint, ¶¶ 102, 103. 

18 Complaint, ¶¶ 124, 125. 

19 Complaint, ¶¶ 106, 130. See also Shapiro Report, ¶ 9 (“[...L]arge exclusivity payments that Qualcomm made 

to Apple created a powerful incentive for Apple not to use non-Qualcomm modem chips in any new Apple 

device. [...] Qualcomm recognized that these exclusivity payments provided a strategic benefit to Qualcomm, 

namely the weakening [of] its modem-chip rivals, especially Intel.”). 

20 Complaint, ¶ 136. 

21 Complaint, ¶ 138. See also Shapiro Report, ¶ 301 (“[Qualcomm’s alleged exclusionary conduct] excludes rival 

modem-chip suppliers. In the short run, that exclusion takes the form of reducing the competitive constraint 

that the rivals impose on Qualcomm, which leads to reduced output of rival modem chips. [...] In the long run, 

that exclusion also takes the form of reduced investments by rival modem chip suppliers, leading those rivals to 

offer lower quality modem chips and/or to have reduced capacity. In time, the excess royalty can induce exit 

from the market altogether.”). 

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18. Relatedly, Plaintiff claims that, absent Qualcomm’s conduct, other modem chip suppliers 

could have “achieve[d] a scale of business that confers research-and-development flexibility,” 

“learn[ed] directly from engagement with Apple’s engineering teams,” “achieve[d] technical 

validation by demonstrating [their] ability to meet Apple’s demanding technical requirements,” 

“obtain[ed] a reputational halo effect,” and attained other benefits.22

D. Approach 

19. I approach my assignment by analyzing two alternative hypotheses concerning the modem 

chip industry: the Industry Factors Hypothesis and Plaintiff’s Hypothesis.

23

20. The Industry Factors Hypothesis posits that relevant industry factors, identified by an analysis 

of the modem chip industry and grounded in relevant industrial organization principles, exert 

a strong influence on the structure and development of the modem chip industry. Important 

industry factors include the rapid innovation in the modem chip industry, where firms compete 

to meet the technical requirements of new wireless standards and incremental releases within 

those standards, to differentiate their modem chips on attributes valued by OEM purchasers 

and network carriers, and to customize their products to meet particular purchaser objectives. 

According to the Industry Factors Hypothesis, relevant industry factors explain the structure 

of the industry at any point in time, the relative success and failure of modem chip suppliers, 

industry changes, and observed entry and exit decisions. For example, at the industry level, 

dramatic shifts in product characteristics involve consequential rivalries among firms 

attempting to be timely-to-market with leading-edge products. Given the importance and 

riskiness of firm-level efforts to develop and customize products, the success and failure of 

firms depend on their foresight, the efficiency of their investments, and ability to execute their 

strategic responses to purchaser demands and industry dynamics. 

21. Plaintiff’s Hypothesis is that Qualcomm’s alleged exclusionary conduct (i.e., as relevant here, 

tying of modem chips with patent licenses, refusal to provide exhaustive component-level 

patent licenses to modem chip suppliers, and discount agreements with Apple) reduced 

 

22 Complaint, ¶ 129. See also Shapiro Report, ¶¶ 375–383. 

23 This approach of developing alternative hypotheses is fundamental to social science and economic analysis in 

particular. 

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competition in the modem chip industry, altered industry dynamics, and allowed Qualcomm 

to become more successful than it otherwise would have been. According to Plaintiff’s 

Hypothesis, Qualcomm faced less competition as rival chip suppliers could not gain sales, or 

sufficient sales to reach efficient scale, were denied learning benefits, and were denied 

certification benefits from selling to Apple and other major OEMs. These predicted effects 

would be indicated by (a) reduced investment by Qualcomm’s competitors, (b) exit from the 

modem chip industry, (c) deterred entry by potential competitors, and (d) limited success of 

Qualcomm’s actual competitors. 

22. To distinguish the two hypotheses, I engaged in several inquiries. First, I conducted an analysis 

of the types of economic activity that occur in the industry, including with respect to the 

successive and overlapping generations of wireless technologies as well as the importance of 

product differentiation to OEM customers. This analysis, grounded in relevant industrial 

organization principles, allowed me to identify the industry factors that potentially drive the 

economic activity in the industry, and it thus serves as the foundation of the Industry Factors 

Hypothesis. Second, to test that hypothesis, I conducted in-depth analyses of 14 modem chip 

suppliers,24 including every major modem chip supplier since 2002, focusing on adverse 

outcomes such as exit and loss of customers, and on successful outcomes such as new entry 

into the industry and successful product development. Third, and relatedly, I studied in detail 

the relationships between OEMs and modem chip suppliers, which yielded insights into the 

reasons for differences in the numbers of suppliers used by different OEMs and the reasons 

why OEMs added or dropped suppliers.25 Fourth, I studied the longer-run performance of the 

industry using standard indicators such as price and quality. 

23. To the extent that these analyses show that industry factors explain outcomes in the modem 

chip industry and indicate strong performance, they support the Industry Factors Hypothesis. 

In this regard it is highly relevant whether firm-level factors – the ability of individual suppliers 

to forecast accurately, invest efficiently according to their forecasts, and execute the required 

 

24 Modem chip suppliers analyzed include Qualcomm, Infineon, Intel, MediaTek, Samsung/Samsung S-LSI, 

HiSilicon, ST-Ericsson, Texas Instruments, Broadcom, Freescale, Spreadtrum, VIA Telecom, Marvell, and 

Nvidia. See also Sections III.D.1 and V.C. 

25 Major OEMs include Samsung, Nokia, Apple, LG, Huawei, Sony, and Motorola. See also Section III.D.2. 

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engineering projects – explain supplier successes and failures. Given that these firm-level 

factors would be present with or without the at-issue conduct, such findings would indicate 

that industry factors, and not the at-issue conduct, explain outcomes. Similarly, if the analyses 

of OEM–supplier relationships indicate that the advantages of incumbent suppliers are limited 

given the on-going challenges to foresee, invest, and execute, then such findings would also 

support the Industry Factors Hypothesis. 

24. Conversely, these analyses would yield support for Plaintiff’s Hypothesis if they indicated that 

Qualcomm’s alleged exclusionary conduct caused observed outcomes such as the exit of 

particular rivals; if they established that Qualcomm’s alleged exclusionary conduct had caused 

a reduction in investment in new products and in differentiated products; and if long-run 

industry performance has suffered. Of note, simply observing that the industry does not have 

a large number of successful competitors at the leading edge would not distinguish between 

the two hypotheses. The relevant questions concern whether supplier-specific outcomes arise 

in the context of intense rivalry that fosters strong overall industry performance.26

25. In executing my assignment, I relied on my research and experience, relevant economic 

literature, documents and data produced in discovery, and publicly available information. A 

list of the materials that I have relied upon is provided in Appendix C.27

E. Overview of report 

26. I summarize my conclusions in Section II. Section III contains an analysis of the modem chip 

industry that identifies potentially relevant industry factors – e.g., rapid innovation and 

product-specific investments, and OEM-varied preferences for single-sourcing or multisourcing modem chips. Hence, this section is the basis for the Industry Factors Hypothesis. 

 

26 Plaintiff’s Hypothesis requires that (a) the failure or exit of certain modem chip suppliers would not have 

occurred absent Qualcomm’s alleged exclusionary conduct (i.e., the relevant industry factors alone cannot 

explain the failure, entry, or exit of modem chip suppliers), and (b) the failures of modem chip suppliers have 

impaired the performance of the industry. 

27 These materials include, for example, litigation materials such as produced documents and deposition 

transcripts, as well as economics literature, industry reference material, contemporaneous reporting on modem 

chip suppliers, OEMs, and developing cellular technologies, and industry analyses. 

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27. I then evaluate the explanatory power of the industry factors thus identified on observed 

modem chip supplier outcomes. Specifically, Section IV analyzes modem chip supplier–OEM 

relationships and Section V examines Qualcomm’s own experience and the successes and 

failures of certain other modem chip suppliers. As stated, to the extent that the success and 

failure of modem chip suppliers’ performance as well as changes in modem chip supplier–

OEM relationships are explained by the relevant industry factors, such evidence supports the 

Industry Factors Hypothesis and contradicts the Plaintiff’s Hypothesis. 

28. In Section VI, I evaluate the performance of the modem chip industry to assess the evidence, 

if any, that Qualcomm’s alleged exclusionary conduct has harmed competition overall. If 

Plaintiff’s Hypothesis were correct, analysis of the modem chip industry should reveal clear 

indications of impaired performance in terms of the ability of the industry to efficiently deliver 

value to consumers. 

29. In Section VII, I assess Professor Shapiro’s conclusions that certain modem chip supplier 

failures were caused by Qualcomm’s alleged exclusionary conduct. With the benefit of the 

insights I derived from my analyses, including the detailed case analyses in Section V, I am 

able to evaluate whether Professor Shapiro has isolated the effects of Qualcomm’s alleged 

exclusionary conduct, if any, from the effects of the relevant industry factors. 

II. SUMMARY OF CONCLUSIONS 

30. I have reached three main conclusions from my analysis of the modem chip industry and my 

review of modem chip supplier and industry performance. 

31. First, industry factors and industrial organization principles exert a strong influence on industry 

structure, competition among modem chip suppliers, the successes and failures of suppliers, 

and the relationships between suppliers and their OEM customers. 

a. Modem chip suppliers make substantial investments, both general and specific, to 

develop the capability to produce innovative modem chips for mobile devices that 

implement new generations of wireless standards and releases within those 

standards. Such modem chips embody dramatically improved functionalities and 

so drive demand from OEMs. Suppliers differentiate their products based on 

attributes that are valued generally, e.g., transmission speeds and power 

consumption. Suppliers may further make specific investments to customize the 

products to meet the requirements of OEMs, network carriers, and end consumers. 

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The investments by suppliers can be specific to particular products and in some 

cases to particular customer needs. 

b. At any given point in time, only a small number of modem chip suppliers will have 

cleared the multiple hurdles necessary to compete effectively at the forefront of the 

industry. Modem chip suppliers are rewarded if they are first or nearly first to 

market with leading-edge products that provide OEMs with opportunities to 

upgrade their mobile devices. Conversely, modem chip suppliers lose business if 

their product developments fail or they are not timely to market. Given the high 

ratio of research and development (“R&D”) to sales at the leading edge of the 

industry, the divergence between success and failure is large. 

c. Analysis of the nature of product development efforts by modem chip suppliers 

yields several major insights, including that success on the leading edge entails the 

ability to foresee what will be most important to future OEM demand, to invest 

efficiently according to those forecasts, and to execute effectively, e.g., work under 

tight development deadlines, customize products to meet specifications, and be able 

to produce high volumes of quality products. While the learning benefits and 

certification benefits from prior success are important, suppliers with prior success 

may or may not succeed going forward given the necessary foresight, efficient 

investment, and execution. 

d. Analysis of modem chip supplier–OEM relationships also shows that firms can 

compete effectively as “fast followers” and by efficiently developing and supplying 

products that are in the later stage of their product cycles, and that these firms can 

win business away from suppliers who were first to market with particular product 

features. In contrast to Qualcomm, which devotes substantial resources to 

supplying leading-edge products, other suppliers such as MediaTek have at times 

focused on supplying modem chips for lower-end mobile devices. Industry 

analysis indicates that such suppliers can succeed by targeting appropriate segments, 

investing accordingly, and developing the ability to supply high volumes of reliable 

products. 

e. The relatively small number of suppliers at a given point in time, especially at the 

leading edge, does not indicate a lack of competition. Industrial organization 

principles suggest that leaders at any one point in time are challenged by rivals and 

may be displaced as suppliers to major OEMs, whether or not (i) the OEM has 

chosen to use multiple suppliers or a single supplier, and (ii) the OEM is vertically 

integrated. Indeed, evidence shows that different OEMs use different numbers of 

modem chip suppliers and adjust the volumes of purchases among suppliers, and 

that even suppliers that secure a design win with a leading-edge product can later 

be displaced by competing suppliers. 

f. Modem chip suppliers differ in the range of their economic activities, including 

whether they design and manufacture their products. These differences affect how 

they compete and the nature of their relationships with OEMs and other industry 

participants. But industry analysis indicates that independent of the nature of their 

contractual relationships, modem chip suppliers succeed or fail based on their 

foresight, efficient investments, and ability to execute. Indeed, every major success 

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or failure experienced by modem chip suppliers can be fully explained by these 

industry factors. 

32. Second, analyses of modem chip suppliers do not support Plaintiff’s Hypothesis. 

a. Recognizing that the same set of industry factors, i.e., foresight, efficient 

investment, and execution, within the context of purchaser demands and other 

factors, would influence modem chip suppliers independent of whether the at-issue 

conduct was present or absent, Plaintiff’s Hypothesis – that Qualcomm’s alleged 

exclusionary conduct has impaired modem chip suppliers – is not supported by the 

record concerning (i) entry and exit by modem chip suppliers, and (ii) changes in 

supply relationships between modem chip suppliers and OEMs. 

b. The evidence shows both that (i) the observed variety of OEMs’ decisions 

concerning the number of suppliers from which they source modem chips and 

adjustments to their supply relationships have been consistent with the 

requirements of those OEMs, and (ii) modem chip suppliers lose and gain shares 

of purchases by major OEMs on an ongoing basis. Apple’s choice of one or two 

modem chip suppliers is consistent with its overall business strategy, the limited 

number of mobile devices it offers, and the high degree of customization it requires. 

Apple continuously evaluates its chip suppliers and, despite having started fewer 

new supply relationships than other OEMs in recent years, it maintains, and benefits 

from, robust competition among suppliers. Samsung has used a comparable 

number of modem chip suppliers for its flagship Galaxy S devices, but it sources 

from more modem chip suppliers for its broad portfolio of mobile devices. 

c. Evidence shows that OEMs on average start or end one relationship with a modem 

chip supplier annually. The shift to 4G wireless standards was associated with an 

increased rate of turnover in supply relationships in 2011-2013. Many started 

relationships coincided with the growing success of Spreadtrum, for example. 

Many ended relationships involved modem chip suppliers that failed to develop 

viable 4G LTE products. For example, Broadcom acquired Beceem for its 4G 

technologies in 2010 and acquired Renesas Mobile in 2013 to accelerate its LTE 

development, but it ultimately failed to secure substantial 4G design wins and 

exited the modem chip industry in 2014. Other modem chip suppliers that struggled 

to develop LTE products and exited or were acquired during this period include 

ST-Ericsson and VIA Telecom. While Samsung provide their 

integrated modem chip suppliers with an internal source of demand, they exhibit 

willingness to source from external suppliers. 

d. Qualcomm derives its success as a modem chip supplier from its many years of 

industry experience and efficient investments in next-generation R&D efforts, 

which have enabled it to meet new technological challenges and to compete 

effectively on dimensions that are unrelated either to standards or to its licensed 

intellectual property, such as offering new functionality and better integration in 

LTE before competitors. Qualcomm offered the first multi-mode LTE modem chip 

and led the integration of multiple components onto a single chip. Even if 

Qualcomm had no licensing business, its modem chips would have been attractive 

due to their superiority from a feature and performance standpoint. 

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e. Intel, Samsung, and Huawei have vast experience and resources and invest 

substantial amounts in R&D. However, R&D investment is important but not 

sufficient to ensure success. For example, Intel’s success has been limited by poor 

R&D efficiency. 

f. Independent of Qualcomm’s at-issue conduct, several modem chip suppliers have 

made errors in foresight, and their success has been limited as a result. For example, 

Broadcom, which exited the modem chip industry in 2014, lacked foresight in 

failing to diversify its customer base, and its revenues declined substantially when 

Nokia’s and Samsung’s modem chip demands shifted. Broadcom also failed to 

foresee the need to improve data throughput and other characteristics of its modem 

chips. In the same vein, several modem chip suppliers have also made significant 

execution errors, including in how they have addressed organizational challenges. 

For example, Marvell, which exited the modem chip industry in 2015, lost its 

primary customer, Research in Motion (“RIM”), after falling behind on LTE 

development and consistently missing development deadlines more broadly. 

Marvell also failed to bring modem chips to market that were competitive in terms 

of size and power consumption. 

g. Independent of Qualcomm’s alleged exclusionary conduct, other modem chip 

suppliers have succeeded. MediaTek, HiSilicon, and Spreadtrum have 

demonstrated good foresight, have appropriately targeted their investments to their 

chosen strategies, and have executed well. 

. 

h. Modem chip suppliers’ successes and failures reflect their ability to respond to the 

shift in demand toward integrated solutions and, more broadly, to provide a greater 

range of products to OEMs. MediaTek and Qualcomm have successfully integrated 

application processors and other components onto their modem chips, and such 

integrated chips have become attractive to many OEMs seeking to reduce device 

size and cost. By contrast, Texas Instruments focused on hardware solutions, 

leaving development of the software required to enable the communication 

functionality of its chips to its OEM partners. Furthermore, while Texas 

Instruments developed some modem chips that integrated a number of other nonprocessor device components, it experienced difficulties integrating multimedia 

capabilities and exited the modem chip industry when it lost substantial sales due 

to foresight and execution issues. 

i. Careful and detailed analyses of the industry do not, therefore, support Plaintiff’s 

Hypothesis that Qualcomm’s alleged exclusionary conduct either (i) caused other 

firms to fail, or (ii) prevented other firms from succeeding. Instead, modem chip 

supplier outcomes have been unrelated to Qualcomm’s alleged exclusionary 

conduct. 

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33. Third, analysis of industry performance directly contradicts Plaintiff’s Hypothesis. 

a. According to Plaintiff’s Hypothesis, Qualcomm’s alleged exclusionary conduct 

since 2007 has impaired the modem chip industry. Standard indicators of industry 

performance do not, however, provide any support for such a prediction. 

b. Investment in R&D by the industry has been substantial and has yielded huge 

improvements in modem chips. For example, from 2013 to 2017, maximum 

downlink speeds of 4G-compatible devices have increased by a factor of seven. 

These improvements have translated into impressive advances in the performance 

of mobile devices used by end consumers, including faster and more efficient 

performance of basic voice and data functions, as well as support for more dataintensive functionalities such as multimedia sharing, audio and video streaming, 

and video conferencing. 

c. Over the time period associated with Plaintiff’s claims, modem chip prices have 

declined. For example, since 2012, the average price of 4G LTE modem chips has 

declined by half even without adjusting for a shift towards more expensive 

integrated chips and for quality improvements, e.g., greater processing power, that 

have increased consumer surplus. 

34. I have also reached three main conclusions from my assessment of Professor Shapiro’s 

opinions regarding certain competitive effects of Qualcomm’s alleged exclusionary conduct. 

35. First, Professor Shapiro’s claim that certain modem chip suppliers’ exits from the modem chip 

industry were caused by Qualcomm’s alleged exclusionary conduct is unsupported and fails to 

account for other plausible explanations. 

a. Professor Shapiro’s conclusions concerning anticompetitive effects lack foundation 

given that he does not consider the relevant counterfactual in which Qualcomm’s 

alleged exclusionary conduct is removed, but relevant industry factors influence 

outcomes. Without doing so, Professor Shapiro cannot isolate the effects of 

Qualcomm’s alleged exclusionary conduct, if any, from the effects of industry 

factors that would be present in a world without Qualcomm’s alleged exclusionary 

conduct. Given his lack of consideration of the most important alternative 

hypothesis and the strong evidence in support of the alternative explanation, 

Professor Shapiro’s conclusions in support of Plaintiff’s Hypothesis cannot be 

accepted. 

b. My analyses establish that industry factors, including the importance of foresight, 

efficient investment, and execution, fully explain the outcomes that Professor 

Shapiro focuses on for specific modem chip suppliers. For example, Marvell was 

regarded as not having a LTE roadmap, and its aforementioned inability to meet 

delivery deadlines caused it to lose not only a major customer but, according to 

some, credibility more generally. Nvidia misjudged the size of the mid-tier mobile 

device segment it targeted, and its SoCs, which integrated its high-performance 

application processor onto modem chips that lacked features required for high-end 

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mobile devices, were not attractive for higher-end mobile devices. ST-Ericsson’s 

R&D was inefficient, which ST-Ericsson

uppliers. 

36. Second, Professor Shapiro’s claim that Qualcomm’s licensing practices harmed its modem 

chip rivals is unsupported. 

a. Professor Shapiro does not explain his claim that an ability to negotiate exhaustive 

licenses for Qualcomm’s cellular SEPs would provide Qualcomm’s modem chip 

rivals with “a valuable option.” He ignores the many other cellular SEP holders 

that do not typically offer exhaustive component-level licenses to modem chip 

suppliers. He also ignores that modem chip suppliers develop and sell other mobile 

device inputs other than modem chips, which affects their relationships with OEMs. 

b. Tellingly, Professor Shapiro does not explain how numerous modem chip suppliers 

have succeeded despite not having an exhaustive component-level license to 

Qualcomm’s SEPs. For example, modem chip suppliers such as MediaTek, 

Spreadtrum, HiSilicon, Samsung S-LSI, and Intel have succeeded in developing 

and marketing large volumes of modem chips irrespective of not having an 

exhaustive component-level patent license from Qualcomm. 

c. Professor Shapiro’s suggestion that modem chip suppliers’ lack of exhaustive 

component-level licenses for Qualcomm’s SEPs “discourages investment” is 

unsupported. His only supporting example is a joint venture in which 

 Moreover, Professor 

Shapiro did not evaluate the net effect of the decision. The individual firms 

continued to invest in modem chip development after the joint venture agreement 

was terminated. At the time the joint venture was terminated, 

 Other partners in the initial joint venure formed another joint 

venture to develop and sell modem chips. 

37. Third, Professor Shapiro’s claim that Qualcomm’s “exclusive dealing” agreements with Apple 

weakened its modem chip rivals is unsupported. 

a. Professor Shapiro’s suggestion that Broadcom’s and ST-Ericsson’s exits from the 

modem chip industry were caused by Apple’s “exclusive dealing” agreements with 

Qualcomm is unsupported. 

, Broadcom 

acquired Renesas to accelerate its LTE modem chip development, 

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b. Professor Shapiro’s claim that Intel would have won sales of thin modems to Apple 

earlier absent Apple’s “exclusive dealing” agreements with Qualcomm is 

unsupported. Intel’s modem chips would not have met Apple’s requirements for 

reasons unrelated to Qualcomm, indicating that Apple would have continued to 

choose Qualcomm’s modem chips in the absence of its “exclusive dealing” 

agreements with Qualcomm. 

y 

III. INDUSTRY ANALYSIS 

38. In this section, I first review fundamental industrial organization principles and then frame 

their relevance to the modem chip industry. 28 Along with neo-classical factors such as 

economies of scale, economies of scope, and learning, the modem chip industry is distinctive 

in that successive and increasingly costly investments in new generations of products are 

important. The process of developing a new standard or release within a standard is far from 

deterministic, which introduces other dimensions on which modem chip suppliers compete. 

Suppliers can therefore benefit both from aligning with the demands of OEMs, such as 

integration of the modem chip with other mobile device components, and from foreseeing the 

 

28 For examples of the application of industrial organization economics to analyze industries, see Scherer, F.M., 

and David Ross, Industrial Structure and Economic Performance, Boston: Houghton Mifflin, 1990, and 

Masten, Scott E., James W. Meehan, and Edward A. Snyder, “The Costs of Organization,” Journal of Law, 

Economics, & Organization, Vol. 7, No.1, Spring 1991, pp. 1–23. 

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technological evolution of cellular network technologies, which can allow a supplier to become 

the “first to market.” In this regard, modem chips may be differentiated based on features that 

are important to network carriers and OEMs. In general, the investments required for leadingedge products are greater and more specific. Hence, the development and supply of such 

products pose greater organizational challenges compared to the supply of lower-end products. 

39. In the balance of the section, I conduct an in-depth analysis of the modem chip industry, which 

includes descriptions of modem chip suppliers and purchasers as well as explanations of how 

individual modem chip suppliers and OEMs have chosen to organize and compete. The 

industry analysis yields insights into OEMs’ decisions regarding the number and identity of 

their modem chip suppliers as well as into the matching of modem chip suppliers to OEM 

purchasers. Given the critical role of R&D in the context of discrete technological advances, 

relatively few modem chip suppliers compete effectively for technological leadership at any 

one time but the identities of successful firms change. The analysis underscores the importance 

of (a) foresight, (b) efficient investment in technologies, and (c) execution of strategies. 

A. Industrial organization principles 

40. All industries involve a combination of competition and cooperation. Competition is well 

understood as the rivalry among firms selling similar products. Firms seek to increase sales 

by developing superior products, offering attractive terms, and servicing customers. In some 

models of competition, larger numbers of firms correspond to more intense competition. Such 

is the case when small, efficient firms sell the same, undifferentiated products. If one firm fails 

to offer competitive terms and products, then it will quickly lose customers.29 In other contexts, 

competition focuses on efforts to develop leading-edge products and customize products for 

buyers.30 The intensity of competition in such contexts is not derived from the potential for 

 

29 For example, in the Cournot model, which is a commonly used model of competition between firms selling 

undifferentiated products, the equilibrium price decreases as the number of firms increases. See, e.g., Tirole, 

Jean, The Theory of Industrial Organization, Cambridge, MA: MIT Press, 1988, p. 220-21. 

30 When buyers are differentiated in their preferences, as is the case for OEMs purchasing customized products, 

classical models of competition find that the number of firms competing is not directly linked to the intensity of 

competition, but instead to other variables such as the initial fixed costs of production. See, e.g., Tirole, Jean, 

The Theory of Industrial Organization, Cambridge, MA: MIT Press, 1988, pp. 282–285 (describing the 

“Circular City” model of competition with differentiated buyers). 

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frequent and large shifts in market shares, but rather from the divergent consequences of 

success and failure over time. 

41. Most cooperative efforts are organized within firms, whose activities are influenced by neoclassical principles such as the extent of economies of scale (the range of production over 

which average costs decline) and the extent of economies of scope (the efficiencies gained by 

producing multiple products compared to fewer or a single product). 31 Technological 

advancements may change the extent of such economies. Similarly, potential learning and 

knowhow realized from prior development efforts and production may influence what 

economic activities are undertaken by individual firms.32 

42. So-called transaction costs influence how an industry develops, how firms are organized, and 

how relationships between suppliers and customers evolve.33,34 Crucially, when buyers and 

sellers need to invest substantially in specific assets whose next best use is substantially lower, 

spot market transactions will not provide the incentives to make investments and will not 

 

31 While firms may achieve various efficiencies (economies of scale, economies of scope, learning, and 

adaptability), they also may be burdened by agency costs and bureaucracy. See, e.g., Baumol, William J. et al., 

Contestable Markets and the Theory of Industry Structure, Harcourt Brace Jovanovich, 1982, p. 71 showing 

that overall scale economies result from product-specific economies of scale and/or scope. Multi-unit (M form) 

firms are viewed as attempting to reduce such costs compared to single-unit (U form) firms. See, e.g., 

Williamson, Oliver E., “Transaction Cost Economics,” edited by Schmalensee, Richard and Robert D. Willig, 

Handbook of Industrial Organization, Vol. 1, Elsevier Science Publishers B.V., 1989, p. 154 (“[...T]he 

bureaucratic disabilities to which internal organization is subject vary with the internal structure of the firm. 

Multidivisionalization, assuming that the M-form is feasible, serves as a check against the bureaucratic 

distortions that appear in the unitary form (U-form) of enterprise.”). 

32 This “technological” theory of the firm is described, for example, in section 1.2 in Tirole, Jean, The Theory of 

Industrial Organization, Cambridge, MA: MIT Press, 1988, pp. 18–21, which details how the size and number 

of firms can be explained by efficiencies arising from economies of scale and technological synergies. 

33 See, e.g., Williamson, Oliver E., “Transaction Cost Economics,” in Schmalensee, Richard and Robert D. Willig, 

Handbook of Industrial Organization, Vol. 1, Elsevier Science Publishers B.V., 1989, p. 144 (“[...T]ransaction 

cost economics holds that a condition of large numbers bidding at the outset does not necessarily imply that a 

large numbers bidding condition will obtain thereafter. Whether ex post competition is fully efficacious or not 

depends on whether the good or service in question is supported by durable investments in transaction specific 

human or physical assets. Where no such specialized investments are incurred, the initial winning bidder 

realizes no advantage over nonwinners.”) and p. 176 (“Transaction cost economics [...] maintains the rebuttable 

presumption that nonstandard forms of contracting, of which vertical integration is an extreme form, have the 

purpose and effect of economizing on transaction costs. It thus focuses on whether the transactions in question 

are supported by investments in specific assets.”). 

34 This theory views firms as a way to reduce costs of long-run relationships. See, e.g., “The Firm as a Long-Run 

Relationship,” section 1.3 in Tirole, Jean, The Theory of Industrial Organization, Cambridge, MA: MIT Press, 

1988, pp. 21–29. 

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protect firms from the dependencies resulting from such investments.35 Whenever industry 

participants make specific investments, whether they involve technology, physical assets, 

timing, or location, they are subject to opportunism.36 In such cases, the choices made by firms 

among various alternative means of organizing economic activity – i.e., long-term contracts, 

so-called relational contracting, quasi-vertical integration, or vertical integration – will depend 

on the differences in the costs of these alternatives.37,38

43. Long-term contracts provide a horizon during which firms can earn returns on their 

investments and preserve opportunities for firms to compete for new contracts. Contracts, 

however, cannot anticipate all relevant contingencies and so the parties face potential costs of 

 

35 See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” 

Journal of Law and Economics, Vol. 22, No. 2, 1979, p. 241 (“[...W]hereas recurrent spot contracting is 

feasible for standardized transactions [...], such contracting has seriously defective investment incentives where 

idiosyncratic activities are involved. [...C]ost economies in production will be realized for idiosyncratic 

activities only if the supplier invests in a special-purpose plant and equipment or if his labor force develops 

transaction-specific skills in the course of contract execution (or both). The assurance of a continuing relation is 

needed to encourage investments of both kinds.”). 

36 The classic example is a firm that invests in tooling specific to one buyer. Absent contractual protections and 

putting aside reputational concerns, the buyer will reduce the price it is willing to pay the seller once the seller 

has made the necessary investment. See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The 

Governance of Contractual Relations,” Journal of Law and Economics, Vol. 22, No. 2, 1979, p. 234 

(“[...O]pportunism is especially important for economic activity that involves transaction-specific investments 

in human and physical capital [...] [footnote omitted]”) and p. 242 (“Although both [buyer and seller] have a 

long-term interest in effecting adaptations of a joint profit-maximizing kind, each also has an interest in 

appropriating as much of the gain as he can on each occasion to adapt.”). 

37 See, e.g., Coase, Robert, “The Nature of the Firm,” Economica, Vol. 4, No. 16, 1937, pp. 390–391 (“The main 

reason why it is profitable to establish a firm would seem to be that there is a cost of using the price mechanism. 

The most obvious cost of ‘organising’ production through the price mechanism is that of discovering what the 

relevant prices are. [...] The costs of negotiating and concluding a separate contract for each exchange 

transaction which takes place on the market must also be taken into account. [...] It may be desired to make a 

long-term contract for the supply of some article or service. This may be due to the fact that if one contract is 

made for a longer period, instead of several shorter ones, then certain costs of making each contract will be 

avoided. [Footnotes omitted].”). See also Simon, Herbert A., “Rationality as Process and as Product of 

Thought,” The American Economic Review, Vol. 68, No. 2, May 1978, p. 7 (“What is the predominant form of 

reasoning that we encounter in these theoretical treatments of social institutions? [...] Particular institutional 

structures or practices are seen to entail certain undesirable (for example, costly) or desirable (for example, 

value-producing) consequences. Ceteris paribus, situations and practices will be preferred when important 

favorable consequences are associated with them, and avoided when important unfavorable consequences are 

associated with them. [...I]ncreasing awareness of [a consequence and] new technical devices may tilt the 

balance between centralization and decentralization.”). 

38 Vertical integration refers to a firm’s contribution to multiple steps in the production of a final output. See, e.g., 

Scherer, F.M., and David Ross, Industrial Market Structure and Economic Performance, Boston: Houghton 

Mifflin, 1990, p. 94 (“Vertical integration in the static sense describes the extent to which firms cover the entire 

spectrum of production and distribution stages.”). 

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adjustments, haggling,39 and renegotiations.40,41 By contrast, vertically integrated firms have 

advantages both in generally adapting to new conditions and in developing and transferring 

knowledge within the firm, but such firms lose high-powered incentives associated with 

individual businesses.42 Intermediate approaches whereby a buyer owns the physical assets 

that are used by suppliers to produce customized products may work in some circumstances, 

but such approaches are less useful when the specific assets involve knowhow, learning, and 

technology.43

44. The principles of industrial organization predict, therefore, that industries will organize their 

economic activity and their transactions with suppliers and customers on a continuum.44 When 

assets are not specific and, as a result, buyers and sellers can easily match up, the industry will 

 

39 Asset-specific investments by suppliers and customers generate so-called quasi-rents. While contracts specify 

how these rents will be divided, the incomplete character of contracts means that the parties have incentives to 

engage in costly haggling. For a discussion, see, e.g., Klein, Benjamin et al., “Vertical Integration, 

Appropriable Rents, and the Competitive Contracting Process,” The Journal of Law & Economics, Vol. 21, No. 

2, October 1978, pp. 297–326.

40 See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” 

Journal of Law and Economics, Vol. 22, No. 2, 1979, pp. 250–251 (“Problems [...] arise when adaptability and 

contractual expense are considered. [...] Unless the need for adaptations has been contemplated from the outset 

and expressly provided for by the contract, which often is impossible or prohibitively expensive, adaptations 

across a market interface can be accomplished only by mutual, follow-on agreements.”). 

41 This theory relates firms to the impossibility of having complete contracts between business partners, i.e., 

contracts that specify an action for all possible contingencies. See, e.g., section 1.4, “The Firm as an 

Incomplete Contract,” in Tirole, Jean, The Theory of Industrial Organization, Cambridge, MA: MIT Press, 

1988, pp. 29–34. 

42 See, e.g., Williamson, Oliver E., “Comparative Economic Organization: The Analysis of Discrete Structural 

Alternatives,” Administrative Science Quarterly, Vol. 36, No. 2, 1991, p. 279 (“As compared with the market, 

the use of formal organization to orchestrate coordinated adaptation of unanticipated disturbances enjoys 

adaptive advantages as the condition of bilateral dependency progressively builds up. But these adaptation [...] 

gains come at a cost. [...I]nternal organization degrades incentive intensity, and added bureaucratic costs result 

[...].”). 

43 See, e.g., Williamson, Oliver E., “Comparative Economic Organization: The Analysis of Discrete Structural 

Alternatives,” Administrative Science Quarterly, Vol. 36, No. 2, 1991 for a discussion of intermediate forms of 

organizational structures. 

44 Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” Journal of 

Law and Economics, 1979, Vol. 22, pp. 244–245 (“[... S]pecial governance structures supplant standard 

market-cum-classical contract exchange when transaction-specific values are great.”) and pp. 247–248 (“The 

market is the classic nonspecific governance structure within which ‘faceless buyers and sellers ... meet ... for 

an instant to exchange standardized goods at equilibrium prices.’ By contrast, highly specific structures are 

tailored to the special needs of the transaction. Identity here clearly matters. Semi-specific structures, naturally, 

fall in between.”). 

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feature market transactions, minimal contracting, and, in the extreme, spot transactions. 

Industries in the intermediate range of the continuum will rely on contracts with greater 

complexity and protections to encourage investment in specific assets. While contracts 

typically do not minimize prices at all points in time, the parties gain protections and reduce 

transaction costs. 

45. Sourcing from multiple suppliers offers the advantage of actual competition among suppliers 

at a given point in time, but this strategy increases transaction costs and sacrifices the benefits 

from sourcing from the single supplier that offers the best terms, products, and service. These 

advantages and disadvantages are, therefore, traded off when firms shift to exclusive or nearly 

exclusive supply relationships, which typically are governed by long-term contracts. Such 

contractual relationships may be framed in terms of long-term relationships – so-called 

relational contracting – that encourage adaptation during the duration of the current contract 

and motivate cooperation generally based on the prospect of future contract renewals.45 But 

relational contracting does not prevent the buyer from changing suppliers or adding suppliers; 

nor does it prevent the seller from shifting its future supply to other buyers. Toward the end 

of the continuum is vertical integration. Some firms that are integrated into the supply of inputs 

may decide to both sell to other buyers and source inputs from other suppliers. At the end of 

the continuum, the firms’ production and use of inputs are both internal.46 

B. Implications for organizing economic activity in the modem chip industry 

46. While I go into more depth concerning various industry factors in the balance of this section, 

and profile individual modem chip suppliers in Section V, it is useful at this juncture to identify 

 

45 See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” 

Journal of Law and Economics, 1979, Vol. 22, p. 248 (“[... R]elational contracting develops for transactions of 

a recurring and nonstandardized kind[.]”) and p. 251 (“[...] parties have an incentive to sustain the relationship 

rather than to permit it to unravel, the object being to avoid the sacrifice of valued transaction-specific 

economies.”). 

46 See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” 

Journal of Law and Economics, 1979, Vol. 22, pp. 252–253 (“Incentives for trading weaken as transactions 

become progressively more idiosyncratic. The reason is that ,as the specialized human and physical assets 

become more specialized to a single use, and hence less transferable to other uses, economies of scale can be as 

fully realized by the buyer as by an outside supplier. [...V]ertical integration will invariably appear in these 

circumstances.”). 

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particularly relevant industry factors and indicate their overall implications on the organization 

of firms in the modem chip industry. 

47. The combination of (a) substantial up-front costs associated with the development and design 

of modem chips and the required physical capital costs, and (b) low marginal costs of 

production results in substantial economies of scale for suppliers.47 For example, while modem 

chip suppliers at the leading edge of the industry can spend substantial amounts on modem 

chip-related R&D,48 the marginal cost of producing a modem chip can be less than $10.49 

Evidence also indicates that suppliers benefit from economies of scope. For example, modem 

chip suppliers who produce multiple different modem chips can achieve efficiency in their 

R&D by transferring successful R&D investments in the development of one particular chip 

to other models. 50 In addition, the evidence on prices, summarized in Exhibit VI.B.1, 

demonstrates that the average price of modem chips within specific categories has declined 

substantially over time. For example, the average price for CDMA modem chips fell from 

about $13 in Q1 2008 to under $5 in Q4 2017. Over the period from Q1 2012 to Q4 2017, the 

average price for LTE 4G modem chips fell from about $25 to about $13.51 Both learning in 

production, whereby costs decline with cumulative output, and product-cycle effects, whereby 

price-cost margins on innovative products start out high but decline over time, exert downward 

pressures on prices. 

48. These fairly common industry factors (economies of scale and scope, learning, product-cycles) 

coexist with a less common factor in the modem chip industry: successive shifts from one 

generation of wireless standards to the next,52 with each shift involving a discontinuous change 

 

47 See, e.g., Hill, Charles W.L, et al., Strategic Management: Theory: An Integrated Approach, 9th Ed., Stamford, 

CT: Cengage Learning, 2010, p. 119 (“One source of economies of scale is the ability to spread fixed costs over 

a large production volume.”). 

48 See Exhibit III.E.1 and Section III.E.2.b.ii for additional details on R&D spending by modem chip suppliers. 

49 For example, Qualcomm’s marginal cost of producing six different thin modems for Apple was between $6 and 

$9 in Q4 2016. See Q2014FTC00550655–0660 at 0660, email from Sanjay Mehta, Qualcomm, April 29, 2013, 

with attached presentation slides for Board of Directors, p. 2. 

50 See Section III.C.2.b for additional details. 

51 See Exhibit VI.B.1. 

52 See Section III.C.2.a for additional details about wireless standards. 

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in the required product characteristics. For leading-edge, innovative suppliers, shifts to the 

next generation entail increasingly large investments in R&D as well as product design, the 

returns on which are highly variable and depend in large part on the supplier’s strategic 

foresight and efficiency in R&D.53 Success on the leading edge of the modem chip industry 

demands meeting the broad functional requirements of the next-generation modem chips, 

designing products that match customer requirements, and being first or nearly first to market. 

In addition, because the standards and customer requirements include a mix of necessary and 

discretionary functionalities, leading modem chip suppliers must make bets on product 

characteristics that they believe will be most salient. Modem chips within generations are 

differentiated on many characteristics, such as backward compatibility, data transmission 

speed, energy use, and the integration of modem chips with other processors used in mobile 

devices. In addition, products of a given generation are further customized for particular OEM 

purchasers. Because modem chip as well as mobile device technologies have been improving 

at a fast pace even within generations, the success of a modem chip supplier is greatly 

influenced by its ability to continue producing modem chips that achieve these withingeneration improvements. 

49. Consistent with accepted industrial organization principles, investments by both suppliers and 

buyers in relatively short-lived, specific assets are far from automatic due to bilateral concerns 

about opportunism. Indeed, at any point in time and over time, supplying increasingly 

innovative products involves particularly acute organizational challenges. 54 As in many 

innovative industries, the number of firms at the leading edge of innovation is limited. In the 

modem chip industry, firms with foresight, efficient R&D strategy, and the ability to execute 

 

53 For example, Exhibit III.E.1 shows that, in general, modem chip-related R&D spending has increased over the 

last decade for several modem chip suppliers. Moreover, anecdotal evidence suggests that R&D spending per 

new modem chip has also increased. For example, in 2013 Qualcomm noted that the stalling of Moore’s law 

has economic implications: “[t]ransistor scaling continues while economic scaling stalls” and that “[p]remiumtier product cost increases.” See Q2014FTC00014383, presentation titled “QCT Strategic Plan 2013,” 

Qualcomm, July 15, 2013, p. 7. 

54 The best strategy for meeting these organizational challenges may depend on the type of innovation, and 

organizational strategy may in turn influence innovation. See, e.g., Teece, David J., “Firm Organization, 

Industrial Structure, and Technological Innovation,” Journal of Economic Behavior and Organization, Vol. 31, 

1996, p. 216 (“The diversity of observed forms [of organizational arrangements] in and of itself suggests that 

different organizational arrangements are suited to different types of competitive environments and differing 

types of innovation.”) and p. 222 (“[...F]irm organization (not just product market structure) must be 

recognized as an important determinant of innovation [...].”). 

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are more likely to succeed and position themselves for future efforts. But prior success and 

the associated learning advantages, as discussed in my subsequent review of individual firm 

profiles, are neither necessary nor sufficient for future success. Staying on the leading edge 

requires more than having been on the leading edge. A supplier with success in one 

generational context may not, for example, forecast industry dynamics and invest accordingly. 

50. While leading-edge innovations are of great importance in the modem chip industry, 

opportunities for trailing-edge competition are substantial because product generations overlap. 

Some OEMs produce mobile devices that use older generations of modem chips that are less 

expensive for two reasons: the original investments in their R&D were lower, and the trailingedge modem chips are later in their product cycles. Hence, where demand is not all focused 

on the leading edge, the industry can accommodate larger numbers of trailing-edge competitors 

whose strategy is to spend less on R&D and who instead seek advantages in product design 

and product “resets,” whereby products within a given category are improved on various 

dimensions, e.g., power consumption. In addition, trailing-edge firms can compete by 

differentiating their products from their competitors’, for example, by providing sets of 

complementary technologies.55 

51. These implications from industrial organization principles are clarified by categorizing modem 

chip products on two dimensions: (1) leading edge vs. trailing edge and (2) low customization 

vs. high customization. The increasingly large investments in product development and 

product differentiation occur on the “leading edge” and where “high customization” is required. 

Where demand is focused on the leading edge and highly customized products, the industry 

will tend to have fewer actual suppliers of these products. By contrast, products on the “trailing 

edge” and where only “low customization” is required entail not only lower levels of 

investment but also less specificity. As a result, the industry will be expected to have larger 

 

55 See, e.g., Goldstein, Phil, “Intel, MediaTek, Broadcom and Nvidia Try to Catch Up to Qualcomm in LTE,” 

FierceWireless, January 10, 2014 (“[...] Qualcomm’s competitors are not standing still and are doing 

everything they can to catch up. [...E]xecutives from rival companies said they are seeing momentum on LTE 

and expect to increase that in 2014. [...] Rango [Executive Vice President of Broadcom’s mobile and wireless 

group] said Broadcom will differentiate itself in the LTE market by bringing ‘a tremendous suite of 

complementary technologies.’ He noted that Broadcom can support different Wi-Fi usage models, and that its 

GPS chips, which are all part of the single SoC, are more advanced than others since they use multiple satellite 

constellations.”). 

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numbers of actual competitors for these products. Note, however, that this categorization does 

not imply that separate markets exist for highly customized, high-end products and less 

customized, low-end products, and that I do not address market definition issues here.56

52. In the period leading up to a new generation of modem chips, aspirant innovative suppliers 

seek to engage their customers, OEMs, as well as network carriers, to understand what 

specifications will emerge as required to meet the standards and what additional specifications 

will be valued. This activity, along with efforts to develop customized products, requires codevelopment of knowledge between suppliers of modem chips and their customers. Not 

surprisingly, given the need to accurately assess future demand, make investments, and prepare 

for large-scale production, firms within the modem chip industry are not all equally capable. 

Indeed, modem chip suppliers are expected to have different capabilities in terms of competing 

at the leading edge and in differentiating their products. Some of these differences may be 

attributed to prior success and the importance of learning, which oftentimes go together.57 

However, the extent to which prior success and learning carry forward may depend on factors 

that are difficult to discern, including the ability of a firm to distill knowledge and manage 

knowledge transfers over time between its design and production teams. 

53. As increasingly large amounts of R&D are embodied in leading-edge modem chips, the 

challenge in the development and transfer of knowledge becomes more difficult. This is one 

of the most difficult challenges for any industry: Who owns the knowledge created in 

designing customized products? How should firms be compensated, if at all, for their 

investments? How can an innovative firm charge for knowledge without revealing its value to 

the potential recipient? This challenge is especially acute in the modem chip industry given 

the size of investments required for leading modem chip suppliers, the succession of such 

investments, and the ongoing efforts to differentiate products once threshold functional 

requirements are met. 

 

56 I understand that another expert, Dr. Tasneem Chipty, is addressing market definition issues on behalf of 

Qualcomm. 

57 Learning reduces costs for suppliers, potentially in design and production. The extent of learning, in general, 

depends on prior product development and prior production volumes. See, e.g., Arce, Daniel G., “Experience, 

Learning, and Returns to Scale,” Southern Economic Journal, 2014, Vol. 80, No. 4, p. 938 (“Indeed, capturing 

market share is legitimized as a managerial objective specifically because of the cost efficiencies that arise from 

the experience curve.”). 

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54. Consistent with general industrial organization principles, the industry analysis presented in 

the rest of this section reveals that firms’ organizational choices have changed over time and 

that firms make different choices based on their product strategies. These changes do not 

reflect that the organization challenges are new. Indeed, suppliers and buyers faced these 

challenges with the first generation of modem chips. But over time, the nature of the challenges 

has evolved due to the increased value of R&D into both hardware and software, the increased 

importance of design, and the substantial complementary investments made by buyers. Given 

the costs of adjustments, some firms have become more vertically integrated in recent years to 

encourage the development and transfer of a broad range of information within the firm. 

Supplier–OEM relationships and the extent of sourcing from multiple suppliers are also found 

to differ based on the OEM’s product strategies, e.g., whether the OEM purchases many types 

of modem chips, and its mix of lower-end and higher-end modem chips. If high-end economic 

activity is more relevant for a firm, then alternative approaches to organizing, contracting and 

relational contracting, become more viable. But as indicated at the outset, the determination 

of how firms organize their activity and supplier–buyer relationships depends on the 

differences in transaction costs among different types of organizational alternatives. If a buyer 

can induce investments by actual and potential suppliers, then the advantages to vertical 

integration are reduced compared to having long-term contracts and relational contracting.58 

Problems with these alternatives may arise, however, if either party can transfer the design and 

knowhow to others. 

55. Also, as would be expected given industrial organization principles, industry structure has 

evolved with relatively fewer actual competitors at the leading edge and relatively more actual 

competitors for lower-end products. The former is due not only to the large investments 

required and the winnowing effects of other important capabilities to be at the leading edge, 

but also to the tendency of buyers to source from only one or two suppliers of high-end 

products. The greater number of actual competitors at the trailing edge is due to the opposite 

 

58 See, e.g., Williamson, Oliver E., “Transaction-Cost Economics: The Governance of Contractual Relations,” 

Journal of Law and Economics, 1979, Vol. 22, p. 253 (Highlighting that “[t]he advantage of vertical integration 

is that adaptations can be made in a sequential way without the need to consult, complete, or revise interfirm 

agreements. Hence, to the extent buyers can induce adaptations without incurring high-transaction costs, longterm contracts and relational contracting may be feasible options.”). 

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influences, i.e., lower levels of investment, less stringent requirements in terms of judgment, 

and the willingness of buyers to source from multiple suppliers. 

56. The intensity of competition to supply high-end products need not, however, be less than the 

lower-end products. Based on industrial organization principles, innovative products typically 

have higher price-cost margins that decline over the products’ life cycle. The stakes for firms 

competing on the leading edge are also intense because of the difference between success and 

failure. One related implication is worthy of mention: the competition to secure new contracts 

with major buyers is expected to be particularly intense, especially for next generation products 

and for customized products. Buyers may face difficult choices such as whether to consider 

new suppliers given that doing so entails additional costs. Similarly, suppliers may be 

vulnerable to opportunism when they have co-developed new designs with buyers in advance 

of the new product. 

C. Mobile devices, modem chips, and the evolution of wireless standards 

1. Mobile devices and their components 

57. Mobile devices, or devices that provide mobile (cellular) access,59 take many forms: mobile 

phones or “handsets” (including basic phones, feature phones, and smartphones),60 tablets, 

laptops and other personal computers, Internet of Things (“IoT”) devices,61 and Machine-to-

 

59 Cellular access refers to the technology that allows mobile devices to communicate through areas made of cells 

and transceivers. See, e.g., “Cell,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 268 

(“Cell is the basis for the generic industry term ‘cellular.’ A city or county is divided into smaller ‘cells,’ each 

of which is equipped with a base station containing low-powered radio transmitters/receivers.”). 

60 Basic mobile phones support only voice calls and basic text messaging. Feature phones offer some 

functionality beyond this, such as email and internet connectivity. Smartphones offer yet more functionality, 

such as support for downloaded applications (“apps”), and typically include a user interface, displayed on an 

interactive screen, that allows consumers to launch applications, surf the Internet, take and view photographs, 

and other functions. The distinctions among these types of mobile phones, particularly between feature phones 

and smartphones, may not always be clear-cut. See, e.g., “Definition of: feature phone,” PCMag (“feature 

phone[:] A cellphone that contains a fixed set of functions beyond voice calling and text messaging but is not as 

extensive as a smartphone. For example, feature phones may offer Web browsing and email, but they generally 

cannot download apps from an online marketplace.”). 

61 See, e.g., “Internet of Things,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 678(“The 

Internet of Things is a generic name for a very broad industry ‘producing’ communicating, sensing, measuring, 

alarming, computing devices” attached to the Internet. “With it, you should be able to monitor and adjust 

processes in factories, monitor and adjust irrigation and fertilizing equipment in agriculture, alert patients to 

changes in their health [...].”). 

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Machine (“M2M”) products,62 among others. In the remainder of my report, I use the term 

“mobile devices” to refer generally to any of the above types of mobile devices and the term 

“handset” to refer specifically to mobile phones. 

58. Mobile devices may also incorporate additional types of connectivity, such as Wi-Fi or 

Bluetooth, that work only over short distances. By contrast, cellular connectivity allows a 

device to communicate with a cell site that may be tens of miles away – and to switch 

seamlessly among cell sites as the device travels across long distances.63 Cellular networks 

therefore provide connectivity over a large geographical area, making cellular access 

fundamental to mobile devices’ functionality. 

59. A key component that allows a mobile device to connect to a cellular network is the modem 

chip.

64 In a mobile device, the modem is a piece of hardware and associated software, typically 

implemented as a chip or chipset, that encodes information from the mobile device for 

transmission over radio, and vice-versa decodes radio into information for the mobile device 

to work with. That information may take the form of voice, text, or other data.65

60. Modem chips therefore are critical to allowing mobile devices to send and receive calls, text 

messages, and data over cellular networks. Modem chips can be specifically designed or 

 

62 Machine to Machine products are devices connected to other devices and the Internet. They include fitness 

trackers, healthcare devices, and household appliances, among many other products. See, e.g., “Wireless 

M2M/IoT Markets,” Forward Concepts, 2015, p. 1. 

63 See, e.g., Kernighan, Brian W., Understanding the Digital World: What You Need to Know About the Internet, 

Privacy, and Security, Princeton University Press, 2017, p. 132 (“Phones talk to the closest base station, and 

when they move from one cell to another, a call in progress is handed off from the old base station to the new 

one [...]. Cell sizes vary, from a few hundred meters to a few tens of kilometers.”). 

64 Even though I understand that modems are sometimes implemented on more than one chip, i.e., in a chipset, 

whenever unambiguous I call “modem chip” the unit involved in the modem functionalities of a mobile device, 

for brevity. 

65 A modem chip is a chip that performs the function of a modem. For a definition of modem, see, e.g., “Modem,” 

in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 824 (“A modem modulates (varies the 

characteristics of) an analog signal to carry digital information from a computer or other digital source; on the 

receiving end, a modem demodulates an analog carrier signal to extract the digital information the signal is 

carrying so that a computer or other digital device can use it.”). 

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optimized for different types of devices, such as from high-end to mid- or low-cost 

smartphones or non-handset devices such as wearables or IoT devices.66,67

61. In order for a modem chip to communicate with a cellular network, it must use the same 

communication protocols and technologies as the other network components. To facilitate 

compatibility, protocol and technology specifications are enshrined in wireless standards.68 As 

addressed in more detail below, wireless standards have evolved extensively over time. For a 

modem chip to utilize a new wireless standard or release, network operators must have 

deployed a network using that standard or release, the chip must support that standard or release, 

and the device incorporating that chip must be certified by the network operators.69 As 

discussed below, both mobile networks and modem chips can be capable of supporting 

multiple wireless standards. A modem chip capable of supporting a mobile device that can 

connect with multiple wireless standards is known as a “multi-mode” modem chip.70

 

66 See, e.g., Smith, Ryan, “Qualcomm Announces 205 Mobile Platform: Entry-Level LTE for India & Emerging 

Markets,” AnandTech, March 20, 2017. 

67 For example, Qualcomm repurposed its smartphone Snapdragon chip to develop the Snapdragon Wear 2100, 

which is dedicated solely to wearable devices such as Android Wear smart watches. See, e.g., Kaul, Aditya, 

“Qualcomm’s New Wearable SoC Could Trigger Growth in Standalone Wearables,” Tractica, February 16, 

2016. Similarly, Intel’s Edison and Curie platforms were designed for IoT and wearable technology. See, e.g., 

Smith, Ryan, “IDF 2014: Intel Edison Development Platform Now Shipping,” AnandTech, September 9, 2014. 

68 See, e.g., “What are Standards? Why are They Important?,” IEEE Standard Association, October 3, 2011 

(“Standards form the fundamental building blocks for product development by establishing consistent protocols 

that can be universally understood and adopted. This helps fuel compatibility and interoperability and 

simplifies product development, and speeds time-to-market.”). 

69 A standard must be supported by both ends of the communication link, the modem chip and the network (i.e., 

cell towers, etc.). Network operators certify this interoperability. For example, Verizon defined some criteria 

that modem chip manufacturers must satisfy. See, e.g., VZ-00004851–4880 at 4855 (“The goal of the chipset 

certification testing and approval process is to define a uniform set of criteria that will be used for all chipsets to 

evaluate its capabilities and conformance to industry and Verizon Wireless specifications, before it is approved 

to be listed in the Verizon Wireless CERTIFIED chipset List.”). 

70 See, e.g., “Qualcomm Introduces World’s First Complete Multi-mode 3G/LTE Integrated Solution for 

Smartphones,” Qualcomm Press Release, February 16, 2009 (“‘Multi-mode 3G/LTE chipsets will be crucial to 

smooth deployments of LTE by operators who are looking to complement their existing 3G networks, and the 

MSM8960 delivers maximum flexibility by supporting [CDMA2000] EV-DO Rev. B and HSPA+ in addition to 

LTE’ [...].”). See also “Intel Announces First Commercial Availability of 4G LTE Modem; Introduces Module 

for 4G Connected Tablets and Ultrabooks,” Intel Press Release, October 30, 2013 (“The Intel XMM 7160 is one 

of the world’s smallest and lowest-power multimode, multiband solutions [...]. The solution provides seamless 

connectivity across 2G, 3G and 4G LTE networks [...].”). 

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62. Within a mobile device, the modem chip is located on the motherboard (referred to as the 

“logic board” in Apple products), which contains, among other components, the chips that 

control and direct the device’s functions.71 Like other chips, modem chips are designed as 

integrated circuits, i.e., complicated electrical circuits packed onto a single chip.72 These 

integrated circuits are manufactured by an iterative process: a pattern is projected onto a silicon 

wafer, the silicon’s conductive properties are changed according to this pattern, and this is 

repeated to build up the circuit; connective wires are then created by laying down layers of 

metal and following a similar process.73 Chip manufacturing processes are differentiated by 

“technology nodes,” which originated as an indicator of transistor length, with smaller nodes 

associated with higher speeds and lower power consumption.74 For example, according to 

Samsung, its 28nm node yields speed gains of 30 percent or power-efficiency gains of 35 

percent over its 45nm node.75 

63. A physical silicon chip is one requirement to connect a mobile device to a cellular network. 

Another requirement is the software (the “stack”) programmed to operate the hardware (i.e., 

chip), allowing the device to communicate with the network.76 In industry parlance, the 

 

71 See, e.g., Prowse, David L. et al., Computer Structure and Logic, 2nd Edition, Pearson, 2014, p. 85, Figures 3–5. 

72 The terms “chip” and “integrated circuit” are often used interchangeably. See, e.g., “Integrated Circuit,” in 

Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 663 (“An integrated circuit is a piece of 

silicon or other semiconductor called a chip on which is etched or imprinted a network of electronic 

components such as transistors, diodes, resistors, etc. and their interconnections.”). 

73 “The History of the Integrated Circuit,” Nobelprize.org, May 5, 2003 (Explains the “very complex process” of 

“[b]uilding an integrated circuit.”). 

74 See, e.g., Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge Wireless Essentials 

Series, 2012, pp. 109–110. See also Cunningham, Andrew, “Samsung’s New 10nm Process Promises Big 

Power Efficiency Improvements,” Ars Technica, October 17, 2016 (“According to Samsung, 10nm chips can fit 

30 percent more transistors within the same physical area as a 14nm chip. Chip designers will be able to create 

chips that are up to 27 percent faster or chips that use up to 40 percent less power, though most chips will 

probably do a little of both instead of maximizing one or the other.”). 

75 These figures are for Samsung’s 28nm and 45nm “LP” (Low Power) process nodes. See “Samsung Qualifies 

28nm LP Process Technology for High Performance Mobile Applications,” Samsung, June 6, 2011 (“Samsung 

Foundry has tuned its 28nm LP process technology to deliver a cutting-edge process platform with 35 percent 

active/standby power reduction at the same frequency or 30 percent performance boost at the same leakage over 

45nm LP SoC designs.”). 

76 Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge University Press, 2012, p. 147 

(“The protocol stack software is responsible for negotiating with the network over a wide range of different 

tasks.”). 

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“modem chip” may be used colloquially to refer not only to the physical chip, but also to the 

software stack, and I will adopt the same convention whenever unambiguous.77 There are 

multiple other requirements for cellular connectivity, including the antenna and the Radio 

Frequency (“RF”) components.78

64. Beyond the modem chip, mobile devices require a number of other components. Some of these 

components are relevant mostly to advanced devices, such as smartphones. Broadly, these 

components fall into the categories of the operating system and the hardware. 

65. Operating System: A device with a user interface, such as a feature phone or a smartphone, 

requires an operating system (“OS”). On a feature phone, the OS is typically specific to the 

device OEM; on a smartphone, the OS is often, but not always, third-party software. 79 

Globally, the leading OS on smartphones is Google’s Android, followed by Apple’s iOS (a 

prime example of a smartphone OS that is not third party) and trailed more distantly by 

Microsoft’s Windows OS and BlackBerry’s OS.80 Devices with an OS may also support the 

download and installation of additional software, known as applications, or “apps.” 

 

77 See, e.g., Deposition of Steve Schell, Former Wireless Systems Architect in the Hardware Team at Apple, 

February 28, 2018, pp. 55–56 (“Schell Deposition, Apple”) (“Q. [...] And when you say baseband are you 

referring to cellular modem? Let me ask it this way. When you say baseband what do you mean, Mr. Schell? 

A. When I use the term baseband I refer perhaps somewhat ambiguously to either the chip functionality and/or 

the software functionality that executes cellular protocol stack and also executes control over the RF transceiver 

chips and the RF front-end components in order that that -- the totality of that can communicate with the 

cellular networks and communicate in Apple’s product architecture, communicate with the apps processor.”). 

78 See, e.g., “Antenna,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 118 (“An antenna 

is a device that converts guided signal energy into unguided (i.e., free-space) signal energy, or vice-versa. In 

basic telecommunications, an antenna is a device for transmitting, receiving or transmitting and receiving radio 

frequency (RF) signals.”). See also Bowick, Christopher, “What’s in an RF Front End?,” EE Times, February 

4, 2008 (“The RF is generally defined as everything between the antenna and the digital baseband system.”); 

“RF Products,” Qualcomm, available at https://www.qualcomm.com/products/rf. 

79 Lee, Nicole, “The 411: Feature Phones vs. Smartphones,” CNET, March 1, 2010 (“A smartphone, as CNET 

defines it, has a third-party operating system. This includes all of the phones running Android, as well as those 

that run on the Windows Mobile and Symbian operating systems. [...] Feature phones, on the other hand, are a 

midway point between smartphones and basic phones. They usually have a limited proprietary operating 

system, and not all feature phones support third-party software.”). 

80 In Q4 2016, 81.7 percent of smartphones were sold with Android OS, 17.9 percent with iOS, and 0.3 percent 

with Windows. Blackberry and other operating systems together accounted for only 0.1 percent. “Gartner Says 

Worldwide Sales of Smartphones Grew 7 Percent in the Fourth Quarter of 2016,” Gartner Press Release, 

February 15, 2017. 

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66. Hardware: A mobile device may incorporate a number of physical components beyond the 

modem chip: 

i. Application Processor (“AP”): An application processor, which includes a central 

processing unit (“CPU”), allows a device to run an operating system and 

applications.81 It also interacts with various hardware components.82 

ii. Graphics Processing Unit (“GPU”): A single-chip processor that powers images 

displayed by the devices, particularly in the context of videos and video games.83

iii. RF components, including the RF transceiver and the RF Front End (“RFFE”): A 

group of components located between the modem chip and the external-facing 

antenna that transmits and receives radio signals between the modem and the cell 

towers.84

iv. Power management components: The power management integrated circuit 

(“PMIC”) regulates power consumption by the other hardware components, while 

the power amplifier chip increases power for specific uses.85

 

81 See, e.g., “Cellular Handsets & Chip Markets,” Forward Concepts, 2006, p. 231 (“We define application 

processors as DSP-centric RISC or DSP/RISC combo chips (or cores) employed primarily for multimedia, data 

processing and other noncommunications functions and employ a high-level operating system (O/S).”). 

82 Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge Wireless Essentials Series, 

2012, pp. 124–125 (“A key function of an application processor is to provide high-performance capabilities for 

the capture, storage, transmission and playback of multimedia content. [...] The application processor is also 

responsible for interfacing to an increasingly large number of peripheral devices such as display, touch-screen 

controller, camera, audio, external memory, USB, sensors, etc.”). 

83 Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge Wireless Essentials Series, 

2012, pp. 126–127 (“With the advent of early mobile data services [...] and the addition of digital cameras to 

mobile handsets, the requirements for multimedia processing increased dramatically. [...] As requirements 

became established, it also became clear that high-performance multimedia was critical [...] and thus the market 

conditions were right for a new breed of separate mobile media processors, now termed graphics processor units 

(GPUs). GPUs are systems on a chip solutions – with their own CPU, [...], memory, power management, 

discrete hardware and display engines.”). 

84 See, e.g., “RF Products,” Qualcomm, available at https://www.qualcomm.com/products/rf. 

85 See, e.g., “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 23 (“Modern 

cellular handsets and other mobile devices require efficient power management devices as companions to all 

processors [...]. As a discrete device, it can be called a system power management unit (PMU) or power 

management IC (PMIC).”) and p. 281 (“The Power Amplifier (PA) enables the handset to transmit digitally 

encoded voice and data signals to the base station tower to route a call to another phone number or Internet 

address. PA’s are often the most critical radio frequency component in the phone because they normally use the 

greatest amount of battery power in a handset and they generally dissipate the greatest amount of heat.”). 

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v. Global positioning system (“GPS”): GPS allows a device to figure out its 

geographic location, thereby supporting functionality that allows users to track their 

locations and receive real-time directions while travelling.86

vi. Camera: Many devices have a built-in camera, which may be controlled by a 

separate chip.87

vii. Memory: Random access memory (“RAM”) provides temporary storage of active 

data, supporting the OS and other applications,88 while flash memory allows for the 

long-term storage of data.89

viii. Battery: Mobile devices are powered by batteries, which are typically charged via 

Universal Serial Bus (“USB”) or other connection.90

ix. Components to support non-cellular connectivity: Mobile devices that support noncellular connectivity, such as Wi-Fi or Bluetooth, must incorporate chips 

supporting that connectivity.91

x. External components: External components include the chassis, which encloses the 

device’s internal components,92 and the screen. In smartphones and tablets, the 

 

86 See, e.g., Kernighan, Brian W., Understanding the Digital World: What You Need to Know About the Internet, 

Privacy, and Security, Princeton University Press, 2017, p. 230 (“GPS: Global Positioning System; uses time 

signals from satellites to compute position on the surface of the earth. It’s one-way; GPS devices like car 

navigators do not broadcast to the satellites.”). 

87 See, e.g., “Cellular Handsets & Chip Markets,” Forward Concepts, 2006, p. 239 (“The camera application 

processors (CAPs), typically without image sensor, are used in large quantities in the camera phone market 

segment to process images from the associated image sensors.”).. 

88 “RAM,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 1044. 

89 “Flash Memory,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 533. 

90 See, e.g., Kernighan, Brian W., Understanding the Digital World: What You Need to Know About the Internet, 

Privacy, and Security, Princeton University Press, 2017, p. 232 (“USB: Universal Serial Bus, a standard 

connector for plugging devices like external disk drives, cameras, displays and phones into computers.”). 

91 Sandhaus, Erin et al., “Integrated Combo Solutions Bring Seamless Mobile Connectivity to Wireless Handsets,” 

Texas Instruments White Paper, 2009 (“Consumers are increasingly demanding greater connectivity from their 

wireless phone handsets. Bluetooth®, GPS, FM radio and mobile wireless LAN (mWLAN) technologies 

increase the utility of the cellphone by offering additional information, wider-ranging connections, or both. [...] 

System-on-chip (SoC) combo solutions that integrate one or more mobile connectivity technologies on a single 

device have proven their value in satisfying these requirements, and a new generation of combo chips is 

providing even greater functionality.”). 

92 “Chassis,” Oxford English Dictionary Online, available at https://en.oxforddictionaries.com/definition/chassis. 

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screen is typically a touchscreen that allows the user to interact with the OS and 

applications.93 

67. Some hardware components, such as the AP, the GPS unit, the GPU, the Wi-Fi and/or 

Bluetooth chip, and audio and video processors, can be incorporated onto a single chip along 

with the modem. A chip that integrates multiple components may be called a “system on a 

chip” (“SoC”).94 The term SoC can be used broadly to refer to various combinations of 

integrated components, but it commonly refers to the integration of the modem chip with the 

AP and other components.95 Such a setup can also be described as a modem with an integrated 

AP, and more generally, “integrated” may also refer to the incorporation of multiple 

components onto a single chip.96 By contrast, when multiple mobile device components are 

not combined in a single chip, the modem chip is referred to as a “thin modem.”97

2. Wireless standards and the modem chip industry 

a. Wireless standards 

68. Over the past 25 years, wireless communication technologies have undergone continuous, fastpaced evolution – for example, from transmitting only analog voice to allowing real-time video 

chat. Improvements in the functionality of mobile devices have been made possible, in part, 

by evolutions in wireless standards. 

69. A wireless standard specifies the protocol used to transmit information on the available RF 

spectrum. The wireless standard thereby facilitates wireless communication and allows firms 

 

93 McGrath, Dylan, “ABI: 97% of Smartphones to Have Touchscreens,” EE Times, August 29, 2011 (“By 2016, 

smartphones with touchscreens will account for 97 percent of all smartphone volume, up from 75 percent in 

2010, according to market research firm ABI Research Inc.”). 

94 Cunningham, Andrew, “The PC Inside Your Phone: a Guide to the System-on-a-chip,” Ars Technica, April 10, 

2013 (“[...I]t’s now possible to cram more and more of these previously separate components into a single chip. 

[...] It’s these technological advancements that have given rise to the system-on-a-chip (SoC), one monolithic 

chip that’s home to all of the major components that make these devices tick.”). 

95 “SoC,” in Newton, Harry, Newton’s Telecom Dictionary, 31st Edition, 2018, p. 1173. 

96 See, e.g., “Mobile Processors 101: Why Smartphones Are Smarter with an All-in-one Processor,” Qualcomm 

OnQ Blog, June 13, 2013 (“Sometimes these components exist as different chips in a device [...]. When they’re 

grouped together onto the processor, it’s referred to as ‘integrated.’”). 

97 Deposition of Thomas Lindner, Head of Sales and Marketing Department at Intel, March 23, 2018, p. 13 

(“Lindner Deposition, Intel”) (“Q. And so when you refer to a slim modem or a thin modem, do you mean a 

modem that does not have an integrated application process? A. Correct.”). 

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(device manufacturers, network carriers, and cellular base station equipment manufacturers) 

to participate in the industry by enabling them to develop products, services, and equipment 

compatible with those made by other firms in the industry. 98 For mobile devices to 

communicate with a particular cellular network’s infrastructure both the mobile device and the 

infrastructure equipment, as well as the network itself, must conform to the same wireless 

standard. 99 Cellular networks are deployed by carriers, also known as mobile network 

operators, that must acquire an RF spectrum license to provide cellular services for consumers 

on their networks.100 Network carriers in the U.S. include AT&T, Sprint, T-Mobile, U.S. 

Cellular, and Verizon;101 carriers in other countries include Airtel, América Móvil, China 

Mobile, Telefónica, and Vodafone.102 

70. Convergence to a given wireless standard results from interplay among standard-development 

organizations (“SDOs”), industry groups, government bodies, carriers, OEMs, and chip 

 

98 See, e.g., Yoo, Youngjin, et al., “The Role of Standards in Innovation and Diffusion of Broadband Mobile 

Services: The Case of South Korea,” Journal of Strategic Information Systems, Vol. 14, 2005, p. 323 (“Our 

study suggests that successful innovation and diffusion of broadband mobile services are collective 

achievements and firms need to deploy strategies that enable them to mobilize broad socio-technical networks 

that include technological, institutional, political and financial resources. At the heart of such strategies, 

standards play critical roles as they mediate different interests and motivations among participating actors.”). 

99 From an economic perspective, wireless standards can be seen to solve a “coordination problem.” This 

coordination problem arises because a mobile device’s value to a consumer is dependent on whether it can 

communicate with a larger number of other devices – i.e., its value increases with the size of the network using 

a compatible technology. The value that consumers derive from their devices is dependent on coordination of 

devices using common technology. See, e.g., Tirole, Jean, The Theory of Industrial Organization, Cambridge, 

MA: MIT Press, 1988, p. 405, discussing goods with positive externalities (“Positive network externalities arise 

when a good is more valuable to a user the more users adopt the same good or compatible ones. The externality 

can be direct (a telephone user benefits from others being connected to the same network ...). ... Because of 

their interdependent utility functions, users must anticipate which technology will be widely used by others. 

This introduces coordination problems. ... In the presence of network externalities, standards (i.e., a choice of a 

particular technology to be adopted by everyone) are often mandated (or agreed upon) by the government or by 

private bodies such as industry committees.”). 

100 See, e.g., “Report and Order,” In the matter of Policies Regarding Mobile Spectrum Holdings and Expanding 

the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions, Federal Communications 

Commission, June 2, 2014, p. 3 (“Competition among mobile wireless providers [...] depends critically upon 

the availability of suitable spectrum as a necessary input in the provision of mobile wireless services.”). 

101 See, e.g., Viswanathan, Priya, “Mobile Carriers in the U.S.,” Lifewire, March 23, 2018. 

102 See, e.g., “The Largest Mobile Network Operators in the World,” World Atlas, April 25, 2017. 

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suppliers.103 SDOs work to develop and formulate standards for wireless communications.104 

The process involves specifying methods of encoding information and operating the network, 

with the goals of minimizing interference and maximizing signal quality, coverage area, 

efficient use of available RF spectrum, call density, and other features.105

71. The dramatic evolution of cellular network technologies is evidenced by improvements in 

functionalities that characterized successive generations (the “G” in 1G, 2G, etc.) and 

advancements within each generation, known as releases.106 Exhibit III.C.1 summarizes the 

wireless standards and the functionalities associated with each generation of standards: 

 1G systems, introduced in the early 1980s, were limited to analog voice services. 1G 

systems were developed separately in different parts of the world, without the oversight 

of a global standard-development body.107 

 2G standards, introduced in the early 1990s, improved voice call capacity and quality, 

allowed the sending of text messages, and marked the beginning of basic data 

transmission for simple applications such as providing stock quotes and weather 

 

103 For example, some members of the European Telecommunication Standard Institute (“ETSI”) are MediaTek, 

Microsoft, Verizon UK, the US Cellular Corporation, and many others. See “Current members,” ETSI, 

available at http://www.etsi.org/membership/current-members. 

104 The main SDO groups within the wireless communications industry are the Third Generation Partnership 

Project (3GPP) and the Third Generation Partnership Project 2 (3GPP2). 3GPP is a consortium of seven SDOs 

called “Organizational Partners,” including Association of Radio Industries and Businesses (ARIB) of Japan, 

Alliance for Telecommunications Industry Solutions (ATIS), of the U.S., China Communications Standards 

Association (CCSA), European Telecommunications Standards Institute (ETSI), Telecommunications 

Standards Development Society, India (TSDSI), Telecommunications Technology Association (TTA) of South 

Korea, and Telecommunication Technology Committee (TTC) of Japan. “3GPP Partners,” 3GPP, available at 

http://www.3gpp.org/about-3gpp/partners. 3GPP2 is a consortium of five SDOs, including ARIB, CCSA, TTA, 

TTC, and North America’s Telecommunications Industry Association (TIA). See, e.g., “About 3GPP2,” 

3GPP2, available at https://www.3gpp2.org/Public_html/Misc/AboutHome.cfm. 

105 For example, the breadth of characteristics considered while developing standards is evident in 3GPP’s 

organizational structure. The 3GPP hierarchy is made up of three specification groups (Radio Access Network, 

Service and Systems Aspects, and Core Network and Terminals) that each focus on particular areas of 3GPP 

specifications. See, e.g., “Specifications Groups Home,” 3GPP, available at 

http://www.3gpp.org/specifications-groups/specifications-groups. 

106 The term “releases” is commonly used to refer to advancements in standards. For example, for 3GPP standards, 

see “3GPP Standards & Release Numbers,” Radio-Electronics, available at http://www.radioelectronics.com/info/cellulartelecomms/3gpp/standards-releases.php (“The 3GPP standards are continually 

being improved. The 3GPP standards improvements are incorporated into specific releases of the standards.”). 

107 Ghosh, Arunabha, et al., Fundamentals of LTE, Pearson, 2011, p. 5. The most prominent 1G systems included 

the Advanced Mobile Phone Service (AMPS) in the U.S. and its variant Total Access Communication Systems 

(ETACS and NTACS), deployed throughout Europe and Japan, and the alternative Nordic Mobile Telephone 

(NMT-400) system deployed in several Scandinavian countries. 

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updates.108 The two main competing 2G families of standards, Global System for 

Mobile Communications (GSM) and cdmaOne, 109 used fundamentally different 

technologies to allocate the available spectrum efficiently.110

 3G standards emerged in the early 2000s and facilitated mobile broadband.111 Two 

competing industry standards groups, 3GPP and 3GPP2,112 set the 3G successors to 

GSM and cdmaOne, respectively. 3GPP’s main 3G family of standards was UMTS 

(also known as WCDMA). Later, it also adopted TD-SCDMA, developed in China for 

deployment there.113 3GPP2’s 3G family of standards is CDMA2000.114 

 4G standards of today improve on 3G with more efficient use of the spectrum and vastly 

increased peak data rates and network capacity. 115 Around 2008, three different 

technologies were proposed as candidate wireless standards for 4G: WiMAX, 116

 

108 Ghosh, Arunabha, et al., Fundamentals of LTE, Pearson, 2011, pp. 6–7. 

109 The GSM standard was originally deployed in Europe beginning in 1990 and quickly gained acceptance beyond 

Europe. See, e.g., Ghosh, Arunabha et al., Fundamentals of LTE, Pearson, 2011, pp. 7–8. In the United States, 

T-Mobile and AT&T are the two major carriers that deployed GSM networks. See, e.g., Sascha, Segan, 

“CDMA vs. GSM: What’s the Difference?,” PCMag, July 11, 2017. The 2G CDMA standard is Interim 

Standard 95 (IS-95), also known as cdmaOne, which was adopted by the Telecommunications Industry 

Authority (TIA) in the United States in 1993. It was subsequently deployed worldwide, but was primarily 

adopted by subscribers in North America, South Korea, Brazil, and India. In the United States, Sprint and 

Verizon are the two major carriers that deployed this standard. See, e.g., Ghosh, Arunabha et al., Fundamentals 

of LTE, Pearson, 2011, pp. 7, 9–10; Deposition of Eric Koliander, Vice President of Sales at Qualcomm, 

February 1–2, 2018, p. 134 (“Koliander Deposition, Qualcomm”). 

110 GSM implemented TDMA (Time Division Multiple Access) technology. cdmaOne took its name from the 

competing CDMA (Code Division Multiple Access) technology developed by Qualcomm. See, e.g., Ghosh, 

Arunabha et al., Fundamentals of LTE, Pearson, 2011, pp. 8–9 (“The GSM air-interface is based on a TDMA 

scheme where eight users are multiplexed on a single [...] frequency channel by assigning different time slots to 

each user. [...] Unlike in other digital wireless systems like GSM, in an IS-95 CDMA system multiple users 

share the same frequency channel at the same time.”). 

111 Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge Wireless Essentials Series, 

2012, pp. 30, 34. 

112 3GPP worked on the successor technology to the TDMA-based GSM standard. 3GPP2 worked on the 

successor technology to the CDMA-based IS-95 standard. See, e.g., Ghosh, Arunabha et al., Fundamentals of 

LTE, Pearson, 2011, pp. 11, 13. 

113 See, e.g., Chang, Lu, “TD-SCDMA and China 3G,” Marvell White Paper, January 2012, p. 2 (“Today, there are 

three major 3G standards worldwide. [...] China [...] also developed their own 3G technology, Time-Division 

Synchronous Code Division Multiple Access (TD-SCDMA), part of the Universal Mobile Telecommunications 

System (UMTS).”). 

114 See, e.g., Ghosh, Arunabha et al., Fundamentals of LTE, Pearson, 2011, p. 11. 

115 See, e.g., Ghosh, Arunabha et al., Fundamentals of LTE, Pearson, 2011, p. 20 (“All three standards [HSPA+, 

WiMAX, and LTE] support a variety of signal processing techniques to improve performance and spectral 

efficiency.”). 

116 WiMAX stands for Worldwide Interoperability for Microwave Access. It was a competing standard developed 

by Intel and The Institute of Electronic and Electrical Engineers (IEEE). IEEE 802, a group within the IEEE 

that sometimes acts as an SDO, began efforts to develop mobile broadband standards in 2001. Intel 

championed the development of WiMAX in the late 2000s. See, e.g., Poole, Ian, “WiMAX History,” RadioREDACTED VERSION OF DOCUMENTS SOUGHT TO BE SEALED

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LTE,117 and UMB.118 LTE is currently the prevalent family of 4G standards for most 

global carriers.119 It utilizes User Equipment (UE) categories to describe combined 

uplink and downlink capabilities as well as other features of devices.120 4G LTE began 

as data-only, requiring mobile devices to rely on backward compatibility with 2G/3G 

networks for voice calls. 121 More recently, Voice over LTE (VoLTE) has been 

deployed to transmit calls via LTE, and its gradual deployment in the U.S. began 

around 2014.122 VoLTE allows carriers to remove support for 2G and 3G services, 

freeing up spectrum for later standards. Some carriers have already set this process in 

motion.123

 Electronics, available at http://www.radio-electronics.com/info/wireless/wimax/history.php. See also “WiMAX 

History in the Making,” Intel, May 7, 2008 (“Intel Capital alone is investing $1 billion in the new Clearwire, 

making it the largest investment ever by Intel’s global investment organization, and its third investment in 

Clearwire. [...T]his new company is going to focus on accelerating the deployment of the first nationwide 

mobile WiMAX network in the U.S.”). 

117 LTE stands for Long Term Evolution. LTE was developed by 3GPP as a successor to the existing 3G systems 

that 3GPP had developed. See, e.g., Table 1.7 in Ghosh, Arunabha et al., Fundamentals of LTE, Pearson, 2011, 

p. 24. 

118 UMB stands for Ultra Mobile Broadband and was developed by 3GPP2, of which Qualcomm is a member. It 

was developed as the direct successor to CDMA2000 3G technology. UMB eventually failed to gain traction 

among CDMA carriers like Verizon, which switched to LTE instead. See, e.g., “Participating Member 

Companies,” 3GPP2, available at https://www.3gpp2.org/Public_html/Misc/memberindex.cfm. See also 

Ghosh, Arunabha et al., Fundamentals of LTE, Pearson, 2011, p. 16 (“[...T]he 3GPP2 community had 

developed an evolution of IS-95 called IS-95 Rev. C, aka Ultra Mobile Broadband (UMB) [...].”); Bangeman, 

Eric, “Verizon Decides on LTE for 4G Wireless Broadband,” Ars Technica, November 29, 2007. 

119 Casaccia, Lorenzo, “Understanding 3GPP – Starting with the Basics,” Qualcomm OnQ Blog, August 2, 2017 

(“After several technical challenges and solutions, the LTE system developed by 3GPP became the 4G standard 

most predominantly used and deployed, and has since become the global standard for 4G [...].”). 

120 As of August 2016, 3GPP listed twelve LTE UE categories, with Category 1 having the lowest uplink/downlink 

rates and Category 12 having the highest uplink/downlink rates. See, e.g., 3GPP, “LTE UE-Category,” August 

2016, available at http://www.3gpp.org/keywords-acronyms/1612-ue-category (“Category information is used 

to allow the eNB to communicate effectively with all the UEs connected to it. The ue-Category defines a 

combined uplink and downlink capability as specified in 3GPP TS36.306.”). 

121 See, e.g., “Voice and SMS in LTE,” Rhode & Schwarz White Paper, May 2011 p. 3 (“LTE is designed as a pure 

packet switched system. Legacy circuit switched services are no longer supported. This implies that support of 

voice within LTE has to be done with voice over IP. [...M]any network operators have decided to deploy their 

first commercial LTE networks focusing on support for data services [...V]oice service support is provided by 

the legacy networks in this first phase of LTE deployment.”). 

122 VoLTE offers VoIP (Voice over IP, which allows voice signals to be transmitted as data packets) on LTE 

networks, thus removing the need for backward compatibility in areas where VoLTE is available. Verizon 

launched VoLTE in August 2014. Seifert, Dan, “Verizon Announces Initial Rollout of VoLTE, HD Voice for 

the ‘Coming Weeks,’” The Verge, August 26, 2014. Sprint has plans to launch VoLTE in the fall of 2018. See, 

e.g., “Sprint expects to deploy VoLTE starting this fall,” FierceWireless, February 14, 2018 (“Sprint has been 

preseeding the market with VoLTE-capable devices, and it expects to finally start commercially deploying 

VoLTE this fall.”). 

123 For example, AT&T shut down its 2G services at the end of 2016. See, e.g., “AT&T 2G Network Shutdown,” 

AT&T, available at https://www.att.com/esupport/article.html#!/wireless/KM1084805 (“[... W]e discontinued 

service on our 2G wireless network as of December 31, 2016.”). Meanwhile, Verizon announced in 2016 that it 

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 5G standards have been under development over the past several years. The first 5G 

standard, 5G NR (New Radio), was released by 3GPP in December 2017, and 

additional standards are expected to be released in 2018. 124 The 5G network is 

expected to be an improvement over the 4G network along several attributes, such as 

improved latency, lower power requirements, etc.125 U.S. carriers have plans to begin 

rolling out 5G service gradually: AT&T, for instance, stated in January 2018 that it is 

planning to launch a 5G service in 12 U.S. cities by the end of 2018.126 

72. Networks can support multiple generations of wireless standards. Indeed, carriers generally 

roll out a new standard gradually, with infrastructure to support the new standard available in 

some geographic areas before others.127 This prolonged process delays the obsolescence of 

legacy technologies, as device consumers – and therefore OEMs – continue to demand those 

legacy technologies while they are useful in ensuring broad geographical coverage. When the 

major national networks rolled out LTE in the U.S., for example, they implemented it in some 

geographic areas before others, with data coverage in remaining areas continuing, at least for 

a time, to depend on earlier standards.128 Moreover, even where LTE coverage was available, 

 would phase out 2G service by the end of 2019, and in 2014 it reallocated some of its 3G spectrum to 4G LTE. 

See Dano, Mike, “Verizon to Shut Down 2G CDMA 1X Network by the End of 2019,” FierceWireless, July 13, 

2016 (“Verizon [...] confirmed to FierceWireless that it is currently planning to shut down its CDMA 1X 

network by Dec. 31, 2019. [...] Verizon’s 2G CDMA 1X network is used by some of the carrier’s mobile phone 

customers for voice calling, but Verizon is working to transition its voice calling services onto its LTE network 

via Voice over LTE (VoLTE) technology.”). See also Goldman, David, “Verizon is Killing Off 3G,” CNN, 

December 4, 2014 (“In New York, Verizon (VZ) has shut off 20 MHz of airwaves that were once allocated for 

3G. The cell phone giant is now running 4G-LTE over that spectrum.”). 

124 3GPP, “First 5G NR Specs Approved,” December 22, 2017, available at http://www.3gpp.org/newsevents/3gpp-news/1929-nsa_nr_5g. 

125 See, e.g., “5G Network Transformation,” 5G Americas White Paper, December 2017, p. 3 (“5G, being the next 

generation mobile networking standard, brings several new components. Two of the most important features 

are low latency (< 10ms) and high through-put (Multi-Gbps). Using these new enhancements, operators will be 

able to address the market by addressing new use cases. 5G enhances the use cases that LTE is able to 

minimally address today, and brings new revenue streams to operators by leveraging new solutions that LTE 

was not able to serve.”). 

126 “AT&T to Launch Mobile 5G in 2018,” AT&T, January 4, 2018. 

127 See, e.g., Reardon, Marguerite, “Verizon to Launch 4G Wireless Network December 5,” CNET, December 1, 

2010. See also Goldman, David, “AT&T Launching ‘New’ New 4G Network,” CNN Money, May 25, 2011. 

128 Verizon initially introduced LTE in 38 metropolitan areas around the U.S. Patel, Nilay, “Verizon LTE Plans 

Start at $50/Month for 5GB of Data (Update),” Engadget, December 1, 2010. Sprint’s initial LTE rollout 

covered 15 cities in Georgia, Missouri, and Texas. Ingraham, Nathan, “Sprint Details Full List of 15 Cities with 

Live LTE Service,” July 16, 2012. AT&T’s initial LTE launch occurred in five cities. Ziegler, Chris, “AT&T 

4G LTE Launching in First Five Markets on Sunday,” The Verge, September 15, 2011. T-Mobile first 

introduced its LTE network in seven cities. Seifert, Dan, “T-Mobile LTE Network Officially Goes Live in 

Seven U.S. Cities,” March 26, 2013. 

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networks continued to rely on legacy standards for voice calls until the implementation of 

VoLTE.129 In China, too, the rollout of LTE has been somewhat gradual, and different carriers 

have implemented different versions. In 2013, the country’s largest carrier, China Mobile, 

introduced a variant of LTE that relied on time-division duplex (TD-LTE) that followed 

naturally from its 3G standard, TD-SCDMA. Smaller carriers China Telecom and China 

Unicom introduced LTE in 2014. They preferred the frequency-division duplex (FD-LTE) 

variant of LTE, which followed more naturally from their 3G standards (CDMA2000 and 

WCDMA); the smaller carriers have, however, gone down the path of hybrid TD-LTE/FDLTE systems due to the timing of the Chinese government’s allocation of spectrum licenses.130

73. For a mobile device to function within a wireless standard, a modem chip must support the 

communication protocol enshrined in that standard.131 Beyond the basic threshold necessary 

to support a communication protocol, however, modem chips are differentiated by many other 

features and characteristics, such as: 

 

129 See, e.g., “Technology, Media & Telecommunications Predictions 2016,” Deloitte, available at 

https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Technology-MediaTelecommunications/gx-tmt-prediction-2016-full-report.pdf, p. 57 (“VoLTE increases capacity as it allows 

operators to move voice calls off 2G and 3G networks and onto the LTE (4G) network.”). See also “What Is 

VoLTE?,” 4G.co.uk (“[...W]ithout it whenever you make or receive a call your phone has to switch from 4G to 

2G or 3G, since 4G calls aren’t supported and then once the call is finished it switches back again.”). 

130 See, e.g., Bell, Pete, “4G Breaks Through That Great Chinese Wall,” TeleGeography, August 24, 2016 (“In 

December of [2013], China Mobile – currently the largest operator by subscribers – launched commercial 

services over the country’s first 4G network [...]. China Mobile continues to focus on the [...] TD-LTE 4G 

standard. Rivals China Unicom and China Telecom have gone for a mix of TD-LTE and frequency division 

duplex LTE (FDD-LTE). This is due in part to Chinese regulators’ refusal to allocate spectrum licenses for the 

two mobile operators’ preferred FDD-LTE standard until February 2015 – more than a year after the 

distribution of TD-LTE concessions. Unicom’s original intention was to utilize the FDD standard almost 

exclusively, as it provides a smoother migration path from its W-CDMA 3G platform. CDMA2000-based 3G 

operator Telecom planned to use TD-LTE in urban areas and FDD-LTE elsewhere.”). See also Jing, Meng, et 

al., “China Issues 4G FDD-LTE Licenses,” China Daily, February 27, 2015 (“MIIT granted TD-LTE 4G 

licenses to the three mobile telecom carriers in December 2013 and approved experiment of TD-LTE/FDD-LTE 

convergence networks undertaken by China Telecom and China Unicom in June 2014.”); Kinney, Sean, “RIP 

TD-SCDMA,” RCR Wireless News, December 17, 2014 (“TD-SCDMA was developed by the Chinese and 

deployed for a limited trial in 2008. In 2009, the Chinese Ministry of Industry and Information Technology 

gave China Mobile a license to operate the TD-SCDMA network. China Mobile’s two major competitors, 

China Telecom and China Unicom, were assigned licenses to respectively operate CDMA2000 and W-CDMA 

networks, both international standards.”). 

131 See, e.g., Miller, Michael J., “New Modems, Equipment Set the Stage for Next Year’s 5G Rollouts,” PCMag, 

March 2, 2018 (“While the rollout of 5G networks sounds good, they won’t be very useful without devices that 

run on them. And those devices won’t work without 5G modems.”). 

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a. “Multi-mode” capability, the support of multiple standards – possibly spanning 

multiple generations, e.g., 2G/3G/4G;132

b. Performance along dimensions such as user experience and power consumption;133

and 

c. Integration of other components or functionality of the device, e.g., the application 

processor, Bluetooth and Wi-Fi support, and the GPS unit.134

These features and characteristics, and their importance to OEMs as they select the modem 

chips to incorporate in their devices, are discussed in greater depth in Section III.E.1.c.i. 

b. The modem chip industry and the modem chip product cycle 

74. The modem chip industry is shaped by both changes between standards generations and 

incremental developments within generations. Each new generation of standards – such as 2G, 

3G, and 4G, each representing a discrete generation – marks major strides in dimensions such 

as transmission speed and network capacity, and whether a modem chip supports a certain 

standard determines its ability to communicate with networks using that standard. Innovation 

also continues within generations, and even within families of standards: for example, over 

time, 3GPP has issued “releases” introducing categories of WCDMA and LTE with higher 

transmission speeds.135 

75. The modem chip industry is also shaped by product cycles in the mobile device market. OEMs 

release new and improved products at different time intervals and require modem chip 

 

132 See, e.g., “Qualcomm Introduces World’s First Complete Multi-mode 3G/LTE Integrated Solution for 

Smartphones,” Qualcomm Press Release, February 16, 2009 (“Multi-mode 3G/LTE chipsets will be crucial to 

smooth deployments of LTE by operators who are looking to complement their existing 3G networks, and the 

MSM8960 delivers maximum flexibility by supporting [CDMA2000] EV-DO Rev. B and HSPA+ in addition to 

LTE [...]”). 

133 See, e.g., “Qualcomm Snapdragon 710 Mobile Platform Brings In-Demand Premium Features to a New Tier of 

Smartphones, ” Qualcomm Press Release, May 23, 2018 (“The platform’s new architectures are engineered to 

deliver superior power efficiency, long-lasting battery life and an overall enhanced user experience.”). 

134 See, e.g., “Qualcomm Announces the First Commercially Sampling Tri-mode System-on-Chip,” Qualcomm 

Press Release, February 21, 2017 (“Key features include: [... :] Bluetooth 5 - Low Energy and CSRMeshTM

connectivity [... :] Low Power Wi-Fi - 802.11n in 2.4 GHz/5 GHz bands [... :] Dual-Core Processing: [... :] 

Dedicated ARM® Cortex® M4 CPU for customer applications”). 

135 For a schedule of 3GPP releases, see Poole, Ian, “3GPP Standards & Release Numbers,” RadioElectronics.com, available at http://www.radio-electronics.com/info/cellulartelecomms/3gpp/standardsreleases.php. For a mapping of 3GPP releases to categories, see, e.g., “LTE UE (User Equipment) category & 

Class Definitions,” available at http://www.cablefree.net/wirelesstechnology/4glte/lte-ue-category-classdefinitions. 

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suppliers to meet tight product development deadlines.136 The high rewards associated with 

developing a cutting-edge mobile device imply that OEMs frequently update their products 

with the most advanced features enabled by mobile device technology. Consequently, the fast 

pace of innovation that has characterized the mobile device industry translates into demand for 

innovation in the modem chip industry. For example, the demand for mobile devices with 

increasingly power-consuming features has translated into the demand for increasingly powerefficient modem chips.137 Mobile device product cycles, therefore, exert a key influence on 

the modem chip industry. 

76. In addition to navigating these broad product cycles, individual modem chip suppliers have 

their own product cycles, which mark the development and implementation of new chip 

models and technologies. These modem chip product cycles vary across firms. Qualcomm 

introduces new designs in its top-tier modem chips, then cascades or “waterfalls” them down 

into lower-tiered modem chips over a period of several quarters.

138,139 One implication of this 

 

136 For example, between 2008 and 2015, Apple released the iPhone 3G, 3GS, 4, 4S, 5, 5S, 5C, 6, 6 Plus, 6S, and 

6S Plus at a rate of one or two per year. See AAPL-FTC-00128293 at 8293. 

137 Geuss, Megan, “Why Your Smartphone Battery Sucks,” PC World, May 18, 2011 (“Smartphone screens are 

getting larger and supporting higher resolutions, both of which suck power like crazy. [...] Another major 

power drain relates to increasingly complex apps, which impose ever-steeper processing requirements. [...] One 

consequence of runaway power consumption is that the makers of mobile processors are feeling a lot of 

pressure to produce more-efficient chips for phones.”). 

138 See, e.g., Exhibit CX6394, Achour Deposition, Qualcomm, Q2014FTC04334482, p. 6 (“Overview of Modem 

Competitiveness & Key Strategies,” January 2016). 

139 More generally, “waterfalling” refers to the cascade of new technologies from leading-edge products into midand lower-end products over time. See, e.g., Deposition of Keith Kressin, Senior Vice President of Product 

Management at Qualcomm, February 7–8, 2018, p. 410 (“Kressin Deposition, Qualcomm”) (“Q. And I’ll get 

back to this later, but one thing you just mentioned I wanted to highlight. You said that something -- something 

-- and I think you meant technology -- that could be in a premium-tier chipset one year might be in a lower-tier 

chipset at some point in the future; is that [...] correct? A. That’s accurate. Something we might start in the 

premium tier, some technology we might put in the premium tier could find its way into lower-tier chips at a 

subsequent time. Sometimes months, sometimes years, sometimes maybe never.”) and p. 411 (“[A.] But at a 

very general level, typically in not just Qualcomm, but any technology, you typically try and -- try and 

introduce new technologies that are user-valued in your -- in your higher-end products first. Then you have to 

work to cost-reduce to bring it down later, and while you’re cost-reducing one, you’re introducing a new 

technology on top. It’s a common industry, you know, technical waterfalling strategy.”). See also 

Investigational Hearing of Vankata Murthy Renduchintala, Former Co-President of QCT Division, Qualcomm, 

October 7, 2016, pp. 129–130 (“Renduchintala IH, Qualcomm”) 

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phenomenon is that if a supplier’s most innovative modem chip is not chosen for an OEM’s 

flagship device, the supplier may still be able to profit from that chip by selling it later to lowertier devices. 140 

.

142 

This strategy is particularly effective for SoC suppliers. 

.

143 , 

 

 

140 See, e.g., Deposition of James Thompson, Chief Technology Officer at Qualcomm, February 14–15, 2018, 

pp. 109–111 (“Thompson Deposition, Qualcomm”) 

and Exhibit CX6324, Thompson Deposition, Qualcomm, p. 6. 

141 The term “IP core” derives from “Intellectual Property core” and refers to a module that can be used as a 

“building block” in constructing a chip. Qualcomm also uses the term “modem IP” to refer to a modem IP core. 

Note that the “IP” in these terms does not mean intellectual property, per se. See, e.g., Deposition of Baaziz 

Achour, SVP of Modem Engineering at Qualcomm, February 21, 2018, p. 111 (“Achour Deposition, 

Qualcomm”) (“Q. What is modem IP? A. [...] It’s the [...] modem subsystem that goes into the product. 

That’s what we refer to as modem IP. It’s not the intellectual property that’s in patents. That’s [...] different. 

This is really the actual technology we deliver in silicon to be included in our product.”) and p. 113 (“Q. And 

can the same modem IP be used in different products? A. That is correct. A good example is the MDM and the 

MSM. I mentioned that the same modem goes -- when I say the cat 4, for example, it goes in the MDM and it 

goes in the MSM, that’s the same modem IP. It’s the same piece of silicon design that we give to both the 

MDM team and the MDM team [sic] to put in their products. Sometimes the same modem go[es] into, like, six, 

seven different products.”). 

142 Achour Deposition, Qualcomm, pp. 114–115 

 This discussion 

references Exhibit CX6394, Achour Deposition, Qualcomm, Q2014FTC04334482, p. 6 (Qualcomm, “Overview 

of Modem Competitiveness & Key Strategies,” January 2016). 

143 Exhibit CX6394, Achour Deposition, Qualcomm, Q2014FTC04334482, p. 6 (Qualcomm, “Overview of 

Modem Competitiveness & Key Strategies,” January 2016). 

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.

144,145

77. The interaction of standards evolution, technological improvements, and the strategies of chip 

suppliers and OEMs implies that some chips are sold for a few quarters, while others can be in 

the market for several years. 

 Several other SoCs used in smartphones and 

feature phones, as well as thin modems, were expected to remain in production for at least two 

years.148

D. Modem chip suppliers and purchasers 

1. Modem chip suppliers 

78. Modem chip suppliers are firms that sell modem chips to mobile device OEMs.149 The number 

and identity of the modem chip suppliers who are active in the industry have varied 

considerably over time. In addition to Qualcomm, other modem chip suppliers have included, 

among many others, Infineon, Intel, MediaTek, Samsung/Samsung S-LSI (short for System 

Large-Scale Integration), Huawei/HiSilicon, ST-Ericsson, Texas Instruments, Broadcom, 

 

144 See, e.g., Exhibit AX0003, 

145 Based on a presentation by Intel’s consultant Bain, Intel was aware of both Qualcomm’s better R&D efficiency 

and its better IP reuse. BAIN00051010, p. 3 (“QCOM Benchmark: 2012,” December 20, 2012, “Intel overall 

SOC R&D investment comparable to QCOM, but QCOM has 3x times more output”) and p. 7 (“Qualcomm has 

higher IP reuse vs. Intel base products”). 

146 Q2014FTC00010235, pp. 95, 97, presentation titled “QCT Chipset Product Roadmaps” March 2015. 

147 Q2014FTC00010235, pp. 95–96, presentation titled “QCT Chipset Product Roadmaps” March 2015. 

148 Q2014FTC00010235, pp. 96–99, presentation titled “QCT Chipset Product Roadmaps,” March 2015. 

149 Some modem chips suppliers, such as HiSilicon and Samsung S-LSI, sell modem chips solely, or 

predominantly, to their vertically integrated OEM. 

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Freescale, Spreadtrum, VIA Telecom, Marvell, and Nvidia. I discuss the experiences of each 

of these firms within the modem chip industry in more detail in Section V.C. Exhibit III.D.1 

provides a timeline of entry and exit of these suppliers. 

79. Modem chip suppliers have chosen to organize in a variety of ways, and their degree of vertical 

integration varies widely. Some modem chip suppliers focus solely on modem chip design, 

while others both design and manufacture modem chips. As I discuss further in the next section, 

some mobile device OEMs, such as Samsung and Huawei, have also vertically integrated with 

captive modem chip suppliers, providing an additional level of vertical integration. The 

various degrees and directions in which modem chip suppliers are vertically integrated, and 

the corresponding flows of modem chip designs and modem chips to OEMs, are illustrated in 

Exhibit I.C.1. 

80. The most common business model among modem chip suppliers, the “fabless” chip vendor, is 

the least vertically integrated.150 Fabless firms focus on modem chip design, and contract with 

external chip foundries to manufacture chips according to their design specifications. 

Qualcomm is a fabless firm: it designs modem chips and then outsources their physical 

manufacture to other firms, such as Samsung or TSMC.151 Similarly, MediaTek designs, 

develops, and markets modem chips but contracts with foundries such as TSMC and 

GlobalFoundries for manufacturing.152,153

81. Other firms, known as IDMs, choose to manufacture as well as design modem chips.154 This 

level of vertical integration allows the modem chip supplier to save the so-called “foundry 

 

150 See case studies in Section V.C. 

151 Siddiqui, Aamir, “Qualcomm Ends Foundry Partnership with Samsung and Entrusts 7nm Process to TSMC,” 

xdadevelopers, June 12, 2017. 

152 Real, Mark, “MediaTek Moves SoC Manufacturing From TSMC To Save Costs,” Android Headlines, June 27, 

2017. 

153 MediaTek’s provision of reference designs for mobile devices may be seen as a soft form of vertical integration 

into device design. Qualcomm, too, provides reference designs. See discussion of reference designs in Section 

III.E.1.c.ii. 

154 See, e.g., “2016 Top Markets Report Semiconductors and Semiconductor Manufacturing Equipment: Sector 

Snapshot,” U.S. Department of Commerce, International Trade Administration, available at 

https://www.trade.gov/topmarkets/pdf/Semiconductors_Semiconductors.pdf (“Integrated Device Manufacturers 

(IDMs) design, manufacture and sell their own semiconductors. Examples are Intel or Samsung.”). 

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margin,” which is the profit margin that an independent foundry would otherwise make.155 A 

modem chip supplier may also serve as a foundry, i.e., manufacture chips of others’ design. 

Intel, for example, has its own fabs, which it uses to manufacture modem chips it designs, and 

it has recently started manufacturing modem chips for other modem chip suppliers such as 

Spreadtrum in its fabs as well.156 Previously, Intel and Infineon, which was acquired by Intel, 

were fabless modem chip suppliers, as discussed further in Section V.C.1. 

82. In addition to varying in their degree of vertical integration, modem chip suppliers also differ 

in their strategies regarding technological leadership within the industry. As I discuss in more 

detail in Section III.E.2.b below, some suppliers, such as Qualcomm, pursue a strategy of 

substantial investment in R&D in order to supply the most innovative, high-end, customized 

products and to be at the leading edge of the industry. 157 Other suppliers, including 

 

155 See, e.g., Deposition of Aichatou Evans, Vice President of Communications and Devices, Intel, March 14–15, 

2018, p. 234 (“Evans Deposition, Intel”) (“Q. What is ‘foundry margin’? A. It is when one has a – a product 

manufactured a[t] a foundry. We assume that there’s their cost and then the margin that they decide upon for 

their business. And, therefore, the total price including both their cost and a – and a foundry margin.”). See 

also “Could Intel’s Business Transition Impact Its Gross Margin?,” Market Realist, July 14, 2017 (“Intel is an 

IDM (integrated design manufacturer), which handles the end-to-end process from chip design to manufacturing 

to packaging to selling. [...] The IDM model enables Intel to enjoy the profits of both a fabless company and a 

foundry.”). 

156 See, e.g., Yoshida, Junko, “Intel, Spreadtrum Demo Brainchild: Is Intel getting ready for Apple?,” EE Times, 

Mar. 1, 2017. See also Pressman, Aaron, “Why Apple Could Be a Future Customer for Intel’s Chipmaking,” 

Fortune, August 27, 2016. 

157 See, e.g., Exhibits III.E.1 and III.E.3. See also Deposition of George S. Davis, Chief Financial Officer at 

Qualcomm, March 18, 2018, pp. 262–263 (“Davis Deposition, Qualcomm”) (“[Slide with Bates No. 6887–045 

shows a] model -- this is intended to show the -- how both the combination of R&D investment by QTL and 

incorporate [...] results in very strong early IP R&D leadership at a front end of a generation [...] you end up 

with both IP leadership and product leadership advantages from being [...] an early leader in a generation 

change.”); Thompson Deposition, Qualcomm, p. 80 (“Q. And there are also fewer suppliers able to supply 

modems with the features that are required in the high-end? A. [...] I think there may be a few less, but it’s not 

that different. Most of the players in this industry could deliver a high-tier if they go after that market. It’s a 

matter of choice -- where you focus from a market point of view.”). 

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MediaTek158 and (prior to its acquisition by Intel) Infineon,159 have historically chosen a 

strategy of being “fast followers.” Such suppliers historically have spent less on R&D in order 

to supply lower-cost products, or focused on less customized products used in low-end mobile 

devices, primarily in emerging markets.160 As discussed in Section V, both strategies can lead 

to profitability and success in the industry, and some suppliers have adopted different strategies 

at different points in time. 

83. Exhibit III.D.2 shows that from 2002 to 2017, according to analysis of Strategy Analytics data, 

there have been between 8 and 22 modem chip suppliers operating in the industry in any given 

year (Strategy Analytics does not separately identify all modem chip suppliers in each year). 

Exhibit III.D.3 shows that the composition and rankings of leading firms within the industry 

have changed over time. While in any given year only a few chip suppliers sell a large majority 

of the modem chips (between 2002 and 2017, the top five firms supplied between 81 percent 

and 94 percent of chips sold each year), there have been 12 different top-five suppliers between 

2002 and 2017.161 The exhibit also shows that, although Qualcomm has consistently ranked 

as the largest or second largest modem chip supplier, other firms, such as Texas Instruments, 

 

158 See, e.g., Deposition of Aaron Schafer, Senior Director of Procurement at Apple, February 28, 2018, pp. 106–

107 (“Schafer Deposition, Apple”) (“Q. Do you recall why MediaTek has not yet been chosen as a modem 

supplier for Apple? [... A.] MediaTek has -- you know, we -- probably the industry itself has probably 

segmented into two -- two classes of suppliers. MediaTek is probably what I would consider a fast follower, so 

generally behind, you know, the top-tier, leading-edge, call it high-tier modems. Q. And your view is they’ve 

always been a fast follower? A. Fast -- you know, that’s probably -- you know, I don’t know what you want to -

- how you want to qualify that, but they’re a follower. Q. And what does that mean, technologically, to be a 

follower or a fast follower? A. They’re -- you got to look at the market as in -- really, I think for smartphones, 

is in this high-tier, leading-edge, latest 3GPP feature set. And that’s -- that’s one segment. And then there’s 

another segment that’s more the lower-end phones that are sold around the world, maybe even lower -- well, 

lower-end geographies. I think MediaTek generally plays in that industry.”). 

159 See, e.g., Lindner Deposition, Intel, pp. 16–17 (“Q. Have you heard the term ‘fast follower’? A. Yes. Q. And 

when you were at Infineon, did the Infineon Wireless division, in your understanding, pursue a fast-follower 

strategy? A. Yes.”). See also Loh, Kin Wah and Hermann Eul, “Infineon Communication on the Move,” 

Infineon, June 1, 2005 (describing Infineon’s mobile phone business segment as in a “fast follower” position 

and “catching up in 3G”). 

160 Olson, Parmy, “IPhone a Risk with Intel’s Latest Buy,” Forbes, August 10, 2010 (“Infineon’s WLS has fallen 

behind in research and development in [long-term evolution...]. It was the same with 3G because Infineon 

decided that by being a ‘fast follower’ of the new technology, it might not make some of the mistakes that the 

leading players would.”). See also Exhibit QX0204, Loh Deposition, MediaTek, pp. 16, 22 (“Strategy 

Highlight[;] Serve the un-served[:] Focus on un-served users/manufacturers (2nd tier/emerging”). 

161 Those 12 top-five sellers between 2002 and 2017 are Agere, Freescale, Infineon, Intel, MediaTek, Qualcomm, 

RDA, Samsung S-LSI, Spreadtrum, ST-Ericsson, STMicroelectronics, and Texas Instruments. 

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Freescale, or ST-Ericsson, gradually declined in the rankings and eventually exited the industry. 

Conversely, suppliers such as MediaTek and Spreadtrum have climbed up in the rankings over 

time, becoming the second and third largest modem chip supplier based on the number of units 

sold, respectively. These trends are confirmed in Exhibit III.D.4, which displays dramatic 

changes in the relative quantities of modem chips sold by each supplier over time. For example, 

Texas Instruments (TI) was the leading supplier from 2002 to 2009, and was among the top 

five suppliers in 2010 and 2011, yet exited the modem chip industry in 2013. Conversely, 

several of the largest suppliers in 2017, such as HiSilicon, MediaTek, Samsung S-LSI, and 

Spreadtrum, were relatively small suppliers or were not supplying modem chips a decade 

earlier, and Samsung S-LSI’s and HiSilicon’s shares were negligible even in 2012. 

84. As discussed in Section III.C.1, the modem chip is one of many components in a mobile device. 

The same firms that supply modem chips may also supply other components of mobile devices. 

Modem chip suppliers that offer SoCs, for instance, offer several device components integrated 

together on a single chip. Some modem chip suppliers also sell other device components that 

are not integrated with the modem chip. Samsung, for instance, sells OLED smartphone 

screens and supplied those screens for Apple’s iPhone X.162 Exhibit III.D.5 indicates which 

modem chip suppliers were active in the supply of some other mobile device components. The 

supply relationships that firms create with OEMs for the supply of other mobile device 

components may be beneficial in establishing and maintaining relationships for the supply of 

modem chips. 

2. Modem chip purchasers 

85. Mobile device OEMs purchase modem chips and assemble them with the other components of 

a mobile device. The device is then sold to retailers, wireless operators, or consumers. Some 

of the major OEMs over time have included Samsung, Nokia, Apple, LG, Huawei, Sony, and 

Motorola.163 Exhibit III.D.6 shows that from 2008 to 2017, the number of mobile device 

 

162 “iPhone X Costs Apple $370 in Materials, IHS Markit Teardown Reveals,” IHS Markit, November 8, 2017 

(“The [‘Super Retina’ display] panel is supplied by Samsung Display, and [...] the panel maker will supply 

around 67 million flexible AMOLED units to Apple in 2017 built to the company’s unique specifications.”). 

163 “OEM,” in the context of mobile devices, does not refer only to manufacturing companies. Apple, for example, 

relies on contract manufacturers such as Foxconn to assemble its products, but is often referred to as a mobile 

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OEMs reported in the IDC data has ranged from 93 to 359, but the actual number of OEMs is 

likely to be considerably greater.164 Exhibit III.D.7 ranks OEMs based on the total number of 

mobile devices shipped and shows the number of devices shipped in each year between 2004 

and 2017. These data are plotted in Exhibit III.D.8, which shows the continued growth in the 

number of mobile devices shipped from 2004 to 2014, followed by a plateau between 2015 

and 2017 as many countries have reached high mobile device ownership rates.165

86. As noted above, OEMs differ in the way they organize their mobile device production and in 

their degree of vertical integration. Some OEMs have chosen to integrate upstream, designing 

and possibly manufacturing their own modem chips. As I discuss in more detail in Section 

IV.C, this reduces the OEM business that remains available to independent modem chip 

suppliers, such as Qualcomm and Intel, as OEMs source modem chips from their integrated 

suppliers.166 

167

 device OEM. See, e.g., “Apple Was the Biggest Smartphone OEM in Q4 2017,” iPhone Hacks, February 2, 

2018. 

164 See, e.g., “Top 11 Chinese OEM Smartphone Makers at Global Sources Hong Kong Trade Show,” CNOEM 

Phone, April 25, 2016 (“Above are the top eleventh Chinese OEM smartphone makers on the Global Sources 

Hong Kong fair, and there are many more Chinese OEM smartphone makers do not show on the trade show for 

cost reason. It is said that there are more than 300 phone makers in Shenzhen, China.”). 

165 See, e.g., Whitney, Lance, “Smartphone Market’s Glory Days Are Over,” CNET, February 23, 2016 

(“Smartphone ownership has reached peak levels in key markets worldwide[. ...] In North America, 65 percent 

of consumers own a smartphone. In Europe, that number jumps to 74 percent. In China, the figure rests at 72 

percent. This translates to markets with fewer and fewer first-time buyers.”) 

166 For example, if there is a minimum efficient scale for non-integrated modem chip suppliers, then reduced 

demand for their chips from vertically integrated OEMs may force the non-integrated suppliers to decrease their 

output or exit the industry. See, e.g., Chandler, Alfred, Scale and Scope: The Dynamics of Industrial 

Capitalism, p. 27 (“[T]he number of plants in an industry that could operate at minimum efficient scale at a 

given point in time was limited by the size of the market for that industry’s product.”). 

167 See Exhibit 3,

 See also “Samsung Galaxy S4 Teardown,” Tech Insights (“This 

Galaxy S4 uses Intel’s PMB9820 baseband processor.”); 

 

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87. Samsung, an OEM of smartphones, tablets, and other products, is fully vertically integrated 

from the manufacture and design of modem chips to mobile device sales. In addition to 

designing and manufacturing mobile devices, Samsung owns a modem supplier, Samsung SLSI, which designs and manufactures modem chips and supplies them for Samsung’s own 

branded devices or sells them to Samsung’s rival OEMs. 168 , 169 Samsung’s full vertical 

integration facilitates the interaction of different parts of the company and lowers the 

transaction costs and uncertainty that characterize OEM–supplier contracts. 

88. Huawei is slightly less vertically integrated than Samsung. Huawei designs and manufactures 

mobile devices and sells them to end consumers. It owns a modem chip supplier, HiSilicon, 

but unlike Samsung it does not own a foundry. In other words, HiSilicon is a fabless modem 

chip supplier that designs some (but not all) of the modem chips incorporated into Huawei’s 

mobile devices.170,171

89. Apple, differently from Huawei and Samsung, is not integrated with a modem chip designer 

and has preferred to buy thin modems from suppliers such as Qualcomm, Infineon, and Intel. 

Still, Apple designs the APs used in its mobile devices, and outsources their manufacturing to 

TSMC and Samsung.172 As such, Apple is also vertically integrated, though not within the 

 

 

168 See “About Us,” Samsung, available at http://www.samsung.com/semiconductor/about-us/business-overview. 

Note that in 2017, Samsung made its foundry business “an independent business unit.” 

169 See Shaik, Asif, “How Being a Component Manufacturer Helped Samsung in Becoming The Biggest Mobile 

Phone Brand,” InfiniGeek, November 14, 2013.

170 See, e.g., “Company Overview of HiSilicon Technologies Co., Ltd.,” Bloomberg, available at 

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=29568267. See also “Company 

Overview,” HiSilicon, 2017, available at http://www.hisilicon.com/en/AboutUs/Overview. 

171 See Section V.C.5 for additional details. 

172 See, e.g., Owen, Malcolm, “Apple’s ‘A12’ Chip Reportedly in Production Using 7nm Process from TSMC,” 

AppleInsider, April 23, 2018 (“Chip producer TSMC may enjoy its highest profits this year for production of 

the next-generation ‘A12’ processor, with a report claiming the manufacturer is ramping up volume production 

on its 7nm process lines in order to cope with the orders for the Apple-designed chip destined for 2018 iPhone 

models. [...] TSMC is reportedly the sole producer of A12 chips, after apparently securing all of orders for the 

component from Apple earlier this year.”). See also “From A4 to the A11 Bionic: The Evolution of Apple ‘A’ 

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modem chip industry. 

 

.

174 

90. Xiaomi, one of the largest mobile device OEMs worldwide, also recently released its own 

modem chip, the Surge S1 SoC,175 and appears to be developing another, the Surge S2 SoC.176 

This suggests that the trend toward vertical integration of OEMs into the supply of modem 

chips may continue. 

91. Several considerations enter into the decision to integrate vertically with different component 

industries and different business models have proved successful. Potential benefits of vertical 

integration include cost savings (including, for example, the elimination of a markup), more 

reliable supply schedules, and greater ability to customize the input good to the specific needs 

of the downstream OEM product.177 Another factor that may affect the decision to vertically 

 Mobile Chips,” PC Mag, September 13, 2017 (“Apple moved to its well known Ax series family of Systems on 

Chip (SoC) only after the iPhone 3GS which is now used iPad, iPod touch, and even the Apple TV. The chips 

are designed by Apple while it is usually manufactured by Samsung and TSMC.”). 

173 

174 

 Ting-Fang, Cheng, “Apple: a Semiconductor Superpower in the 

Making,” Nikkei Asian Review, September 29, 2017 (“Industry sources and analysts [...] say the company is 

interested in building [...] modem chips for iPhones [...]. [...] Bernstein’s Li said that Apple has invested in 

research and development for baseband modem chips responsible for mobile communication. Currently, it 

purchase[s] these from Qualcomm and Intel. ‘It would not be surprising that Apple develops its own [modem 

chip],’ he said.”). 

175 Gordon, Scott Adam, “Xiaomi Reveals 64-bit Surge S1 Chipset, its First-ever SoC,” Android Authority, 

February 28, 2017. 

176 See, e.g., Ingelido, Michele, “Xiaomi Seems To Be Preparing Surge S2 SoC As Orders At TSMC Increase,” 

GizmoChina, April 29, 2018, available at https://www.gizmochina.com/2018/04/29/xiaomi-seems-to-bepreparing-surge-s2-soc-as-orders-at-tsmc-increase/. 

177 

See also Buzzell, 

Robert, “Is Vertical Integration Profitable?,” Harvard Business Review, January, 1983 (“Vertical integration 

may permit cost reduction [...]. Vertical integration may be essential to assure a supply of crucial materials. 

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integrate is the scale of production. For example, according to MediaTek’s COO, Jeffrey Ju, 

a smartphone OEM must sell about 100 million units to justify its own modem chip arm.178

92. OEMs purchase modem chips for an array of different products. Apple, for example, uses 

modem chips both in the iPhone and in certain iPad tablets with cellular connectivity.179 HMD 

Global purchases 2G modem chips for “retro” feature phones marketed under the Nokia brand, 

such as the Nokia 3310.180 Other OEMs also produce phablets, i.e., mobile devices with a size 

between that of a smartphone and a tablet.181

E. Modem chip supplier–OEM purchaser relationships 

93. The matching of modem chip suppliers to OEM purchasers takes place in the context of 

multiple dynamics: generational shifts and incremental innovations in wireless standards, 

ongoing innovations in modem chip technology, mobile device product cycles, carrier 

requirements, and firm-level modem chip product cycles. 

94. In this section, I consider this matching of modem chip suppliers to device OEMs from two 

perspectives: first from the demand side, then from the supply side. On the demand side, I 

consider how innovation interacts with OEMs’ requirements for modem chips, examine the 

factors that may influence the overall number of modem chip suppliers from which an OEM 

 [...] Some claim that [...] businesses and companies that are vertically integrated, especially backward, are best 

equipped to innovate.”). 

178 “MediaTek sees only limited use of its new advanced chip in 2017,” Nikkei Asian Review, February 28, 2017. 

179 See, e.g., Apple Inc.’s Responses and Objections to Qualcomm Incorporated’s Second Set of Interrogatories, 

November 20, 2017, pp. 14–15 (Apple’s response provides a table that “identifies the baseband processors 

utilized in the [...] referenced products,” which include models of iPhone, iPad, and Apple Watch.). 

180 Kelion, Leo, “Nokia 3110 Mobile Phone Resurrected at MWC 2017,” BBC News, February 26, 2017 (“Nokia’s 

3310 phone has been relaunched nearly 17 years after its debut. Many consider the original handset iconic 

because of its popularity and sturdiness. More than 126 million were produced before it was phased out in 

2005. The revamped version will be sold under licence by the Finnish start-up HMD Global, which also 

unveiled several Nokia-branded Android smartphones.”). 

181 See, e.g., “What is a phablet and why do you need one?,” Verizon, July 28, 2017, available at 

https://www.verizonwireless.com/articles/what-is-a-phablet-verizon-samsung/ (“Phablets are essentially 

smartphone-tablet hybrids. They’re feature-rich devices with screen sizes between 5 and 6 inches [...].”). 

Huawei’s MediaPad X1, for example, is a seven-inch device with mobile connectivity, including support for 

voice calls. See, e.g., Lai, Richard, “Huawei MediaPad X1 Is the Lightest and Narrowest 7-inch Tablet, Plus 

It’s a Phone,” Engadget, February 23, 2014 (“Does the world need bigger smartphones? Huawei answers this 

question at MWC with the launch of its MediaPad X1, a 7-inch Android tablet that lets you make phone calls.”). 

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sources, and finally discuss the individual modem chip and supplier characteristics that OEMs 

may weigh when choosing a supplier. On the supply side, I consider the challenges that a 

modem chip supplier faces in satisfying the various requirements of OEMs while competing 

effectively at the leading or trailing edge of the industry. 

1. Factors affecting demand for modem chips 

a. Innovation 

95. Innovation plays an important role in determining the demand for modem chips. Over time, 

there has been tremendous innovation in mobile devices, as well as in cellular networks and 

the systems and processes by which devices and networks communicate.182 Each year, new 

devices have been released with new and improved functionality.183 The demand for improved 

functionality is evidenced by the spikes in sales following the release of new models.184 Much 

of this functionality requires new and improved modem chips. Demand has consistently been 

high for phones and other devices that are improvements over existing models along multiple 

dimensions, including voice quality, data speeds, application functionality, form factor or 

physical style,185 and network coverage.186

96. Some OEMs have strategically decided to cater to this consumer demand for multi-functional, 

cutting-edge devices;187 in turn, these OEMs demand highly customized modem chips that 

facilitate advanced device functionality. The precise nature of modem chip innovations that 

 

182 See the overview of wireless standards in Section III.C.2. 

183 For example, Apple has released at least one new iPhone every year since 2007, improving the phone in ways 

such as battery consumption, storage, and camera performance over time. See, e.g., Velazco, Chris, “The 

iPhone 10 Years In: Everything That’s Changed from 2007 to 2017,” Engadget, September 11, 2017. 

184 See, e.g., Carton, Benjamin et al., “A New Smartphone for Every Fifth Person on Earth: Quantifying the New 

Tech Cycle,” International Monetary Fund, WP/18/222018, p. 4 (“Demand [...] is highly cyclical as it centers 

around the release of new smartphone models by global producers [...].”). 

185 See, e.g., “Form Factor,” Phone Scoop, available at https://www.phonescoop.com/glossary/term.php?gid=4 

(“Mobile phones come in several different physical styles (form factors) [...] common categories used [...] to 

describe form factors: Bar, [...], Clamshell, [...], Flip, [...] Slide, [...] Swivel.”). 

186 See, e.g., Shein, Esther, “Smartphone Consumer Demand Growing,” InformationWeek, July 1, 2010 (“The 

demand for smartphones is being fueled by a consumer desire for ultimate converged devices that support 

functionalities such as touchscreen, camera/video support, dual SIM card, Wi-Fi, and integrated GPS.”). 

187 See case studies in Section V.C. 

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are demanded varies over time. As carriers adopt a new standard or new category within a 

standard, for example, OEMs may anticipate that modem chip support for that new standard 

or category – as well as backward compatibility to older standards188 – is key to capturing 

consumer demand for devices capable of operating on the new standard or category.189 At 

other times, other modem chip features may become more important to demand, and the 

relevant features may vary. 

.

192 

 

188 

 

189 

 

 

190 

191 

 

192 

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97. Given that some OEMs’ demand is particularly high for certain new and innovative modem 

chip features,195 being the first modem chip supplier to develop and commercialize chips 

incorporating important innovations (including innovations relating to the integration of other 

functions into the chipset) is often a key driver of success. 

 

 

193 Carrier aggregation “allows mobile network operators to combine a number of separate LTE carriers. This 

enables them to increase the peak user data rates and overall capacity of their networks and to exploit 

fragmented spectrum allocations.” Brydon, Alastair, “Evolution of LTE-Advanced Carrier Aggregation,” 

Unwired Insight, March 25, 2014. See also “The 150 Factor: Superfast LTE is Here,” Qualcomm OnQ Blog, 

June 26, 2013 (“Carrier Aggregation is a foundational feature of LTE Advanced. While today’s 4G LTE 

services are delivered over a single narrow channel—sometimes called a carrier—LTE Carrier Aggregation 

brings together two or more carriers to simultaneously transfer data, resulting in data delivered twice as fast. 

Using a transportation example, regular LTE is like a two-lane road whereas LTE Advanced is four-lane 

highway, meaning more data and faster speeds.”). 

194 

195 This demand is evidenced, in part, by the high prices commanded by certain novel modem chip features. See, 

e.g., Achour Deposition, Qualcomm, p. 78 (“Typically when something is introduced in a market first it has a 

lot of value, and then when it becomes kind of baseline, everybody has it, then the value diminishes and we 

cannot differentiate on it -- we can differentiate on performance, maybe, but it’s not a novelty anymore, so 

everybody has it, then it becomes less valuable from a differentiation perspective.”). 

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98. The rewards associated with being the first to market with a product that is in high demand – 

and therefore, at least for a time, the only potential supplier of a product in high demand – may 

be considered a type of “first-mover advantage.” Note that while the term “first-mover 

advantage” carries a variety of meanings in the academic literature and generally refers to 

advantages that, for a variety of reasons, may (or may not) accrue to a firm as the result of 

being the first entrant into a particular market segment,197 I do not use the term in this manner. 

Instead, I use it to refer specifically to rewards accruing to a firm that is uniquely positioned to 

satisfy demand because it is the first to market with a new product and for a time is the only

firm capable of producing that product.198 For example, Qualcomm was the first mover into 

CDMA technology; it was also a pioneer in CDMA modem chips, introducing a CDMAcompatible handset (incorporating a CDMA modem) as early as 1993 and providing handsets 

 

196 APL-QC-FTC_12123224–3226 at 3224, email from Steve Schell, Apple, January 31, 2013. 

197 See, e.g., Suarez, Fernando et al., “The Half-Truth of First-Mover Advantage,” Harvard Business Review, April 

2015, p. 122 (“A first-mover advantage can be simply defined as a firm’s ability to be better off than its 

competitors as a result of being first to market in a new product category”). See also Lieberman, Marvin B. et 

al., “First-Mover Advantages,” Strategic Management Journal, Vol. 9, 1988, p. 41 (“In the first stage some 

asymmetry is generated, enabling one particular firm to gain a head start over rivals. This first- mover 

opportunity may occur because the firm possesses some unique resources or foresight, or simply because of 

luck. Once this asymmetry is generated a variety of mechanisms may enable the firm to exploit its position; 

these mechanisms enhance the magnitude or durability (or both) of first-mover profits.”). 

198 In particular, my use of the term “first-mover advantage” diverges from others’ use of the term to describe the 

idea that entering a market segment first may endow a firm with advantages that persist even as other, equally 

capable competitors enter the market. See, e.g., Kerin, Roger A. et al., “First-Mover Advantage: A Synthesis, 

Conceptual Framework, and Research Propositions,” Journal of Marketing, Vol. 56, No. 4, 1992 pp. 34–35 

(discussing how enduring first-mover advantages may arise because, among other reasons, (1) later entrants 

may face higher barriers to entry, and (2) first movers may have the opportunity to shape consumer 

preferences). In fact, the academic literature recognizes that first-mover advantages (in the literature’s broader 

sense of the term) are unlikely to persist in industries characterized by rapid technological innovation. See, e.g., 

Bohlmann, Jonathan D. et al., “Deconstructing the Pioneer’s Advantage: Examining Vintage Effects and 

Consumer Valuations of Quality and Variety,” Management Science, Vol. 48, No. 9, 2002, p. 1175 (“Pioneers 

in categories with high vintage effects [i.e., technological evolution] are shown to have lower market shares and 

higher failure rates. Similar results appear when analyzing persistence of market leadership over time.”). Thus, 

the first mover in such an industry is unlikely to maintain its success without continued investment and 

successful execution. 

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for the first CDMA networks as early as 1995.199,200 As carriers began adopting CDMA, 

Qualcomm benefited from the growth in demand for modem chips of a type it was uniquely 

ready to produce.201 As I discuss further in Section V.B, over time, however, Qualcomm 

quickly ceased to be the only firm capable of supplying CDMA modem chips. 

99. The first mover in the modem chip industry can benefit for several reasons. First, the ability 

to meet OEMs’ requirements by bringing a new modem chip to the market in time for a new 

product launch allows the modem chip supplier to gain new product sales. Second, it allows 

the supplier to enjoy higher gross margins while it is the sole supplier of an innovative modem 

chip.202 Third, as I discuss in more detail below, being the first mover allows a modem chip 

supplier to enjoy an incumbency advantage because of switching costs for the OEMs. 

 

199 See, e.g., “History,” Qualcomm, available at https://www.qualcomm.com/company/about/history (“In March of 

1993, Qualcomm introduces the industry’s first dual-mode CDMA-AMPS mobile phone [...].”). In 1994, 

Qualcomm went on to establish a joint venture with Sony, QPE, to produce CDMA mobile devices. See, 

“Telephone Joint Venture,” The New York Times, February 28, 1994 (“Qualcomm Inc. and Sony Electronics 

Inc. said today that they would form a $52 million joint venture to manufacture portable phones using 

Qualcomm’s code division multiple access technology. [...] The joint venture, to be called Qualcomm Personal 

Electronics, will operate out of an existing factory in San Diego, according to Irwin Jacobs, Qualcomm’s chief 

executive. Production is expected to begin in the first quarter of 1995.”). See Section V.B for further details. 

200 See, e.g., Jacobs, Irwin M., “Statement by Dr. Irwin Mark Jacobs, Co-founder, Qualcomm, Prepared for the 

Hearing on Reauthorization of the SBIR and STTR Programs,” U.S. Senate Committee on Small Business and 

Entrepreneurship, February 17, 2011 (“The first CDMA network went commercial in Hong Kong in 1995; next 

two networks became operational in South Korea in 1996; and finally several networks became operational 

across the United States. Qualcomm provided handsets manufactured in San Diego for all of these early 

systems.”). 

201 On the flip side, firms that are not ready to produce demanded new technologies may find themselves at a 

considerable disadvantage. For example,

 in Section 

V.C.2. 

202 As additional suppliers enter the modem chip industry and the supply of modem chips increases, average sales 

price and, therefore, gross margins can decline. Additionally, if other OEMs increase the demand for the new 

modem chip, the “first mover” can obtain higher margins, at least until other suppliers can begin supplying 

similar modem chips. Finally, and as previously discussed, because of incremental standards advancements 

within each standard generation, and because OEMs often demand more advanced technological features with 

every subsequent product release (at least for high-end devices), the later a fast follower is to market, the lower 

the demand for a modem chip with those features, as more advanced features replace past capabilities. This is 

discussed in greater detail in Section III.E.2.b. 

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100. Although there is substantial demand for innovative mobile devices, it is important to 

recognize that the industry offers a range of products at any point in time.203 In addition to 

devices with the latest features and technologies, devices with older technology and fewer 

features are available. Specifically, mobile devices span the range from so-called ultra-lowcost handsets largely sold in emerging markets to high-end smartphones like Apple’s iPhone 

and Samsung’s Galaxy S. 204 , 205 Although some OEMs specialize in a particular device 

segment, other OEMs produce a range of devices that utilize modem chips with different 

specifications. In 2015, for example, Lenovo/Motorola introduced both the Moto X Pure 

Edition, which included a Qualcomm Snapdragon 808 chip supporting LTE Category 9 (with 

download speeds up to 450 Megabits per section [Mbps]),206 and the Moto G3, which used the 

 

203 In the economics literature, such industries are typically referred to as having vertically differentiated product 

markets. In such industries, firms will produce different products in different price ranges in order to serve 

different groups of consumers with differing willingness-to-pay for quality. See, e.g., Sutton, John, “Vertical 

Product Differentiation: Some Basic Themes,” The American Economic Review, Vol. 76, No. 2, 1986, p. 394 

(“[...C]onsumers partition themselves by income, in such a way that brands of successively higher quality are 

purchased by consumers in successively higher income bands. (This reflects the fact that the utility function 

just defined, has the property that a consumer’s willingness to pay for quality improvements is an increasing 

function of income.)”). See also Waldfogel, Joel, “Preference Externalities: An Empirical Study of Who 

Benefits Whom in Differentiated Product Markets,” NBER Working Paper Series, Working Paper 7391, 1999 

(“Theory predicts that in markets with increasing returns, the number of differentiated products – and resulting 

consumer satisfaction – grow in market size.”). 

204 Agar, Jon, Constant Touch: A Global History of the Mobile Phone, Icon Books, 2013, pp. 102–103 (“[T]he 

growth in just half a decade was extraordinary: from 8 per cent of the [Indian] population in 2005 to 70 percent, 

reaching over half of households, in 2010, according to the World Bank. [...] Partly this growth was driven by 

the manufacturers [...] slashing prices to chase the Indian consumer with offers of ‘ultra-low-cost’ handsets. (A 

similar pattern may be emerging in the 2010s, as companies such as Google work with Indian companies to 

develop cheap smartphones.) These ultra-low-cost handsets lacked many of the features of Western secondgeneration phones – screens would be black and white, not colour, and had few gizmos such as cameras or large 

memories.”). 

205 See, e.g., “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 6 (“The acceptance of 

Samsung’s Note8 Smartphone and Apple’s iPhone 8 series to be released in September will dictate the premium 

market segment growth for the 2nd half of 2017, being challenged only by Huawei with a small market share in 

the premium segment.”). See also “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 

2015, p. 16 (“Samsung has the most to lose in this region, consequently it has several new midrange lines, 

including the Galaxy A, Galaxy E and the low-end Galaxy J 4G smartphones, in addition to the high-end 

Galaxy flagship S and Galaxy Note lines.”). 

206 See, e.g., “Motorola Moto X Style,” GSMArena, available at 

https://www.gsmarena.com/motorola_moto_x_style-7229.php. See also Qualcomm, “Snapdragon 808 

Processor,” available at https://www.qualcomm.com/products/snapdragon/processors/808. 

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Qualcomm Snapdragon 410 supporting only LTE Category 4 (with download speeds up to 150 

Mbps).207

101. Lower-cost mobile devices typically do not require modem chips at the leading edge of 

technological innovation.208 Thus, while innovation is often a key driver of success among

leading-edge modem chip suppliers focused on customized modem chips for high-end devices, 

modem chip suppliers at the trailing edge of the industry may instead pursue a strategy of 

supplying less customized chips for “lower-end” phones.209 As established in the economics 

literature, due to the nature of innovation, there will generally be many more suppliers capable 

of producing modem chips incorporating older technologies than suppliers capable of 

producing innovative and highly customized modem chips. 210 When LTE was initially 

introduced, for example, Qualcomm was the only major supplier capable of producing multimode LTE chips.211 By 2011, Qualcomm faced competition for multi-mode LTE from ST-

 

207 See, e.g., “Motorola Moto G (3rd Gen),” GSMArena, available at 

https://www.gsmarena.com/motorola_moto_g_(3rd_gen)-7247.php. See also “Snapdragon 410 Processor,” 

Qualcomm, available at https://www.qualcomm.com/products/snapdragon/processors/410. 

208 See, e.g., Summerson, Cameron, “Are Cheap Android Phones Worth It?,” How-To Geek, November 24, 2017 

(“Most of the time, affordable phones have either current low-end hardware, or higher-end hardware from two 

or three years ago. [...] Right out of the gate, you have to keep in mind that you’ll be dealing with either a 

lower-end processor – like something from Mediatek, for example – or possibly an older Snapdragon chip, 

probably from somewhere around the 400 range.”). 

209 See Section III.D.1. Further, over time, once-novel features may become standard even in lower-end phones. 

See, e.g., Achour Deposition, Qualcomm, pp. 81–82 (“Q. Is category 4 LTE basic LTE? A. At that time in 

what -- I’m assuming you mean in 2011? Q. In 2011, yes. A. In that time category 4 was -- was roughly the -- 

when that category 4 was becoming the key. It was not basic, it was becoming like the -- what do you call, like 

the -- the high-end feature of LTE. It was the new thing, the innovative thing everybody wanted. So in that 

respect it was not basic LTE. It became basic LTE years down the road, but not when -- at the time when it was 

introduced. Q. Is category 4 LTE basic LTE today? A. Oh, yeah, it’s -- it’s -- category 4 today is shipping in 

our products in a very, very low tier of a product. These are very cheap phones, basic, that you can sell in India. 

So all those phones in India right now, they have cat 4 support. And in India phones could cost $25, you know, 

these are very cheap stuff.”). 

210 There are generally more firms capable of producing established than cutting-edge technologies in part because 

the costs of imitating an existing technology are significantly lower than the costs of innovating. See, e.g., 

Mansfield, Edwin, “R&D and Innovation: Some Empirical Findings,” in Zvi Griliches, ed., R&D, Patents, and 

Productivity, University of Chicago Press, 1984, p. 142 (“In our sample, imitation cost averages about 65 

percent of innovation cost, and imitation time averages 70 percent of innovation time.”). This has also been 

documented in particular in the semiconductor industry. See, e.g., Kumar, Rakesh, Fabless Semiconductor 

Implementation, McGraw Hill, 2008, pp. 16–17 (“The cost of process R&D escalates exponentially if you are 

the first developer of a new technology node [...]. Costs can be significantly lower if one chooses to be a 

‘follower’ and be a year or more behind implementing new technologies.”). 

211 “Qualcomm to Ship Industry’s First Multi-mode LTE Chipsets in 2009”, Qualcomm Press Release, February 7, 

2008. Additionally, in 2013 Qualcomm announced a new LTE chip that can support all LTE networks 

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Ericsson, Icera, and Samsung.212 By 2014, there were at least 14 LTE modem chip suppliers, 

at least 11 of which were supplying multi-mode LTE chips.213

102. Finally, although innovations may often sway an OEM’s choice of modem chip, OEMs do not 

always demand modem chips that are cutting-edge in all dimensions, even for devices that 

OEMs market as cutting-edge. 

214 

 worldwide. See, e.g., “Qualcomm RF360 Front End Solution Enables Single, Global LTE Design for NextGeneration Mobile Devices,” Qualcomm Press Release, February 21, 2013 (“Qualcomm Technologies, Inc., 

introduced the Qualcomm RF360 Front End Solution, a comprehensive, system-level solution that addresses 

cellular radio frequency band fragmentation and enables for the first time a single, global 4G LTE design for 

mobile devices. [... N]ew RF devices are tightly integrated and will allow [...] the flexibility and scalability to 

supply OEMs of all types, from those requiring only a region-specific LTE solution, to those needing LTE 

global roaming support.”). 

212 Exhibit 3, Lederer Deposition, Qualcomm, Q2014FTC03837571, p. 2 (“Competition for multi-mode LTE in 2H 

2011 from: STE, Icera, Samsung.”). 

213 See Exhibit III.D.2. See also “LTE Chip Market Trends,” Forward Concepts, 2014, p. 68 (“Broadcom[’s 

MP6530 [...] was an integrated multi-mode modem for LTE, DC-HSPA+, GSM, GPRS and EDGE.”), p. 71 

(“The Marvell Mobile PXA1928 is a single-chip quad-core A53, 5-mode Long Term Evolution (LTE) solution 

supporting all global mobile broadband standards, including LTE Cat4 TDD/FDD, High Speed Packet Access 

Plus (R8 HSPA+), Time Division High Speed Packet Access Plus (R8 TD-HSPA+) and Enhanced Data for 

GSM Environment (EDGE).”), p. 87 (“[Spreadtrum’s] SC9610 integrates multiple communication standards 

into a single-chip design, including multiband TD-LTE and TD-SCDMA and quad-band EDGE/GPRS/GSM.”), 

p. 88 (“[Ericsson’s] M7400 LTE/3G platform complies with the 3GPP R8 radio specification for LTE FDD, and 

supports a tri-band HSPA and quad-band GPRS/EDGE multi-mode modem capability.”), and p. 91 (“[Intel’s] 

XMM 7160 slim modem module, with X-Gold 716 baseband processor fits in less than 700mm2 PCB (Printed 

Circuit Board) area including all necessary system components for quad band LTE, Penta-band 3G and quad 

band EDGE applications”); “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, 

p. 44 (“Qualcomm’s newly launched MSM8960 is the first mobile processor with an integrated modem 

supporting TD-LTE/FDD-LTE/EVDO/WCDMA.”), p. 44 (“MediaTek’s MT6599 8-core ARM CPU, designed 

in a 28 nm process, with integrated baseband for LTE and TD-SCDMA / WCDMA.”), p. 66 (“Huawei, via its 

HiSilicon Subsidiary, has designed the Hi6920 with the ability to support LTE R9. [...] Huawei’s Hi6920 is the 

industry’s fastest multi-mode chip to support a complete range of standards: LTE TDD/FDD/TDSCDMA/UMTS/GSM/EDGE/GPRS.”), p. 66 (“[Innofidei’s] 3rd generation Cat4 LTE A baseband is 

multimode supports 3GPP R10”), and p. 72 (“[Renesas Mobile’s] triple-mode SP2531 Modem (EDGE, 3G and 

4G LTE)”); “NVIDIA Icera Modem Chipset Validated on AT&T LTE Network,” NVIDIA Press Release, May 

23, 2012 (“The NVIDIA Icera 410 LTE modem delivers lightning-fast web browsing, video streaming and 

multiplayer gaming to tablets and clamshell devices. It is the first Icera modem to implement 4G LTE in 

NVIDIA’s software defined radio baseband processor. Together with its multimode radio transceiver, the 

chipset offers 4G LTE at category 2 data rates (up to 50 Mbps) as well as 4G HSPA+, 3G and 2G 

compatibility.”). 

214 

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216

103.

 

 

 

 See also Achour Deposition, Qualcomm, pp. 126–127

215 See, e.g., 

 See also “Snapdragon X16 

LTE Modem,” Qualcomm, available at https://www.qualcomm.com/products/snapdragon/modems/4g-lte/x16. 

(“The Snapdragon X16 LTE cellular modem employs sophisticated digital signal processing [...] all of which 

come together to achieve download speeds of up to 1 Gbps.”). See also 

216 APL-QC-FTC_26682372–2410, at 2381 (Carrier Update and Spring/Summer Launch, Apple, March 14, 2017). 

217 

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b. Influences on OEMs’ choices concerning number of suppliers and changes in 

supply relationships 

i. OEMs must weigh countervailing factors, both statically and dynamically

104. OEMs’ existing relationships with modem chip suppliers can influence which suppliers’ 

modem chips they will demand going forward. This dependence arises because of costs 

 

218 

219 

220 See, e.g., Achour Deposition, Qualcomm, pp. 87–88 

 See also

 

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associated with starting a new supply relationship, which in turn arise due to, for example, 

customization between device and chip.

105. When deciding how many modem chip suppliers to use, either for a particular device or overall 

across its portfolio of mobile devices, and either at a specific time or over time, an OEM must 

weigh countervailing factors. The costs and benefits of using a single modem chip supplier 

versus sourcing chips from multiple suppliers or changing suppliers can vary widely among 

OEMs depending on their mobile device product portfolio, their product cycles, and other 

factors. 

ii. OEMs’ choice of number of suppliers for a given device 

106. Because modem chips are not generally standardized to be interchangeable in the mobile 

device manufacturing process, the mobile device and/or the modem chip inside it are typically 

designed for the other to some degree, and to a large degree customized for certain high-end 

mobile device OEMs like Apple. Therefore, OEMs must incur costs to work on integrating 

any modem chip supplier’s product into the mobile device. OEMs’ device designs take into 

consideration the modem chip(s) that will be incorporated in a given device, including size and 

connections to other components of the device. Similarly, modem chip suppliers may 

customize their chips and software to accommodate an OEM’s requirements. This 

customization is costly because mobile device OEMs may need to modify their designs if they 

were to change or add modem chip suppliers for a given device, and/or the new supplier may 

need to customize a chip and software for the OEM.221 Customization costs may therefore 

 

221 See, e.g., Deposition of Cristiano Amon, President of QCT at Qualcomm, March 12, 2018 pp. 412–413 (“Amon 

Deposition, Qualcomm”) 

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drive down the number of modem chip suppliers that an OEM prefers to use for a specific 

device model, as each supplier comes with additional customization expense.222,223

107. For example, modem chips from different suppliers typically will not fit in the same socket 

and will not interface with other components in the device in the same way, and the electrical 

connections will be in different physical locations and function in different ways, absent 

additional customization work.224 Reconciling all of these differences is costly.225 Therefore, 

if an OEM decided to use two modem chip suppliers for a specific device, it would generally 

need to undertake this engineering work twice, to design a version of the device that is pincompatible with the first modem chip supplier’s chip and another version of the device that is 

pin-compatible with the second supplier’s chip, an added cost that incentivizes OEMs to use 

the same chip supplier. 

 

222 

223 

224 As an example of the level of customization required, consider the pin maps of Qualcomm Processor 

APQ8064E. “Qualcomm Snapdragon 600E Processor APQ8064E: Device Specification,” Qualcomm, July 

2017, pp. 35–39, available at https://developer.qualcomm.com/download/sd600/snapdragon-600-devicespec.pdf. For the chip to correctly interface with other chips and other parts of the mobile device, the pins 

described in these maps must match the electrical connections of the device. 

225 For a discussion of switching costs perceived by Blackberry, see Deposition of Chris Efstathiou, Former Senior 

Vice President of Global Supply Chain at BlackBerry, Apple Inc. v. Qualcomm Inc., February 13, 2018, p. 116 

(“Efstathiou Deposition, BlackBerry”) (“Q. Do you have any understanding of the cost to BlackBerry to switch 

chipsets from one supplier to another supplier? A. Again, that would tie to the radio protocol stack software 

and whether or not that came with the chip. If it didn’t and we had to write it ourselves it was a herculean 

effort. If it came with it then it wasn’t. So I would again leave that to the engineers to evaluate.”). 

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108. Consistent with such additional engineering work, OEMs must typically increase headcount to 

support every additional modem chip supplier brought on. 

.

226 The additional employees work on the modem chip architecture to ensure 

size and layout compatibility with the mobile device, debug the software stack (which can 

involve “thousands” of bugs),227 and facilitate interoperability testing, which is testing how the 

modem chip works in the device on every carrier network compatible with the device. 

109. Bringing on multiple modem chip suppliers would also increase the costs of the product release 

and marketing, particularly if the suppliers are offering chips with differing multi-mode 

functionality. The OEM must ensure that the correct chips go in the correct geographic phone 

models, and must have separate supply chains for each.228 Furthermore, sourcing from a single 

 

226 

227 

228 See, e.g., Renduchintala IH, Qualcomm, pp. 158–160 

 

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supplier typically allows OEMs to purchase a modem chip in larger quantities and qualify for 

quantity discounts that modem chip suppliers may offer.229 

110. The marketing and product release costs limit the number of modem chip suppliers an OEM is 

willing to consider for a given device. Apple’s modem chip sourcing strategy is consistent 

with this expectation, as in the past it typically has used only one modem chip supplier for its 

iPhone and iPad devices. 

230

111. On the other hand, an OEM may opt for different chip suppliers for the same device in different 

geographic markets, particularly when carriers or networks impose different constraints on the 

mobile device. As I discuss further in Section IV.A, recent models of the Samsung Galaxy S 

smartphone series have typically used Samsung’s own Exynos chips for some regions and a 

Qualcomm modem chip for other regions, while earlier models have sometimes used modem 

chips from other suppliers.231 Similarly, in contrast to its previous strategy of using modem 

chips from a single supplier, Apple now uses both Intel and Qualcomm chips in its current 

iPhone models, the iPhone 8 and iPhone X, with Qualcomm’s chips enabling devices to work 

on all major U.S. carriers’ networks as well as worldwide.232

 

229 The proliferation of quantity discounts is widely recognized. See, e.g., Altintas, Nihat et al., “Quantity 

Discounts Under Demand Uncertainty,” Management Science, Vol. 54; No. 4, 2008, p. 777 (“To motivate 

buyers to increase their order quantity, suppliers often rely on a well-established and widely used approach – 

they offer quantity discounts.”). 

230 

231 See Section IV.A for additional details. 

232 See, e.g., Segan, Sascha, “Exclusive: Qualcomm’s iPhone X Still Outpaces Intel’s,” PCMag, December 1, 2017 

(“There are three iPhone X models sold globally. Using lab equipment, Cellular Insights tested two of them: 

the Qualcomm-powered A1865, sold by Sprint, Verizon, and U.S. Cellular and in Australia, China, and India; 

and the Intel-powered A1901, sold by most other global carriers including AT&T and T-Mobile. (The third 

model, A1902, is only sold in Japan.) Here in the US, we anticipate that the SIM-free model sold directly by 

Apple will be the A1865, as that’s the model that supports all four US carriers.”). 

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112. Using more than one supplier may also mitigate risks associated with supply disruptions.233 

.

234,235 

. 

113. In summary, the costs associated with sourcing from multiple suppliers or adding a new 

supplier encourage an OEM to continue procuring modem chips for a given device model from 

the same supplier, with few exceptions. Because the cost of customization to use a particular 

supplier’s chip is roughly constant no matter how many units of a device model are sold, 

customization costs may particularly discourage the use of a second supplier for a low-volume 

device. On the other hand, if an OEM expects to achieve a high sales volume for a specific 

device, the initial customization costs from adding a second supplier can be spread out over a 

larger sales volume, resulting in a smaller cost per device.

iii. OEMs’ choice of number of suppliers for different devices at the same 

time 

114. For OEMs that produce a broader product portfolio, the costs and benefits of using the same 

modem chip supplier for multiple devices versus sourcing from multiple suppliers are different 

from the considerations relevant for a single device. In particular, a second supplier may 

 

233 The use of multiple suppliers is recognized as one way to build resilience against supply disruptions. See, e.g., 

Chopra, Sunil, and ManMohan S. Sodhi, “Managing Risk to Avoid Supply-Chain Breakdown,” MIT Sloan 

Management Review, Fall 2004, p. 55 (“Companies can counter disruptions in material flow by building 

inventory, or by having redundant suppliers (since it is unlikely that all suppliers would be disrupted 

simultaneously).”). 

234 (“Q. [...] How would introducing a second supplier promote future 

innovation and reduce dependence? A. First, on future innovation, I think when you have two suppliers, they 

still want to keep some degree of pricing power. So they innovate to compete against their peers. They want to 

be better. We think that’s a good thing. There’s areas where we see that happening. Reduced dependence, any 

time we’re dependent on a supplier, there’s price risk as well as supply risk.”). 

235 

 

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produce modem chips that are better suited to other devices in an OEM’s product portfolio. 

Therefore, an OEM that produces a broader range of products would be expected to source 

from a greater number of modem chip suppliers, as chips from different suppliers may be better 

suited for different mobile device products.236 Conversely, an OEM such as Apple that limits 

the number of mobile devices it produces will be more likely to source modem chips from 

fewer suppliers. 

115. The benefits of sourcing chips for multiple devices from the same supplier may exceed the 

costs of such a sourcing strategy. One of these benefits, for example, is the fact that OEMs, 

by sourcing chips for multiple devices from the same supplier, have greater power to negotiate 

quantity discounts. Furthermore, using a single supplier across several devices reduces the 

costs of adapting to each supplier’s procurement process and technical support, and it 

minimizes the costs of software customization.237

116. A competing consideration is the OEM’s strategy for negotiating with chip suppliers. For 

some OEMs, using different modem chip suppliers across different mobile devices may 

increase an OEM’s bargaining power and/or mitigate risk, as described above. The use, or 

credible consideration, of more than one supplier, even for different devices, may make it 

easier for an OEM to credibly threaten to shift its purchases from one supplier to the other and 

 

236 See, e.g., Deposition of Hermann Eul, Manager of Mobile Wireless Group at Intel, March 21, 2018, p. 95 (“Eul 

Deposition, Intel”) (“Q. And were there any differences in approach between Samsung and Apple in terms of 

willingness to use new platforms? A. Samsung followed a multisourcing strategy. Q. Meaning that Samsung 

used baseband processors from a variety of different suppliers? [...] A. Yeah, a variety is not really clear 

whether that means two or five. But from different suppliers, if we keep it that simple.”). 

237 Such benefits of repeated transactions between a buyer and a supplier are also recognized in the economics 

literature. See, e.g., Williamson, Oliver E., “Transaction Cost Economics,” in Schmalensee, Richard and 

Robert D. Willig, Handbook of Industrial Organization, Vol. 1, Elsevier Science Publishers B.V., 1989, 

pp. 135–182, pp. 144–145 (“Rivals cannot be presumed to operate on a parity [...] once substantial investments 

in transaction specific assets are put in place. Winners in these circumstances enjoy advantages over 

nonwinners, which is to say that parity at the renewal interval is upset. Accordingly, what was a large numbers 

bidding condition at the outset is effectively transformed into one of bilateral supply thereafter.”). 

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therefore to bargain over prices and other terms.238 For example, Samsung considered chips 

from alternative suppliers as a way to discipline prices.239

iv. OEMs’ choice of number of suppliers across time 

117. Finally, the considerations relevant for choosing the number of modem chip suppliers and the 

identities of those suppliers vary over time due to the relatively short mobile device life cycles. 

A modem chip supplier’s design win for one device model does not guarantee future success 

for other devices with the same OEM, and suppliers must compete again with the next device 

release. For many devices, most sales occur within the first year or two after launch, and many 

OEMs launch new devices every year.240 This gives OEMs potential opportunities to switch 

modem chip suppliers or add new suppliers as they develop and launch new mobile devices 

(or new models of their existing devices), if they find that the benefits of doing so exceed the 

costs. This also implies that once an OEM decides to source modem chips for a given device 

from a certain supplier, other modem chip suppliers will not be able to supply chips for that 

device until the next model is launched, at the earliest. For instance, Apple’s decision to use 

Intel’s modem chips for all 2018 and/or 2019 iPhone models means that no other supplier will 

likely have the opportunity to supply modem chips to Apple before 2020.241 

 

238 Even the specter of dual-sourcing could be a negotiating tactic. See, e.g., Deposition of Kun Qian, Vice 

President of Sales at Qualcomm, February 8–9, 2018, p. 112 (“Qian Deposition, Qualcomm”)

239 See, e.g., Deposition of Hojin Kang, former Director of Purchasing in the Mobile Division at Samsung, 

February 28 – March 1, 2018, p. 38 (“Kang Deposition, Samsung”) 

240 See, e.g., the discussion on device product cycles in section III.C.2.b. 

241 An Apple employee testified in February 2018 that Intel would be in 100 percent of the 2018 iPhones. Schafer 

Deposition, pp. 121–122 (“Q. [...] For that product that will be launched as a new product in the fall of 

2018, who does Apple anticipate having modems from in that product? [A. ...] Intel. Q. Is that for all 

products, worldwide? A. Yes.”). Subsequently, press reports have indicated that Intel will supply 70 

percent of modem chips for the 2018 iPhones. See also Sullivan, Mark, “Intel to Supply 70% of iPhone 

Modems this Year, 100% in 2019,” Fast Company, April 25, 2018 (“Apple is expecting Intel to supply 70% of 

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118. Some OEMs may find it advantageous to continue sourcing modem chips from the same 

supplier(s) even as they release new devices, as there may be efficiencies associated with 

keeping existing supply relationships over time.242 The economics literature recognizes this 

phenomenon as an incumbency advantage.243 Some of the other types of costs mentioned 

above, including additional headcount, software debugging, and interoperability testing, may 

become less important over time, but may still encourage an OEM to continue sourcing modem 

chips from the same supplier. 

119. On the other hand, OEMs may be more willing to bear additional customization costs if 

changing or adding a modem chip supplier allows them to integrate new features not offered 

by current suppliers, or if a change is necessary to keep up with technology or receive a lower 

price. In such cases, the benefit to using a new supplier is likely to outstrip the cost.244 As 

discussed in Section IV.B, for example, the introduction of 4G LTE was followed by an 

increase in turnover in modem chip supplier–OEM relationships. Moreover, such important 

developments in wireless standards may also be accompanied by more radical mobile device 

redesigns, which may make it more worthwhile for an OEM to consider the most appropriate 

 the modem chips inside the new iPhone models, which will debut this fall, and – if all goes well – plans to 

rely on the company for 100% of the modems in next year’s iPhones, a source with knowledge of Apple’s 

plans says.”). 

242 

243 See, e.g., Tunca, Tunay I. et al., “An Empirical Analysis of Price, Quality, and Incumbency in Procurement 

Auctions,” Manufacturing & Service Operations Management, Vol. 16, No. 3, 2014, p. 347 (“[...T]here are 

strong incentives for industrial buyers to award incumbent suppliers, since this would provide minimal 

disruption in their processes and allow them to do business with a known partner.”). 

244 

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supplier for its new devices. Therefore, competitive pressures on modem chip suppliers can 

be particularly intense when new wireless standards and subsequent category releases are being 

adopted on cellular networks. 

120. Given these competing considerations at any given time and over time,245 different OEMs may 

choose to source modem chips from different numbers of suppliers, and indeed an OEM may 

vary its number of suppliers over time.246 My analysis in Section IV.A provides evidence to 

support these conclusions and shows that most years from 2008 to 2017 saw many changes in 

OEM–supplier relationships. 

c. Characteristics of modem chips and suppliers 

121. When choosing a modem chip supplier, device OEMs weigh characteristics of the supplier’s 

modem chips as well as characteristics of the supplier itself. Given that a single supplier may 

not necessarily be the best in all relevant dimensions, an OEM’s choice of modem chip supplier 

will depend on the relative importance it assigns to various characteristics.247

 

245 

246 

 

247 

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i. Modem chip characteristics 

122. Various characteristics of modem chips are important to OEMs. These characteristics include 

the wireless standard or standards implemented, including the category of the standard 

implemented, the performance of the chip, the size of the chip, whether the chip integrates 

other features, and price; a supplier’s ability to deliver on these characteristics may be closely 

related to its success in innovation. Note that the chip characteristics that OEMs value are not 

independent of one another; for example, the wireless standard(s) with which a modem chip is 

compatible constrains elements of its performance. How competing modem chips compare 

across these dimensions is an important determinant of which supplier’s chip is selected for a 

device. 

123. In addition, mobile network carriers have their own requirements that affect an OEM’s choice 

of a chip for a particular device. Specifically, carriers typically require that certain features 

and specifications be included in high-, mid-, and low-end mobile devices that operate within 

their networks. This in turn, affects an OEM’s demand for modem chip characteristics across 

devices and across geographic regions. For example, if an OEM wants to sell mobile devices 

in the U.S. through a particular carrier, it may have to select a chip that supports the carrier’s 

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specific technological requirements, in addition to being compatible with the wireless 

standards that carrier uses.248,249 

 

248 See, e.g.,

 Verizon’s chipset certification and approval process also includes a list of requirements that must be 

satisfied by chipsets to be included in Verizon’s certified chipset list. See, e.g., VZ-00004851–4880 at 4855 

(“The goal of the chipset certification testing and approval process is to define a uniform set of criteria that will 

be used for all chipsets to evaluate its capabilities and conformance to industry and Verizon Wireless 

specifications, before it is approved to be listed in the Verizon Wireless CERTIFIED chipset List.”). Verizon 

has also encouraged OEMs to adopt certain technologies. See, e.g., “Verizon: We’ll have CBRS 3.5 GHz 

devices by end of 2018,” FierceWireless, April 5, 2018 (“‘CBRS is a key component of Verizon’s technology 

strategy,’ the company said in a statement to FierceWirelessTech. ‘As such, Verizon has strongly encouraged 

all OEMs to adopt CBRS support to take advantage of this technology. CBRS-capable devices will begin 

entering the lineup by the end of 2018 and will continue to expand aggressively through 2019.’”). 

249 See, e.g., Renduchintala IH, Qualcomm, p. 44 (“Q. And was that [carrier aggregation] something that customers 

– it looks like something customers were willing to pay extra for; is that correct? A. It was something that 

network operators encouraged Qualcomm to develop and then directed their OEMs to make sure that they had 

in their products, yes.”), p. 46 (“Q. And then they [carriers], in turn, would turn to the OEMs who are your 

[Qualcomm’s] direct customers and say we want to offer this service. You need to give us a phone or a handset 

that has the technical capability of providing that, so go buy chips -- the implication is you better go buy chips 

that can do it? A. I would say what they said is if you’d like to be part of our handset portfolio, then these are 

the specs of the devices we’re interested in purchasing. If you’re able to deliver handsets that support those 

specs, we would be happy to try your devices and approve them on our network [...] What they basically said is 

this is what it takes to be part of our handset portfolio.”), and pp. 166–167 (“Q. [...] And what does ‘feature set’ 

mean in that context? A. It means advanced techniques that certain operators wanted. So it could be things like 

-- I’m going to get very technical here so I apologize. It would be like data interference cancellation on LTE or 

specific voice codex that could support voice on LTE. It could be specific peak modem rates that were required 

for peak performance. It was essentially the latest cutting-edge features in the modem space that some of the 

most advanced operators were very keen to have in their network, like technologies like four-by-four multiple 

input/multiple output antenna configurations which can support really high data rates.”). 

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124. Wireless standard(s) implemented: Mobile device OEMs often demand chips compatible with 

the latest wireless standards, which are associated with higher data transmission speeds for end 

consumers.250 

125. Primarily, this demand is for multi-mode chips. 251 , 252 As discussed above, multi-mode 

functionality is important in part because carriers roll out support for new generations of 

wireless standards gradually. Multi-mode chips therefore often provide support for standards 

of multiple generations. In the case of LTE, multi-mode chips with backward compatibility 

have been particularly important because LTE networks initially transmitted only data, with 

voice calls transmitted via an older standard.253 Even after the deployment of VoLTE and 

broad geographic carrier implementation of LTE networks, LTE devices typically still require 

backward compatibility, in the form of either a multi-mode chip or two separate chips, for 

voice transmission. More generally, backward compatibility with older standards may increase 

 

250 See, e.g., Deposition of John Grubbs, Senior Director of IP transactions at BlackBerry, March 1, 2018, pp. 212–

213 (“Grubbs Deposition, BlackBerry”) (“Q. Once LTE chipsets were introduced into the market, how 

important were LTE-capable chipsets to Blackberry’s business? A. I think they were extremely important. 

[...A]s carriers made the switch over to LTE, they would [...] start requiring that new devices from BlackBerry 

be LTE compatible. [...] Carriers will require LTE, so we have to supply them devices with LTE.”).

251 Industry reports suggest that when the first LTE multi-mode chips were released in 2011, 89 percent of all LTE 

chip shipments had multi-mode capabilities. By 2013, 95 percent of all LTE chip shipments were multi-mode. 

This proportion was forecasted to remain stable through 2018. See, e.g., “Comprehensive Cellphone & Tablet 

Chip Markets,” Forward Concepts, 2013, p. 37. See also “LTE Chip Market Trends,” Forward Concepts, 2014, 

p. 59. 

252 see, e.g., Amon Deposition, 

Qualcomm, pp. 406–407

253 Some carriers have begun deployment of VoLTE, which provides LTE support for voice calls. See, e.g., Eul 

Deposition, Intel, pp. 101-102 (“Q. And was there a relationship between when CDMA would be sunsetted and 

when Voice over LTE technology would become available? [...] Was there a connection, in your mind, 

between those two issues? [...] A. Yeah, the operators that were relying on CDMA technology would have to 

have some alternative to do voice calls, which pretty much was that’s what CDMA was good in. And so that 

means there needed to be an alternative, and VoLTE was contemplated as being the voice capability of LTE.”). 

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the geographic and network range of the device’s connectivity and is therefore generally a 

carrier-driven requirement.254

126. Support for multiple contemporaneous standards may also allow a device to connect to a larger 

set of networks. A chip compatible with both WCDMA and CDMA2000, for example, could 

support 3G connections on all four major U.S. carriers.255 Similarly, a chip with support for 

both WCDMA (introduced in the U.S. in 2004) and TD-SCDMA (for which support was 

introduced in China in 2008) may allow a consumer to use the device with, for example, AT&T 

in the U.S. and China Mobile in China.256 It may also allow an OEM to use a single modem 

chip in the U.S. and China, simplifying design and production. 257 Finally, multi-mode 

functionality allows carriers to use frequencies that are allocated to older generations, therefore 

using the available spectrum more efficiently.258

127. A country’s current and historical carrier landscape may shape demand for multi-mode chips. 

In China, for example, where the three major carriers have used three different 3G families of 

 

254 See, e.g., Grubbs Deposition, Blackberry, p. 210 (“Q. Was it important for a chipset to be backwards 

compatible with LTE and either CDMA or UMTS? A. Yes. Q. Why? A. The carriers would have required that 

all of our devices be not only compatible with LTE, but AT&T, for example, would have required that it be 

backwards compatible with HSPA+, W-CDMA, and -- and maybe even GSM, whereas Verizon would have 

required that it be backwards compatible [...] with LTE as well as the CDMA variants [...] that preceded 

that.”). 

255 See, e.g., Kellen, “Cheat Sheet: US Wireless Carrier Bands for Unlocked Phones,” Droid Life, February 5, 

2015. Note that in context, “GSM” refers to GSM’s 3G successor, WCDMA; and “CDMA” refers to the 3G 

successor to cdmaOne, CDMA2000. 

256 AT&T Wireless introduced UMTS (WCDMA) service in the U.S. in 2004. See, e.g., “UMTS Comes to U.S.,” 

RCR Wireless News, July 26, 2004. See also Back, Aaron, “China Mobile to Test TD-SCDMA on 60,000 

Phones from April 1,” Cellular News, March 27, 2008. 

257 

258 4G Americas (now, 5G Americas), an industry trade organization for telecommunication services, noted the 

importance of using new and already allocated band in the same device. “5G Spectrum Recommendations,” 4G 

Americas, August 2015, pp. 7–8 (“The continuous increase in data and video traffic makes it essential to 

increase the amount of spectrum within which these technologies can be deployed and in a way that is 

compatible with currently allocated bands, so that current and new bands can be used in a complementary 

manner and in the same devices with comparable technology. New mobile broadband spectrum below 6 GHz 

can be used together with current mobile broadband spectrum in a well-understood manner.”). 

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standards (CDMA2000, WCDMA, and TD-SCDMA), and where both TD-LTE and FD-LTE 

are in use,259 there is demand for five- or six-mode chips with support for these standards.260 

This demand, in turn, has contributed to the continued demand for modem chips supporting 

CDMA. For example, as discussed in more detail in Section V.C.5, HiSilicon invested in 

multi-mode modem chips such as the HiSilicon Kirin 960 that were compatible with Chinese 

networks that required chips supporting CDMA.261 Samsung, similarly, introduced the Exynos 

7 9610, a six-mode modem chip supporting CDMA and LTE, to address the growing Chinese 

market.262

128. Performance: Device OEMs value a variety of quality and performance dimensions as well as 

specific features and capabilities in modem chips. Two key dimensions of chip performance 

are data transmission speed capabilities and power consumption.263 Data transmission speed 

is the amount of data that can be transmitted in a unit of time, typically measured in Mbps. It 

affects the type and quality of content that users can access through cellular data, such as 

 

259 See Section III.C.2.a. 

260 See, e.g., SFT-07740063–0085 (Translation) at 0070, presentation titled 

” Samsung, February 20, 2016 

 

 

261 See, e.g., Cutress et al., “Huawei Announces the HiSilicon Kirin 960: 4xA73 + 4xA53, G71MP8, CDMA,” 

AnandTech, October 19, 2016. 

262 See, e.g., Mu-Hyun, Cho, “Samsung Boosts Mid-tier Exynos 7 AP with Deep Learning Image Processing,” 

ZDNet, March 22, 2018 (“[The Exynos 7] has a 6 mode modem that covers 2G CDMA to 4G LTE. [...P]roducts 

like Exynos 7 are largely aimed at the Chinese market”). 

263 For a discussion on the importance of data transmission speed in the marketing of LTE, see, e.g., Achour 

Deposition, Qualcomm, p. 87 (“That’s one aspect of [...] advanced LTE, yeah, it could be improving [...] peak 

rate. It’s always been a race to the higher peak rate every year, since 2010. This is one big aspect that probably 

gets a lot of media attention because it’s easy to refer to peak rate [...].”). See also Exhibit QX0209, Loh 

Deposition,

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whether a phone is only able to transmit emails and text messages or can stream live highdefinition video and provide real-time GPS mapping.

129. Power consumption, which is affected by the modem chip, the AP, and other device 

components, is important for battery life.264 Battery life is typically measured by how long a 

phone can perform a certain function, such as conducting a phone call, playing music, or 

streaming video, between charges.265 Chips with low power consumption allow phones to 

have longer battery life. As mobile device functionality has rapidly increased, maintaining 

battery life, and thus using chips with low power consumption, has become more important.266

130. Size: All else equal, reducing chip size lowers the cost and power consumption of a modem 

chip.267 It also allows the chip to be placed in a physically smaller package, which allows for 

 

264 See, e.g., Deposition of Kevin Constantine, Head of Sales to Apple in North America at Intel, February 15–16, 

2018, p. 239 (“Constantine Deposition, Intel”) (“Q. Is power usage generally an important factor in LTE 

modem development? A. Yes, and we think we’re pretty good at it, actually. Yeah, we think that’s a strength 

of ours. Q. And is power usage important because battery life in a mobile product is important to consumers? 

A. For example, yes.”). See also Achour Deposition, Qualcomm, p. 361 (“Q. Is power management or power 

efficiency an important part of designing a cell phone? A. It is the most important thing that makes a phone 

usable, I think. Because I remember the days where the phone had to be charged every few hours, and that 

really limits the adoption of the use of a phone, if someone has to find an outlet every few hours. So making the 

phone last at least a day, it’s a key -- very, very important aspect of designing a phone.”). 

265 See, e.g., “Snapdragon Performance,” Qualcomm, available at 

https://www.qualcomm.com/products/snapdragon/battery-life (“Now you can stream your favorite videos 4+ 

hours longer thanks to a 30% power reduction of 4K UHD premium video capture. [...] You can even talk 

longer - up to 2 days longer - with a 20% power reduction of continuous UHD voice. All with the new 

Qualcomm Spectra ISP architecture.”). See also Williams, Andrew, “Best Phones for Battery: 8 Smartphone 

Stamina Champs,” Techradar, December 24, 2017 (A measure of battery life cited is the battery lost from a 90-

minute video played at full screen brightness: “The battery king: Huawei Mate 10 Pro [...] it lost just 9% of its 

battery from a 90-minute video played at full screen brightness.”). 

266 See, e.g., Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge Wireless Essentials 

Series, 2012, p. 109 (“For mobile devices, unlike PCs and other mains-powered devices, power consumption is 

the key design issue which dominates many decisions. Trends in chipset design continue to reflect increasingly 

innovative approaches to reducing power consumption further. A continued focus on reducing power 

consumption is essential in order to mitigate the great increase in processing requirements to support functions 

such as high-performance graphics and multimedia, and to provide support for an increasing number of 

wireless air interfaces.”). 

267 See, e.g., Olson, Parmy, “Broadcom Challenges Qualcomm with ‘Smallest’ 4G LTE Smartphone Modem,” 

Forbes, February 12, 2013 (“[Broadcom] says the [smartphone modem chip BCM21892] takes up 35% less 

space than its previous offerings. As a result of being so small the modem chip will also be more energy 

efficient and cheaper to produce.”). See also Achour Deposition, Qualcomm, pp. 197–198 (“[...T]hink of a 

product as a collection of Legos. Each Lego takes space in that product [...] each Lego has to basically reduce 

its area to make sure the overall cost is contained within what they target.”). 

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smaller mobile devices. Again, all else equal, device OEMs prefer smaller, more compact 

chips, which allow them to pack more functionality into a smaller space.268

131. Integration of other features: As discussed in more detail in Section III.C.1 above, modem 

chips differ in their level of integration with other components, such as the AP. Most OEMs 

now demand SoCs because incorporating many functions in a single chip allows them to 

reduce device size and costs.269 SoCs also tend to be more power efficient, which improves a 

device’s battery life.270

132. Because of advantages such as these, most OEMs have embraced SoCs, and overall the 

industry has shifted toward integrated solutions.271 In some instances, OEMs only consider 

modem chip suppliers equipped to design SoCs.272 Modem chip designers that do not invest 

in the development of modem chips incorporating other features, such as the AP, are not able 

to tap into the demand for SoCs.273 

 

268 See, e.g.,

See also Seifert, Dan, “Broadcom’s First LTE Modem Bets on Small Size and Lots of Features to Edge Out 

Qualcomm,” The Verge, February. 12, 2013 (“Smaller chips mean that device manufacturers have more room 

on their component boards, allowing them to either shrink devices down even further or make room for other 

features that couldn’t fit otherwise.”). 

269 See, e.g., Kressin Deposition, Qualcomm, pp. 39–40 (“Q. And do you present these plans as they relate to 

modem features? A. I usually present our -- all the customers I visit are interested in our SOCs. I don’t visit 

customers to talk about our thin modems; I talk about our SOCs.”). See also 

270 Niu, Evan, “Is This What’s Held Back Apple, Inc.’s Cellular Baseband Ambitions?,” Nasdaq, January 18, 2017 

(“Integration provides significant benefits in costs and power efficiency relative to stand-alone modems.”).

271 Niu, Evan, “Is This What’s Held Back Apple, Inc.’s Cellular Baseband Ambitions?,” Nasdaq, January 18, 2017 

(“‘There is no stand-alone modem business anymore.’ That’s NVIDIA CEO Jen-Hsun Huang from a 

conference call way back in 2013, when the company was developing a Tegra mobile processor with an 

integrated baseband modem to challenge Qualcomm (NASDAQ: QCOM). The baseband market had been 

shifting toward integrated solutions for years, and Qualcomm was by far the technological leader with 

integrated cellular connectivity. Integration provides significant benefits in costs and power efficiency relative 

to stand-alone modems.”). 

272 See, e.g., Achour Deposition, Qualcomm, pp. 105–106 

273 I discuss this in more detail in Section III.E.2.a, where I analyze the importance of demand foresight for modem 

chip suppliers. 

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133. Apple, meanwhile, has continued to purchase “thin modems,” thus diverging from the broad 

interest in SoCs. 

 Apple’s use 

of thin modems has presented opportunities to firms such as Intel, which otherwise might have 

languished in the aftermath of its failed attempt to move the AP market towards its proprietary 

x86 architecture. Nonetheless, a firm that focuses on thin modems at the expense of developing 

SoCs in order to become an Apple supplier might lose many other OEM customers, given the 

widespread demand for integrated solutions by most OEMs other than Apple. Intel made the 

strategic decision to focus on thin modems, and the implications of this decision are discussed 

further in Section V.C.2. 

134. Price: Price is also one of the determinants of OEMs’ choice of modem chip.275 Apple has 

recognized this in its interrogatory responses: “With respect to component supply, Apple 

generally looks for the highest quality suppliers and competitive pricing.”276 Other OEMs such 

as Samsung have also recognized the important role of price in their decision to select a modem 

chip.277

 

274 

 

ee also Dilger, Daniel Eran, “How Intel lost the mobile chip 

business to Apple’s Ax ARM Application Processors,” Apple Insider, January 19, 2015. See also Patterson, 

Alan, “Apple Talks About Sole Sourcing from TSMC,” EE Times, October 24, 2017. 

275 See, e.g., Efstathiou Deposition, BlackBerry, p. 137 (“Q. So was it your understanding that the strategic 

incentive would help Qualcomm win more business from BlackBerry? [...] A. I’m not sure it would help them 

win anything. I think it was a proposal. Q. How would BlackBerry evaluate the proposal? A. Total costs.”). 

276 Apple Inc.’s Supplemental Responses and Objections to Qualcomm Incorporated’s Second Set of 

Interrogatories (Nos. 26–53), p. 4. 

277 See, e.g., Kang Deposition, Samsung, February 28, p. 41 (“Q. I understand that. My question was just whether 

your goal in the initial selection, putting aside the goals that other people handled, was to obtain the best pricing 

and the best SCM. [... A.] Yes. That’s right.”) and p. 46 (“Q. And so is it fair to say that performance on the 

one hand and pricing and schedule on the other hand were the primary factors considered by Samsung in 

selecting chips for use in mobile devices? [... A.] As far as my understanding goes, those things would be 

major criteria for making a decision.”). 

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135. The importance that OEMs place on price is also evidenced by price competition among chip 

suppliers.278 The importance of price relative to other factors may vary by OEM and device. 

This observation is well established in the economics literature on differentiated products.279 

Particularly for OEMs that produce high-end mobile devices and target less price-sensitive 

consumers, quality and performance are usually weighted more than price when selecting a 

modem chip, whether they are considering SoCs or thin modems. 

 

 

 For OEMs producing devices targeting more cost-

 

278 See, e.g., Chhabra Deposition, Marvell, p. 151 (“Q. Earlier, when you were testifying about a price war 

involving Marvell, MediaTek, Qualcomm, and Spreadtrum, was that a price war in the mid to low tier of LTE 

chips? [...A.] I would say so.”).

279 In a differentiated product market, it can sometimes be more important for a firm to invest in the quality of its 

product than to reduce its costs. The benefits of selling a higher-quality product to high-willingness-to-pay 

consumers for a greater price may outweigh the steeper production costs. See, e.g., Shapiro, Carl and Hal R. 

Varian, Information Rules: A Strategic Guide to the Information Economy, Harvard Business School Press, 

1999, pp. 25–26 (“To succeed, you must either become the price and cost leader based on your scale, or you 

must create a unique information resource and charge for it based on the value that it offers to consumers. [...] 

Do everything you can to make sure there are no close competitors by differentiating your product from others 

that are available.”) and 38 (“If you set your price at $60 only the zealots will buy. If you set your price at $20, 

you will sell to lots of casual users but will pass up the potential profits from selling at a high price to the 

zealots. Which way should you go? Answer: It depends on how many customers of each type there are.”). 

280 

281

 

282 As discussed in Section III.E.1.b.ii, for example, a price-negotiation strategy reportedly was one of Apple’s 

motivations to source modem chips for the iPhone 7 from Intel as well as Qualcomm. Apple took this decision 

despite the compromise in speed associated with the Intel modems. See, e.g., Kelly, Gordon, “Apple’s New 

iPhones Will Change Essential Component,” Forbes, February 4, 2018 (“While iPhones have used a mixture of 

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sensitive consumers or intended for sale in emerging markets, meanwhile, price can be 

expected to carry more weight in the choice of modem chip.283

ii. Supplier characteristics 

136. In addition to the characteristics of the modem chips themselves, OEMs may value 

characteristics of modem chip suppliers. Relevant characteristics include the suppliers’ ability 

to accommodate customer requirements, their reliability, and their perceived neutrality. 

137. Accommodation of particular OEM requirements: Modem chip suppliers compete on their 

ability to cater to OEMs’ particular requirements. In some cases, this means customizing chips 

and software in response to an OEM’s request to accommodate particular requirements. As 

follows from industrial organization principles, high customization is more likely to be 

observed at the leading edge of the industry. 

 In cases where an OEM has unusual or particular 

requirements, a chip supplier’s success with the OEM will depend in part on the ability of the 

chip supplier to accommodate those requirements quickly and successfully. 

138. Modem chip suppliers may also compete in the way they help OEMs to design mobile devices 

around their modem chips. For example, some chip suppliers provide “reference designs” to 

facilitate use of their chips by OEMs. Reference designs are instructions for building a basic 

mobile device. Suppliers such as MediaTek have created and distributed their own phone 

designs along with their chips.285 These are helpful for smaller mobile device OEMs that do 

not have the resources to design their own phones, as they reduce development time.286 

 Intel and Qualcomm chips for the last two generations, tests have consistently shown that Qualcomm-based 

iPhones deliver fast, more consistent 3G and 4G performance.”).

283 See, e.g., discussion in Section III.E.1.a. 

284 See discussion in Section V.B for further details. 

285 Goldberg, Jonathan, “The MediaTek Phenomenon: The New Smartphone Disruption,” SlashData, May 8, 2013 

(“So Mediatek took all that software work and bundled it into a complete package which they called a reference 

design for mobile phones. These reference designs were essentially blueprints for building a basic, 2G feature 

phone. Anyone with a 10-engineer team could buy a Mediatek chip and this would come with everything they 

needed to build a phone.”). 

286 Tilley, Arron, “MediaTek’s Plan to Take on Qualcomm in the Cut-Throat World of Mobile,” Forbes, June 3, 

2015 (“MediaTek’s talent lies in getting smartphone makers up and running, fast. It provides reference designsblueprints that new manufacturers can follow quickly to put together their own phones.”). 

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Qualcomm also distributes reference designs. Its reference design program, originally focused 

on smartphone markets in China, has expanded globally and across phone tiers.287

139. Reliability: The importance of supplier reliability is well established in the literature on supply 

chain management.288 Supply shortages sometimes affect modem chip suppliers’ ability to 

meet device OEMs’ demand.289 This, in turn, hampers OEMs’ launch timelines, production, 

and sales, which may affect OEMs’ competitive positioning in the industry.290 Naturally, 

OEMs prefer suppliers that can reliably meet order requests,291 and they may avoid modem 

chip suppliers and products with uncertain reliability.292 A significant interruption in supply 

of chips to an OEM may damage the supplier’s reputation, harming its ability to compete for 

the next opportunity. 293 Modem chip suppliers, including Qualcomm, therefore brand 

themselves as reputable companies and avoid measures that would make them look unreliable 

 

287 “A big year for the Qualcomm Reference Design program,” Qualcomm OnQ Blog, March 18, 2015 (“QRD has 

evolved from its original focus of helping to accelerate smartphone development destined for China, to being an 

important global program for the Chinese manufacturing ecosystem supporting devices, which are based upon 

Qualcomm SnapdragonTM processors by Qualcomm Technologies, around the world [...] Another important 

aspect of the QRD program expansion has been the reach across device tiers. What started with an emphasis on 

the high-volume tier has evolved to include high tier Snapdragon processors.”). 

288 For a discussion of the importance of information about supplier reliability (i.e., the importance of supplier 

reputation), see, e.g., Yang et al., “Supply Disruptions, Asymmetric Information, and a Backup Production 

Option,” Management Science, 55:2, 2009, pp. 192–209. 

289 See, e.g., “MediaTek Faces Chip Supply Constraints,” EE Times, August 8, 2016 (“MediaTek, Qualcomm’s 

largest rival in the smartphone silicon business, said it is unable to meet demand for 3G and 4G smartphone 

products because it underestimated the supply of chips it would need from its foundry partners.”). 

290 See, e.g., Efstathiou Deposition, BlackBerry, p. 141 (“Q. What effect would it have on BlackBerry’s business if 

a component supplier stopped shipping a component to BlackBerry? A. Missed revenue. Time to redesign.”) 

291 See, e.g., Chopra, Sunil and ManMohan S. Sodhi, “Managing Risk to Avoid Supply-Chain Breakdown,” MIT 

Sloan Management Review, Volume 46, Issue #1, Fall 2004, p. 53 (“Supply chain problems [...] can seriously 

disrupt or delay material, information and cash flows, any of which can damage sales, increase costs – or 

both.”). 

292 

293 In a survey of 265 employees from 64 countries and 16 SIC (Standard Industrial Classification) industry 

sectors, 31 percent of respondents reported that supply chain disruptions resulted in damages to brand 

reputation/image. See “Supply Chain Resilience Report 2017”, Business Continuity Institute, 2017, p. 19. 

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to OEMs.294,295 The incentives to be reliable and ensure a constant supply to OEMs are 

particularly important for non-vertically-integrated modem chip suppliers that rely on spot 

contracts or relational contracting and would suffer most from jeopardizing business 

relationships. 

140. Neutrality: As noted above, several OEMs, including Samsung and Huawei, have chosen to 

be vertically integrated with chip suppliers. 

141. OEMs that lack an integrated modem chip supplier may sometimes be wary of relying on their 

competitors’ captive modem chip businesses due to concerns that the captive modem chip 

business might favor or prioritize its OEM parent’s business.296 As a result, some OEMs, such 

as Motorola, separated their semiconductor divisions into a separate business to avoid the 

appearance of conflicts.297 However, device OEMs were reportedly still skeptical in some 

cases of independent chip divisions that were previously affiliated with competitors. For 

instance, Freescale struggled to expand its customer base beyond its parent, Motorola, in part 

because of Motorola’s ongoing influence.298 OEMs that are reluctant to source their modem 

 

294 See, e.g., “Energy & Infrastructure Qualcomm,” Supply Chain World Magazine, April 19, 2016 (“The success 

of the company’s supply chain operations is rooted in what [Mark] Utter [Senior Director of Supply Chain, 

Qualcomm] describes as the company’s six core objectives [...] proactive, fast, flexible, scalable, reliable and 

cost-effective in everything it does.”). 

295 Qualcomm, for example, continues to sell chips to purchasers with which there are licensing disputes, to avoid 

being unreliable to its customers. See, e.g., Deposition of David Wise, SVP Finance and Treasurer of QCT at 

Qualcomm, February 8–9, 2018, p. 206 (“Wise Deposition, Qualcomm”) (“A. [...E]veryone else has licensing 

agreements in place and if we have disputes in licensing agreements, we don’t withhold chip sales.”). 

296 See, e.g., Exhibit QX505, Kalkman Deposition, Samsung LSI, February 14, 2018, p. 2

 See also 

Deposition of Todd Madderom, Director of Procurement at Motorola Mobility, March 16, 2018, p. 93–94 

(“Madderom Deposition, Motorola”)

297 Rose, Barbara, “Freescale Must First Fly Free,” Chicago Tribune, July 11, 2004 (“Freescale’s SEC filing states 

that the 51-year-old business will have better visibility and more opportunities to grow as a stand-alone 

company. For instance, some existing or targeted customers are reluctant to place big orders with a division of a 

large competitor. ‘We intend to free ourselves of this perceived conflict,’ the filing states.”). 

298 Faulkner, Bob, “Freescale Fantasy,” LightReading, October 8, 2008 (“Having one dominant customer, as 

Freescale had with Motorola, makes attracting new customers quite difficult. The first hurdle is obvious: 

Freescale is going to direct most of its attention to its biggest customer. The second is less obvious but just as 

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chips from presently or formerly captive modem chip suppliers that are or were vertically 

integrated with rival OEMs artificially limit the number of suppliers that can compete on price 

and quality for their business. 

142. In summary, my analysis of the relevance of the characteristics of modem chips and their 

suppliers on the demand for modem chips suggests that an OEM with specific requirements of 

modem chip (or supplier) features will only consider purchasing modem chips from suppliers 

whose products meet these requirements. 

 Because the number of suppliers whose 

modem chips meet all of an OEM’s specific requirements is limited, such an OEM may pay a 

higher price for the modem chips it purchases. 

2. Factors affecting supply of modem chips 

143. Entering and staying competitive in the modem chip industry is a challenging endeavor. 

Becoming a viable competitor requires the ability to fulfil the demands of OEMs outlined in 

the previous section. From the modem chip supplier’s perspective, the factors that affect the 

ability to be successful – i.e., to have its chips demanded by OEMs – can be grouped into three 

areas: foresight (or alignment with demand), investment, and execution. These factors are 

described in more detail below, but in short they reflect: (i) the foresight, or good fortune, to 

have invested in technologies and standards that are demanded by network carriers and OEMs; 

(ii) the need to invest efficiently in R&D to overcome the technical challenges inherent in 

designing modem chips; and (iii) the ability to design and deliver modem chips that OEMs 

prefer over competitors’ chips, whether because of their innovativeness, cost-effectiveness, or 

features. 

a. Foresight / Alignment with demand 

144. Modem chips are highly technical products requiring precise engineering, and the pace of 

innovation in the industry has been rapid. R&D therefore plays a crucial role in shaping the 

trajectories of modem chip suppliers. Not only does R&D require large investments (discussed 

in further detail below), it also requires significant lead time. Together, the rapid evolution of 

 important: Motorola can influence the direction of Freescale’s development activities to what is best for it – and 

that may not be best for the merchant market in general.”). 

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the industry and the lead time required to develop and commercialize new modem chip 

technologies mean that firms often must choose where to direct or prioritize R&D investments 

before it is known what technologies will be demanded by OEMs and carriers.299

145. A modem chip supplier therefore stands to benefit from good foresight about which modem 

chip technologies will take off and will be demanded in the future. In a sense, the firm is like 

a hockey player trying to pass the puck not to where a fast-skating teammate (i.e., demand) 

currently is, but to where the teammate is heading. Unlike the hockey player, however, the 

firm must decide the direction of its R&D years in advance. For example, Qualcomm began 

investing in CDMA in 1989, four years before the first CDMA-based standard, IS-95, was 

formally recognized and the first CDMA devices shipped.300 

146. An example of the importance of anticipating demand is the competition between EV-DO 

(Evolution-Data Optimized) and EV-DV (Evolution-Data and Voice).

301 In the early 2000s, 

these two technologies emerged as competing solutions for transmitting data wirelessly on 

CDMA-based networks. Both chip suppliers and carriers strategized over which technology 

to adopt, with important competitive implications: 

TI and Nokia [...] have focused much of their R&D partnership on EV-DV chipsets. 

Nokia has enthusiastically promoted EV-DV as far superior in capacity and 

performance to the data-only variant. But EV-DO is gaining ground on the basis of 

being available now, as operators face increasingly urgent demands from users to 

deliver high performance mobile data services in the near term [...]. The doubts over 

EV-DV really emerged last summer when Sprint, which had previously committed 

 

299 See, e.g., Cabral, Luís M.B., Introduction to Industrial Organization, Cambridge, MA: MIT Press, 2000, p. 299 

(“Very often, choosing an R&D strategy is choosing not just how much to invest but also how to invest. 

Specifically, firms must consider the strategic choice of risk of their R&D strategies. The trade-offs involved in 

the choice of risk are typically the following: A low-risk strategy is one that implies a low-value innovation 

with a high probability, whereas a high-risk strategy is one that implies a high-value innovation with a low 

probability.”). 

300 See Section V.B.1 for details on Qualcomm’s role in developing the CDMA standard. 

301 See, e.g., “EV-DO Definition,” GSMArena (“A 3G technology add-on for CDMA networks that allows for 

theoretical download speeds as fast as 2.4 Mbps, though actual rates tend to be far slower. There are two major 

versions: Release 0 and Revision A.”) and “EV-DV Definition,” GSMArena (“EV-DV is part of the same 

family of CDMA connectivity as EV-DO. Unlike EV-DO, however, EV-DV also supports voice calls. EV-DV 

is essentially a combination of EV-DO and 1xRTT.”). 

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itself to leapfrogging EV-DO and moving straight to the more advanced standard, 

decided instead to upgrade to EV-DO rather than delay its 3G roll-out.302

Modem chip suppliers who lagged in EV-DO therefore faced a disadvantage with the CDMAbased carriers that adopted it.303

147. Even if a firm’s innovations are technically successful, commercial success is not guaranteed. 

Commercial success depends on the widespread adoption of the new technology by consumers 

and carriers.304 For example, Broadcom invested in EDGE, a “2.5G” technology, at the 

expense of what became the 3G and 4G standards necessary to transmit data for smartphones, 

and therefore lost out as the industry shifted towards smartphones and 3G technology.305 By 

contrast, Qualcomm initially developed and supported the UMB technology, but was able to 

 

302 White, Peter, “EV-DV could be stillborn, but GSM integration and VoIP will keep CDMA strong,” Wireless 

Watch, September 30, 2004, available at https://rethinkresearch.biz/articles/ev-dv-could-be-stillborn-but-gsmintegration-and-voip-will-keep-cdma-strong/. 

303 The EV-DO/EV-DV decision did not affect U.S. carriers such as AT&T and T-Mobile, which used 2G GSM 

and then adopted WCDMA (and the WCDMA advancement HSPA) for 3G; nor did it affect non-CDMA 

carriers abroad. See, e.g., Kellen, “Cheat Sheet: US Wireless Carrier Bands for Unlocked Phones,” Droid Life, 

February 5, 2015. 

304 For a discussion of the challenges firms face in making technology and R&D choices, see, e.g., Schilling, 

Melissa A., “Technology Success and Failure in Winner-Take-All Markets: The Impact of Learning 

Orientation, Timing, and Network Externalities,” Academy of Management Journal, 45:2, 2002, p. 387 (“Once 

a dominant design has been selected by the market, firms offering technologies that are incompatible with the 

dominant design may be forced to switch to it. In industries in which a dominant design has not yet emerged, 

firms face critical choices about how and when to deploy their technologies. Firms that liberally diffuse their 

technologies or base their new technologies on previously existing standards may gain more rapid adoption, 

thus improving their chances of survival. However, by doing so, they may give up much of the appropriability 

of their technology and have little control over its future evolution. Timing is also important; rather than simply 

emphasizing speed to market, firms must time entries in accordance with the evolution of complementary 

technologies and customer requirements.”). 

305 Deposition of Robert A. Rango, former Executive VP & GM, Mobile and Wireless Group and Wireless 

Connectivity Group and former VP and GM, Networking Infrastructure Group at Broadcom, February 13, 2018 

(“Rango Deposition, Broadcom”), p. 94 (“Q. The next bullet says (as read): ‘2G EDGE, our biggest R & D 

investment, will have lower ROI due to smartphone popularity.’ [...] A. Up until this point, Broadcom’s 

biggest investment in basebands was in 2G and 2.5G, and the bullet was intended to say that, hey, feature 

phones are giving up share to smartphones, and therefore our investment in 2 and 2.5G would be damaged, 

would be harmed by it.”). See also Rango Deposition, pp. 128–129 (“Q. In the next bullet in your email, you 

say, quote (as read): ‘We invested in EDGE when we should have invested in 3G (mistake made four years 

ago. We are going to pay for this in 2012, ’13).’ [...] Q. And EDGE refers to that -- that GSM 2.5G standard 

that we discussed earlier; is that right? A. Correct. [...] Q. Could you explain why this was a mistake? A. Well, 

other than what I wrote here, I think it’s -- the pre- -- prior management, when it was a separate team, under 

MPG, had made a decision to invest in 2G EDGE instead of smartphone technology. And so I was referring 

mainly here to the fact that, in hindsight, that decision looks like the wrong one.”). 

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re-calibrate its development and focus on LTE when UMB failed to be adopted by carriers.306 

As another example, Samsung’s failure to anticipate the demand for SoCs decreased its 

competitiveness as a modem chip supplier, as explained in more details in Section V.C.4. 

148. As discussed above, some OEMs demand innovative modem chip technologies, and as a 

consequence, there may be rewards to firms that are the first to offer demanded new 

technologies. Foresight is important in this technology race: to win, it helps to run in the right 

direction. Racing for first-mover advantages in innovative technologies, however, is not the 

only successful strategy in the modem chip industry. OEMs do not always require modem 

chips that are cutting-edge in all respects. Indeed, OEMs that produce mobile devices for 

emerging markets may place more weight on other factors, such as price and the provision of 

reference designs.307,308,309 This provides opportunities for chip suppliers to compete in the 

industry even without the foresight to develop new technologies, although even these suppliers 

will need to foresee demand for technologies that are not on the leading edge. Examples of 

 

306 See, e.g., Fleishman, Glenn. “Qualcomm Cancels Its Own 4G System.” Ars Technica, 13 November 2008 

(“Ultramobile broadband (UMB) is ultra dead. [...] Qualcomm said they would stop work on its fourthgeneration (4G) network technology UMB, and shift efforts to the GSM-based Long-Term Evolution (LTE) 

standard. [...] This was not unexpected [...] as no major carrier had committed to UMB. Qualcomm ̓s U.S. 

stalwarts, Verizon Wireless and Sprint Nextel, had chosen LTE and WiMax, respectively, for their 4G 

networks.”). 

307 See, e.g.,, Dalberg Advisors, “Accelerating Affordable Smartphone Ownership in Emerging Markets,” GSMA, 

July 2017, p. 3 (“Consumer research shows how the cost of an internet enabled handset is a critical barrier to 

using mobile internet for low and middle income consumers in emerging markets. [...] On the supply side, the 

manufacturing costs of the device itself are largely dictated by prices of key components including: the screen, 

chipset, memory and battery....”). 

308 Recognizing the price sensitivity of OEMs catering to emerging markets, TI went so far as to name one of its 

chips the “LoCosto.” See, e.g., Andrejczak, Matt, “TI unveils next chip for ultra low-cost phones,” 

MarketWatch, February 12, 2007 (“Texas Instruments Inc unveiled its second microchip for ultra low-cost 

phones Monday in a bid to cash in on growth in emerging phone markets. ... TI’s LoCosto chip is designed for 

phones that sell for around $30 to $50 in emerging markets, such as China, India, Brazil and Russia. The chip 

sells for around $10 to $15, analysts estimate. [...] In the future, manufacturers aim to sell phones for around 

$20 in an attempt to tap underserved phone markets. TI said its newest LoCosto offering may help phone 

makers reach the goal of reducing a phone’s retail cost by cutting design costs.”). 

309 See, e.g., Goldberg, Jonathan, “The Mediatek Phenomenon: the New Smartphone Disruption,” SlashData, May 

8, 2013 (“Mediatek grew up in [...] the consumer electronics supply chain in Taiwan and China. [...] They 

recognized that their traditional customers had very limited engineering talent. [...] None of these companies 

had the ability to design cellular phone software or build pretty user interfaces. [...] So Mediatek took all that 

software work and bundled it into a complete package which they called a reference design for mobile 

phones.”). 

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chip suppliers exploiting these opportunities include MediaTek, VIA Telecom (acquired by 

Intel in 2015), and Spreadtrum.310

b. Investment 

149. Modem chip suppliers face a rapidly evolving technological environment, a heterogeneous 

demand characterized by OEMs with diverse requirements, and intense competition with other 

firms. Therefore, strategic decisions on R&D investments are key to the success of a modem 

chip supplier. 

150. I review several factors relevant to the investment patterns in the modem chip industry. First, 

firms differ in the strategy and scope of their investments. Some suppliers choose to push the 

technological forefront of the industry, some focus on reducing production costs of existing 

technologies, while others invest in expanding the scope of the products they offer to OEMs. 

The intensity of R&D investments will therefore differ across firms in the modem chip industry, 

and firms’ R&D efficiency is an important factor in their success. Finally, the nature of the 

innovative process in modem chip technology affects modem chip suppliers’ investment 

decisions. 

i. Investment strategies 

151. As mentioned above, different modem chip suppliers adopt different strategies for their 

position in the industry and thus for their R&D investments. The suppliers that choose to push 

the technological forefront of the industry are referred to as “technological leaders.” Other 

suppliers, often referred to as “fast followers,” choose to rely on existing technologies. The 

strategic decision to be a technological leader or a fast follower depends to a large extent on a 

supplier’s perception and expectation of the tradeoffs between bearing substantial up-front 

costs and potentially gaining large returns in the future, versus investing less up front, avoiding 

the risk of introducing new technologies, and obtaining lower marginal returns on future 

sales.311 Suppliers adopting either of the two strategies can and do participate in the standard-

 

310 See Section V.C for additional details. 

311 As mentioned in Section III.E.1, the costs of imitating an existing technology are significantly lower than the 

costs of innovating. See, e.g., Mansfield, Edwin, “R&D and Innovation: Some Empirical Findings,” in Zvi 

Griliches, ed., R&D, Patents, and Productivity, University of Chicago Press, 1984, p. 142 (“In our sample, 

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development process, without necessarily designing state-of-the-art modem chips, as not all 

firms that participate in standards development are involved in producing technologically 

innovative products. 

152. Technological leaders, who advance the technological frontier or leading edge of the industry, 

invest heavily in R&D, bear the risks associated with such investments, and collect the rewards 

associated with being the first to market. As discussed in Section III.E.1.a, being first to market 

in this industry has several advantages including higher margins and greater profitability. In 

addition, technological leaders also gain prestige and familiarity with customers that they can 

use to maintain their leadership across multiple products and over time. However, these 

benefits are accompanied by greater risks to failure following this strategy: being later-thanexpected to market, missing critical features, or failing to attract OEM customers can cause 

leading-edge firms to achieve none of the benefits of leadership while incurring all of the 

higher R&D costs. These unsuccessful leaders then lose business to both technological leaders 

who executed successfully (see Section III.E.2.c below) and fast followers, who, having 

foregone high levels of R&D, can charge lower prices. For technological leaders, then, 

efficiently allocating large resources to technological exploration is key for succeeding. 

153. Fast followers, by contrast, who are typically on the trailing edge of the industry, spend less 

on R&D, as they can learn from the successes and failures of technological leaders and can 

focus more on lowering production cost and achieving large production volumes. The fastfollower strategy also has advantages and disadvantages for modem chip suppliers. On the 

one hand, this strategy allows firms to overcome potential barriers to entry, including high 

R&D costs. On the other hand, when a fast follower introduces a modem chip, its entry 

expands the supply of that type of older modem chip, while demand for such older modem 

chips has naturally declined by then, as newer modems are released. Therefore, fast followers 

 imitation cost averages about 65 percent of innovation cost, and imitation time averages 70 percent of 

innovation time.”). This has also been documented in particular in the semiconductor industry. See, e.g., 

Kumar, Rakesh, Fabless Semiconductor Implementation, McGraw Hill, 2008, pp. 16–17 (“The cost of process 

R&D escalates exponentially if you are the first developer of a new technology node [...]. Costs can be 

significantly lower if one chooses to be a ‘follower’ and be a year or more behind implementing new 

technologies.”). 

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experience lower average prices and gross margins compared to technological leaders who are 

first to market.312 

154. Further, some suppliers who initially started at the trailing edge may attempt to design stateof-the-art modem chips move to the leading edge. For example, Intel acquired the fast follower 

Infineon in 2010 and invested heavily to produce a leading-edge modem chip. In 2016, Intel 

had completed its transition to technological leader by winning a contract with Apple and 

providing modem chips for the iPhone. Similarly, MediaTek initially launched as a trailingedge supplier of low-cost chips for emerging markets, but it has recently attempted to become 

a technological leader by launching a leading-edge modem chip, the Helios X30. 

155. There are many potential targets for chip supplier R&D investments. For example, suppliers 

can invest in implementing wireless standards, implementing new categories within those 

standards, improving performance (such as decreasing call drops or improving battery life), 

integrating other features (particularly with SoC modem chips), or reducing the size of their 

chips. Suppliers also can and do invest by acquiring companies that have begun R&D into a 

standard or technology feature, and combining these features with their own internal R&D 

efforts.313 

156. Chip suppliers can invest in wireless standards by developing cellular technologies, working 

with other firms to facilitate complementary upstream and downstream technologies, and 

 

312 As shown in Exhibit QX0120,

313 See case studies in Section V. 

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taking part in SDOs. While investing in the development of standards entails some risk, as it 

requires resources without necessarily yielding a saleable product, these investments can 

benefit a firm by giving it knowledge and understanding of the underlying technologies. This, 

in turn, can help the chip supplier to be first to commercialize chips using state-of-the-art 

technology and therefore to reap first-mover advantages – particularly if the standard in which 

the chip supplier invested is adopted widely.314 

157. Although some firms participate in the standard-development process by investing in R&D for 

new technologies, other firms have decided to learn about the standard-development process 

without producing new products.315 Therefore, large R&D investments are not necessary for 

a modem chip supplier to contribute to the standard-development process. More generally, 

though, while involvement in the standard-development process can benefit a chip supplier, it 

is not necessary in order to build a competitive chip.316

158. Another strategic investment decision that modem chip suppliers face involves the bundle of 

inputs that they produce and sell to OEMs. Along this dimension, suppliers can be divided 

into “pure-play” and “broadliners.”317 Pure-play suppliers provide one input and therefore 

their R&D investments can be lower, as they will involve maintaining the innovation 

 

314 Qualcomm, for example, single-handedly developed the CDMA standard based on significant R&D 

investments. This enabled Qualcomm to also lead the commercialization of the technology and manufacturing 

of CDMA modem chips. See Section V.B.1 for additional details.

315 

 Intel’s Asha Keddy remarked that there are different ways for a supplier to 

contribute to a standard. See Deposition of Asha Keddy, General Manager of Next Generation and Standards at 

Intel, March 7, 2018, pp. 221–222 (“Keddy Deposition, Intel”) (“[...] companies that contribute a lot [...] 

whether they’re contributing directly or indirectly involved, may have patents that are a part of it. [...I]f Intel is 

chairing or Intel proposals get adopted, there is a notion that Intel is a leader [...a]nd then when you have 

products and all, there is an implicit understanding that the products implementation understands what’s going 

on.”). 

316 Achour Deposition, Qualcomm, pp. 240–241 (“Q. And so my question is, is involvement with standard setting 

something a modem supplier also needs to engage in to develop a modem as good as Qualcomm’s? A. 

Absolutely not. Actually, I don’t know [sic] for a fact. You don’t need -- because the same specs we work from 

are available to everybody, they’re public domain. You can go to 3GPP website, you can download all the 

specs you want. You don’t have to send anybody to the standards, it’s available to everybody. It’s public -- 

these are public documents.”). 

317 

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leadership for that single input. Broadliners, instead, must spend more on R&D overall, as 

they compete by developing and selling multiple mobile device inputs, such as APs or chips 

for non-modem connectivity (such as Wi-Fi or Bluetooth). In this sense, suppliers compete 

not only by providing better products, but also by deciding which products to supply. 

Therefore, competition among broadliners may result in a supplier exiting a particular segment 

of the semiconductor industry to allocate resources to other, more profitable, segments, in 

which the supplier enjoys a comparative advantage. For example, as discussed in Section 

V.C.13, Nvidia has earned record revenues since it exited the modem chip industry, driven by 

its leadership in GPU technology. Exhibit III.D.5 indicates that many modem chip suppliers 

were active in the supply of other mobile device components in 2010. For example, Qualcomm 

is a broadliner, selling not only modem chips, but also licensing standard-essential patented 

technology and integrating its modem chips with an AP and many other features (e.g., Wi-Fi 

and Bluetooth connectivity, and GPS) in its SoCs. Likewise, Broadcom is a broadliner because 

it supplies Wi-Fi chips and other components for mobile devices and supplied modem chips 

until its exit from the modem chip industry. 

.

318 Suppliers can also choose to pursue different strategies in 

different periods, and therefore, can switch categories over time. 

ii. R&D intensity and efficiency 

159. Persistent technological advances in chip design and the demand for innovative modem chips 

make investment in R&D an important driver of success for those chip suppliers whose 

strategy is to lead the industry in technological innovation. R&D in the modem chip industry 

 

 

 

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is both expensive and time-consuming, making it one of the major hurdles to entry and 

sustained competitiveness at the technological forefront of the industry. 

160. The R&D investment required to be a competitive player at the innovative edge of the modem 

chip industry is substantial. Qualcomm’s total R&D spending was $5.5 billion in 2017, 

representing 25 percent of total revenue,320 and its total R&D spending from 2000 to 2017 was 

$47.4 billion, representing on average 21 percent of total revenue.321 

 

161. Other modem chip suppliers have also invested large amounts in developing modem chips. 

 

162. Exhibit III.E.1 shows modem chip-related R&D spending for Qualcomm and other chip 

suppliers from 2005 to 2017. Because information on modem chip-related R&D is not readily 

 

320 Qualcomm invested $5.5 billion in R&D in FY 2017, with associated revenue of $22.3 billion. See Exhibits 

III.E.2 and III.E.3. 

321 See Exhibit III.E.3 and associated backup. 

322 Deposition of Serge Willenegger, Senior Vice President of Product Management at Qualcomm, February 9, 

2018, pp. 127–128 (“Willenegger Deposition, Qualcomm”)

 See also note in QNDCAL03634914. 

323 See “Case COMP/AT.39.711, Annex 7.1,” Qualcomm, QNDCAL03634914 (R&D by Business Unit/Division, 

Labour and Non-Labour Costs, in Million USD). See also Q2014FTC04141507 for the 2017 calculations. The 

2017 calculations use actual R&D spending and revenue for Q1 2017 through Q3 2017, and projected R&D 

spending and revenue (as of July 2017) for Q4, because the actual numbers were not available for that quarter. 

324 BAIN00070744, Bain presentation to Intel titled “Mobile R&D Benchmarking”, pp. 14–16. 

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available for all firms for which modem chip supply is only one part of their overall business, 

Exhibit III.E.2 shows modem chip suppliers’ firm-wide R&D and indicates that firm-wide 

R&D may greatly exceed chip-specific R&D. For example, by this metric, Intel, Samsung, 

and Huawei have spent considerable amounts on overall R&D, suggesting that they had the 

means to allocate to chip-related R&D if they decided to do so. Exhibit III.E.3 shows that 

most modem chip suppliers’ R&D spending typically represents a large portion of their 

revenue, ranging between 10 and 30 percent of total revenue. 

163. Given the range of overall R&D spending, it is important to note that the amount of actual 

R&D expenditure on modem chips is not necessarily an indicator of a modem chip supplier’s 

ability to invest. In fact, the realized R&D spending is the result of a modem chip supplier’s 

strategic decisions, which does not necessarily reflect its access to funds. In order to gauge a 

modem chip supplier’s actual ability to invest in R&D, one would have to consider other 

factors such as the supplier’s profitability, cash flows, and access to capital markets. 

164. While the R&D investments necessary to remain at the leading edge of the industry are large, 

the gains from success are also potentially substantial. Consequently, numerous companies 

have made the required investments and continue to make the investments needed to develop 

new products. For example, Huawei has continued to invest in HiSilicon, its modem chip 

supplier subsidiary, even after its initial investments yielded products with technical 

shortcomings.325 Similarly, Xiaomi recently invested substantial resources to enter the modem 

chip design industry, following the example of other smartphone manufacturers.326

165. Modem chip suppliers also compete and differ in their R&D efficiency. The Bain presentation 

cited above emphasizes this point and notes that 

 

325 See, e.g., “Digitimes Research: Hisilicon AP to Give Huawei Cost Advantage in High-end Mobile Device 

Market,”, DigiTimes, July 9, 2014 (“Hisilicon, an affiliate of Huawei, has been developing application 

processors for many years. The company’s early products had issues that caused resulted [sic] in poor power 

consumption-performance ratio. But Huawei’s strategic support and continuous R&D resource investments 

have helped improve Hisilicon’s products.”) 

326 See, e.g., “Xiaomi Reveals 64-bit Surge S1 Chipset, Its First-ever SoC,” Android Authority, February 28, 2017 

(“Xiaomi has become the fourth smartphone manufacturer in the world to build its own chips after Samsung, 

Apple and Huawei - currently the three largest global OEMs. This is a big step for the Chinese manufacturer 

and will have been a huge investment in resources for R&D, production, infrastructure etc. [...] Here are some 

of the Surge S1’s finer details as outlined by Xiaomi: [... :] Upgradeable baseband; programmable modem[.]”). 

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, as I discuss further in Section V.C.2.327 

This suggests that while the amount spent on R&D is a relevant indicator of the intensity of 

R&D, the efficiency of R&D is also important for success in modem chip supply. 

166. Modem chip suppliers can increase their R&D efficiency by, for example, transferring 

successful R&D investments in the development of one particular chip to other models. 

Therefore, as I described above in Section III.C.2.b, chip suppliers such as Qualcomm that 

design a larger number of different types of chips can allocate R&D spending more efficiently 

by recycling IP “cores” or “blocks” from chip to chip.328 This exemplifies a process common 

to industries characterized by large R&D investments and widely studied in the industrial 

organization literature. Because R&D will typically increase less than proportionately with 

the number of different chips produced, it is typically considered a fixed or sunk cost, and as 

such it leads to economies of scale.329 Incremental updates of a modem chip model require 

less R&D than coming up with the initial design. 

 

327 

328 Achour Deposition, Qualcomm, pp. 114–115

329 See, e.g., Armstrong, M., and R. Porter, Handbook of Industrial Organization, 2007, Vol. 3, Chap. 35, p. 2313 

(“[...] firms might choose to incur (additional) fixed and sunk costs [...] with a view to improving their 

competitive positions .... This kind of expenditure would include, for example, outlays on R&D designed to 

enhance the quality, or technical characteristics, of firms’ products ...; and it would include cost-reducing 

‘product innovation’ in which R&D efforts are directed towards the discovery of improved production 

methods.”). See also Hill, Charles W.L, et al., Strategic Management: Theory: An Integrated Approach, 11th

Ed., Stamford, CT: Cengage Learning, 2015, p. 119 (“One source of economies of scale is the ability to spread 

fixed costs over a large production volume.”). 

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167. The efficiency of R&D spending is also affected by the speed with which a modem chip 

supplier can make its innovations available to OEMs. Modem chips are a complex technology, 

and this complexity creates challenges that take time to overcome. As a result, it is not 

uncommon for modem chip designers – especially those without the requisite experience – to 

face long delays in bringing new products to market.330 On some occasions, these delays can 

jeopardize large R&D investments, suggesting that devoting substantial resources to the 

development of new products is not sufficient on its own to secure a large yield. MediaTek, 

for example, designed the Helio X30 to compete at the technological forefront,331 but delays 

in bringing the chip to market complicated its release and resulted in low adoption by OEMs.332

168. Some modem chip suppliers have sought to speed up the development process using shortcuts 

to experience by leveraging in-house engineers who have experience with related technologies 

and/or acquiring a company that already has experience making an element of a potential 

integrated product. Intel, for example, has pursued both of these approaches. In 2010, it 

bought Infineon in order to create an integrated chip by combining Infineon’s modem chips 

with its own Atom APs, drawing on its experience with PC processors.333 Intel’s experience, 

however, illustrates the importance of experience specific to the product under design: coming 

from a PC background, Intel’s in-house engineers did not have experience with low-power 

 

330 See Section V.C for additional details. For example, Nvidia faced considerable challenges when it tried to 

combine its own standalone AP (Tegra) with baseband modems designed by Icera after acquiring Icera in 2011. 

See, e.g., Exhibit Talla 2, Deposition of Deepu Talla, Vice President and General Manager at Nvidia, March 3, 

2018, NVIDIA-00609189 (“Talla Deposition, Nvidia”) (“Concerns were raised that we need to deal with that 

integrating a modem will cause the chips to not be able to make production schedules because of carrier 

qualification.”). It took Nvidia three years to succeed in this effort. (Nvidia acquired Icera in 2011, but was 

able to release its first integrated modem chip (Tegra 4i) only in 2014. See Section V.C.13.a for more details). 

In another example, NXP faced delays of more than a year in bringing its first WCDMA baseband modem to 

market (see Section V.C.6.a for details on NXP ̓s delays). 

331 “MediaTek Sees Only Limited Use of Its New Advanced Chip in 2017,” Nikkei Asian Review, February 28, 

2017 (“The Helio X30 chip [...]was first viewed as a secret weapon that MediaTek could use to close the gap 

with its biggest rival Qualcomm of the U.S. in cutting-edge technology.”). 

332 “MediaTek Sees Only Limited Use of its New Advanced Chip in 2017,” Nikkei Asian Review, February 28, 

2017 (“ ̔We don’t expect many projects on our latest high-end chip, ̓ Mediatek Co-Chief Operating Officer 

Jeffrey Ju told reporters [...]  ̔For now, we think less than 10 smartphone models will adopt this high-end X30 

chip. ̓ [...] Besides having only a few customers for the high-end chip X30, Ju said progress in getting the chip 

out has been slower than expected and has been delayed about a couple of months because its contract 

chipmaker [...] ̔Our chip is a bit delayed because the yield rate of 10nm process technology [from TSMC] has 

not yet reached a satisfactory level ... and we are a bit stuck on that, ̓ said Ju.”). 

333 “Intel to buy Infineon’s wireless unit for $1.4 billion,” CNET, August 29, 2010.

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APs, and neither Intel’s nor Infineon’s engineers had experience integrating modems and APs 

designed around different process technologies.334 As a result, as I discuss further in Section 

V.C.2, Intel took over five years to develop an SoC.335 Ultimately, the chip was not successful 

and was discontinued, indicating that even large R&D investments do not guarantee 

commercial success if they are not efficiently directed towards products that meet customer 

requirements along dimensions such as power consumption and launch timing.336,337

iii. Nature of the innovative process 

169. Although much of the evolution in modem chip technology is continuous and incremental, 

some important progress occurs in discrete steps. The development and implementation of a 

new standard, for example, changes the modem chip industry in a discontinuous way. Other 

advances, such as the incorporation of multi-mode functionality, may also occur as major steps. 

Both Qualcomm ̓s invention of CDMA and its introduction of the first multi-mode LTE chip 

represented such steps. More recently, suppliers such as Intel, MediaTek, Qualcomm, and 

Samsung S-LSI have sought to bring the first 5G modem chips to market. 338 Discrete 

technological advances may create opportunities for firms to leapfrog into a position of 

technological leadership, replacing incumbent leaders.339 Indeed, the academic literature on 

 

334 See Section V.C.2 for additional details.

335 “Intel announces Atom X3 SoFIA, its new best hope for smartphone relevance,” PCWorld, March 2, 2016.

336 See Section V.C.2 for more details about Intel’s R&D investments. 

337 For example, 

ee Deposition of Martin Zander, Head of Strategic Initiatives and Ecosystems at STEricsson, April 19, 2018, pp. 56–57 (“Zander Deposition, ST-Ericsson”) 

338 See, e.g., Ukonaho, Ville-Petteri, “First 5G Smartphones to Arrive 2019 Says Qualcomm,” Strategy Analytics, 

April 7, 2017 (“Qualcomm was first to the market with 5G capable modem but other vendors are not standing 

still either. Intel announced their modem at CES 2017 and Mediatek announced the co-operation with Nokia in 

the development of the 5G modem at MWC 2017.”). See also Horwitz, Jeremy, “Samsung reportedly working 

on Exynos 5G modem to power its phones in 2019,” Venture Beat, January 17, 2018. 

339 See, e.g., Scherer, F.M., and David Ross, Industrial Market Structure and Economic Performance, Third 

Edition, Boston: Houghton Mifflin, 1990, p. 614 (“[M]ajor innovations often bring new firms to the fore and 

displace laggards.”). 

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the first-mover advantage recognizes that early entrants are less likely to maintain their leading 

edge over time in industries characterized by discrete technological improvements.340 Thus, 

while leading-edge firms may benefit from a body of technological knowledge and expertise 

built up through years of intensive R&D, this does not protect them from competition via 

technical innovation. BlackBerry, for example, was overtaken by devices that made better use 

of evolving cellular technology during the 2000s.341

170. Modem chip suppliers, as discussed above, have pushed hard to bring innovations to market. 

Meanwhile, some innovation has been driven by OEMs’ requests. OEMs provide their current 

and potential chip suppliers with information about the features that they and carriers demand, 

pushing suppliers to meet those targets. MediaTek, for instance, learned about supporting 

products for a broad geographical market from LG, 342 and about carrier requirements in 

particular countries from customers such as Alcatel, ZTE, Lenovo, Huawei, and Coolpad.343 

 

340 Kerin et al., for example, posit that first-mover advantage is less likely when technological change is swift and 

that “a first mover’s cost and differentiation advantages are greater under conditions of technological continuity 

(when technological change occurs along a fundamentally consistent path) than under conditions of 

technological discontinuity.” (Kerin, Roger A., et al., “First-Mover Advantage: A Synthesis, Conceptual 

Framework, and Research Propositions,” Journal of Marketing 56:4, 1992, p. 45.). 

341 See, e.g., McNish, Jacquie, and Sean Silcof, “The Inside Story of How the iPhone Crippled BlackBerry,” The 

Wall Street Journal, May 22, 2015. See also Savov, Vlad, “BlackBerry’s success led to its failure,” The Verge, 

September 30, 2016. 

342 See, e.g., Exhibit CX3553, Moynihan Deposition, MediaTek, p. 35 (“A. [...] You know, I would say LG is a 

good example who I – of a brand I think that’s helped us over the years in – how to say this – globalizing, so, 

you know, LG tends to think of a global portfolio. They’re a global brand. You know, they’re – you know, 

they’re going to develop a phone and launch it in many, many carriers in many, many markets 

simultaneously.”), pp. 89–91 (“Q. And with respect to the transition from 3G to 4G, who are the important 

teaching customers? A. We probably have – we probably have put them into two categories for us. Like LG, 

Sony and HTC would have been very important from sort of a global brand, global carrier perspective. 

343 MediaTek learned about U.S., European, and Latin American carrier requirements from Alcatel and ZTE; and 

and pp. 89–91 (“Q. And with respect to the transition from 3G to 4G, who are the important teaching 

customers? A. [...] And then for the early phases for our LTE, the other ones that would have been important 

were Alcatel and ZTE. 

. So again, both Alcatel 

and ZTE ship to them, so they would have been important targets. And we’d have had a few more for China, so 

for the deployment of LTE in China we might have relied on people like Lenovo, Huawei, for example, 

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Meanwhile, customers such as helped to drive MediaTek’s 

development of multimedia functionality.344 The pull to meet carrier and OEM demands and 

requirements comes from many different purchasers of modem chips. As John Moynihan of 

MediaTek recognizes, “[...] different customers play different roles for different aspects of 

that, but, you know, all important at the end of the day.”345

171. A modem chip supplier can learn from technical engagement with an OEM, moreover, even if 

ultimately it does not win the OEM’s business. 

.

346 Similarly, 

.

347 Intel also received OEM feedback that may have 

encouraged technical innovation.348

 Coolpad. A few customers would have been important for the early phase of LTE deployments in China, which 

were heavily driven by the carriers there as well.”). 

344 Exhibit CX3553, Moynihan Deposition, MediaTek, p. 35 (“[A.] And then I would think some of these other 

brands, like , have probably helped more with some of the higher-tier multimedia features. 

Again, as I mentioned, their devices tend to be higher tier in feature set, higher price maybe than some of the 

other customers. Therefore, they’re driving more advanced displays, more advanced cameras, more advanced 

user features, and so, you know, those are probably the customers that are pushing us on things like camera 

features, which is an important feature for a lot of these devices right now.”). 

345 Exhibit CX3553, Moynihan Deposition, MediaTek, p. 35. 

346 

347 

348 See Section V.C.2 for additional details. 

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c. Execution 

172. Ultimately, a supplier must develop a chip design that embodies technology and features 

demanded by OEMs and secure design wins from OEMs to sell those chips. To accomplish 

this successfully, a supplier must overcome any organizational challenges, including choosing 

the optimal level of integration, i.e., positioning itself on the organizational structure 

continuum, gaining relevant experience needed to develop new products, 349 obtaining 

sufficient and appropriate resources and production inputs,350 and establishing processes for 

an efficient transfer of knowledge within the firm and with customers.351 After applying 

foresight to accurately assess demand it is likely to face for its products, a modem chip supplier 

must acquire the necessary assets and develop products for its customers. For modem chip 

suppliers on the leading edge of the industry, the necessary assets must be specific to develop 

customized products based on specific customers’ requirements.352

 

349 See, e.g., Deposition of Matthew Grob, CTO and EVP at Qualcomm, January 29–30, 2018, p. 244 (“Grob 

Deposition, Qualcomm”) (“A. [...] We’ve been making these modems for decades and have a very large team, 

which is supported by many customers and many -- you know, many deployments, and a lot of experience 

comes from that.”). See also Achour Deposition, Qualcomm, pp. 205–206 (“Q. Does having a modem, having 

phones in the marketplace provide any additional validation beyond the validation provided by working with 

OEMs like Samsung? A. Oh, absolutely. [...] there’s a time aspect that goes into modem development, 

developing a quality modem. It goes beyond the smart people that applies to technology. Every company has 

smart people, no question. But the time it takes to learn from the field when you deploy millions of phones, and 

you learn, you know, the issues they’re seeing in the market, go fix them one at a time, and learn a few things, 

go tweak things, and keep reiterating, that process just takes time.”). 

350 See, e.g.,

351 See, e.g., Achour Deposition, Qualcomm, p. 173 

352 See, e.g., Achour Deposition, Qualcomm, pp. 138–139 

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173. A modem chip supplier must then successfully produce high-quality chips that perform well. 

Therefore, important execution-related factors for supplier success include timeliness, or the 

ability to commercialize and deliver modem chips in a timely manner, and manufacturing, or 

the ability to efficiently manufacture modem chips in a cost-effective way without sacrificing 

quality. 

i. Timeliness 

174. The ability to commercialize designs quickly is an important factor in supplier success. As 

discussed above, the first modem chip supplier to commercialize chips incorporating 

innovations desired or required by OEMs stands to capture a large share of demand and earns 

the peak gross margin available during the life cycle of a particular chip feature set (as prices 

naturally fall over time). Meanwhile, the inability to meet an OEM’s timelines may cost a chip 

supplier potential business. 353 Intel’s Senior Vice President and Chief Strategy Officer, 

Aichatou Evans, offered the analogy that “Christmas trees don’t sell after Christmas. So one 

of the big things in our industry is being able to meet the launch dates.”354 

.

355

 

353 

354 Evans Deposition, Intel, pp. 66–67; see also p. 242. 

355 

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175. Timeliness is important for the straightforward reason that OEMs developing a mobile device 

may rely on a particular supplier to produce the modem chips required for the product.356 

Failure of a modem chip supplier to meet deadlines may jeopardize its relationship with 

OEMs.357 

358 A modem chip supplier that struggles to meet timelines may incur significant 

reputational costs that will affect its ability to compete for future supply contracts.359

ii. Manufacturing 

176. Manufacturing modem chips is a difficult technical process subject to mistakes that are often 

not easy to detect.360 In addition to the general difficulty of producing well-functioning modem 

chips, suppliers may struggle to manufacture them in large enough quantities to meet the 

 

356 See, e.g., Schell Deposition, Apple, p. 11 (“Q. Why was it important for Apple to evaluate this track record of 

vendors in terms of meeting schedules and milestones? A. Apple does not release a lot of different products 

throughout the year. Apple tends to release relatively few products and wants each of those products to be as 

great as they can be and to be available to Apple users in a timely fashion. There are hundreds, maybe 

thousands of components that go into each Apple products and each one of those needs to be on an execution 

and delivery time line that meets the overall needs of the product schedule. So understanding a vendor’s or 

prospective vendor’s prior track record is one of many considerations in assessing our external partners, 

whether they are accustomed to, first of all, having aggressive schedules; second, being able to meet those 

aggressive schedules and having robust recovery processes in case things go awry.”). 

357 See, e.g., Marvell Technology Group Ltd., Form 10-K, for the fiscal year ended January 30, 2016 (“If we or any 

of our foundry subcontractors experience significant delays in this transition or fail to efficiently implement this 

transition, we could experience reduced manufacturing yields, delays in product deliveries and increased 

expenses, all of which could harm our relationships with our customers and our results of operations.”). 

358 

359 BlackBerry stopped sourcing from Marvell, for example, in part because Marvell had not been meeting 

BlackBerry’s timelines. See, e.g., Grubbs Deposition, BlackBerry, p. 110 (“Q. Why did BlackBerry stop 

purchasing baseband processors from Marvell? A. There were several reasons. We...were having some issues 

with deliveries from – commitments to timelines for deliveries from Marvell. They had slipped on several 

deadlines that they had promised to deliver things to us by.”).

360 See, e.g., Burkacky, Ondrej et al., “Reimagining Fabs: Advanced Analytics in Semiconductor Manufacturing,” 

McKinsey, March 2017 (“Each fab has thousands of process steps, which, in turn, have thousands of parameters 

that can be used in different combinations. With so many factors in play, we see a lot of chip failures or 

defects. But the frequency of each error tends to be very low, since the parameters are seldom aligned in 

exactly the same way during design and production. That makes it difficult for even the strongest engineering 

teams to predict where and when problems will occur.”). 

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demand of OEMs.361 This, in turn, can negatively affect the supplier’s reliability, a key 

characteristic required by OEMs, as explained in Section III.E.1.c.ii. 

177. Fabless modem chip suppliers, which outsource the manufacturing process to independent 

foundries, have little control over the manufacturing process. For this reason, as described 

above, some suppliers choose to vertically integrate and own their own foundries or “fabs.” 

Samsung, for instance, considers having its own foundry to be part of its overall strength, 

allowing it to lower costs and to quickly supply modem chips for its own mobile devices.362 

On the other hand, many modem chip suppliers do not undertake in-house manufacturing 

because for them it is more efficient to use a third-party foundry, such as TSMC.363 By 

achieving economies of scale in manufacturing, the relationship between a chip designer and 

its foundries can have important effects on the final products’ cost and time to market.

178. One reason foundry relationships can be important is that modem chips are typically designed 

for the specific process technology associated with a particular foundry. Porting a design from 

one process technology to another is costly, and specializing in a particular foundry’s process 

technologies (that might be well suited to a particular application) can generate efficiencies 

and avoid manufacturing difficulties. For example, as discussed below, Intel had a great deal 

of trouble with its Atom microprocessor design, which was optimized for a desktop 

microprocessor process, when it tried to merge it with a modem chip design optimized for a 

 

361 See, e.g., Qualcomm, 10-Q, for the quarterly period ended December 25, 2016 (“The following could have an 

adverse effect on our ability to meet customer demands and/or negatively impact our revenues, business 

operations, profitability and/or cash flows: [...] the inability of a supplier to meet performance, quality or yield 

specifications or delivery schedules [...].”). 

362 Sherr, Ian et al., “Apple Tests iPhone Screens as Large as Six Inches,” Wall Street Journal, September 5, 2013 

(“Samsung’s strategy underscores a competitive advantage: [it] is able to bring products to market more quickly 

because it controls the entire manufacturing process for its smartphones. Samsung makes everything from chips 

to screens at its own factories, allowing it to change designs and pump out new products at a rapid pace. By 

comparison, Apple relies on many suppliers to make parts for its devices and companies such as Hon Hai 

Precision Industry and Pegatron Corp ... to assemble them, requiring timely coordination between all the 

companies.”). 

363 See, e.g., Hurtarte, Jeorge et al., Understanding Fabless IC Technology, 1st Ed., Newnes 2007 (“Going forward 

in today’s complex and costly semiconductor environment, it is hard to imagine that a new semiconductor 

company could be successfully founded as a manufacturing company. The capital costs are simply too high. In 

comparison, the fabless business has continued to expand, develop, and prosper. As the manufacturing needs of 

fabless semiconductor companies have continued to increase, the wafer foundry community has continued to 

expand.”). 

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low-power TSMC process,364 suggesting that integrating the production of the two types of

chips would have been difficult. Marvell had a similar problem. It entered the AP industry by 

buying Intel’s AP and baseband businesses in 2006, but a subsequent switch of Intel’s designs 

to another foundry was expected to take several quarters.365 

F. Conclusion 

179. The analysis in this section has demonstrated that characteristics of the modem chip industry 

and the forces behind suppliers ̓ success or failure exert a strong influence on the way that 

firms compete and on the structure of the industry. 

180. Principles of industrial organization can be used to explain key features of the modem chip 

industry. The benefits of economies of scale and scope, the large upfront costs and small 

marginal cost of supplying leading-edge modem chips, and the declining modem chip prices 

imply that few firms will supply state-of-the-art modem chips in any period. Furthermore, 

demand factors such as OEMs ̓ preference for single-sourcing modem chips for high-end 

devices impose a limit on the number of modem chip suppliers that can compete at the leading 

edge. Thus, competition among technological leaders is not reflected by the number of firms 

active in the industry, but rather by large shifts in suppliers’ industry positions and different 

rates of their success and failure. 

181. The pace of innovation in modem chip technologies is rapid. Demand for mobile devices with 

cutting-edge speed and functionality has in turn generated demand for innovative, highly 

customized modem chips. The precise features demanded vary over time and by OEM, and 

 

364 See, e.g., Hruska, Joel, “How Intel Lost the Mobile Market, Part 2: the Rise and Neglect of Atom,” 

ExtremeTech, May 4, 2016 (“Intel failed to gain traction in mobile because it wasn’t willing to risk upsetting 

the economic model that had transformed it into a titan of computing. The company’s fabs, manufacturing 

strategies, and resources were geared towards large, expensive processors, not churning out huge numbers of 

low-cost mobile cores. Prioritizing Atom over Core would’ve required the company to retool at least some of 

its fabs to emphasize throughput and lower costs in order to compete with the ARM processors built at Samsung 

and TSMC. It would’ve meant lower gross margins and less profit per unit sold.”). 

365 “Cellular Handset & Chip Markets,” Forward Concepts, 2006, p. 100 (“As this report goes to press, Intel has 

announced (June 27, 2006) the sale of its cellular baseband business (along with that of its application processor 

business) to Marvell Semiconductor, Inc. Since the chip designs will be ported to a (non-Intel) silicon foundry, 

and personnel will have to be integrated into the Marvell operations (mostly in Israel for both companies) we 

expect that it will take several quarters for the transfer to be complete.”). 

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even OEMs that produce leading-edge devices, such as Apple, may not always demand modem 

chips that are on the cutting edge in every respect. Nevertheless, premium device OEMs may 

require modem chips to meet a minimum threshold in every feature, thus demanding modem 

chips that are advanced but not necessarily state-of-the-art in every respect. This implies that 

modem chip suppliers need to anticipate all these requirements, and those that are early to 

commercialize demanded new technologies can collect bountiful rewards. The economics 

literature emphasizes this point: industries characterized by rapid technological evolution tend 

to have fewer leading firms.366 

182. The rapid speed of innovation in the industry implies also that current leaders must continue 

to innovate to stay ahead. Moreover, although much progress is continuous and incremental, 

occasionally it is punctuated by a discrete leap forward, such as Qualcomm’s invention of 

CDMA or its production of the first multi-mode LTE modem.367 Such discrete steps offer a 

particular opportunity for innovative firms to displace current leaders at the forefront of the 

industry. Thus, the characteristics of the modem chip industry should be expected to result in 

the leadership and prosperity of a small but replaceable set of firms. 

183. Advances in mobile communication technologies, in the form of the introduction of a new 

standard or a new category within a standard, greatly affect the success of modem chip 

suppliers. Firms that provide OEMs with chips that support a newly demanded technology 

will be rewarded and will obtain a return on their investment; those that fail to deliver the 

desired improvements or to deliver them in a timely fashion will not be able to recoup their 

investment costs. Mobile device product cycles impose a further time constraint on modem 

chip suppliers: failure to meet an OEM-set deadline for a product release can be costly for a 

modem chip supplier, particularly if large resources had been allocated to OEM-specific 

investments. 

 

366 Economic theory generally supports the thesis that rapid technological change increases industry concentration, 

and a number of empirical studies support this thesis. Nevertheless, some theoretical and empirical studies 

suggest that innovation may lead to less concentration under certain conditions (e.g., when technological change 

reduces scale economies). For a detailed discussion of the economics literature on the relationship between 

innovation and industry structure, see, e.g., Chapter 2 in Swann, Peter and Jas Gill, Corporate Vision and Rapid 

Technological Change: The Evolution of Market Structure, Routledge, 1993. 

367 See Section V.B. 

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184. On the demand side of the industry, OEMs exert a strong influence on the structure of the 

industry. OEMs’ incentives to constantly innovate and bring new products to market translate 

into requirements for modem chip suppliers. OEMs weigh countervailing factors when they 

interact with one or multiple modem chip suppliers, which affects the duration of the business 

relationship. While the customization required at the leading edge of the industry makes it 

costly for OEMs to engage modem chip suppliers in short-lived interactions, discrete 

technological improvements create opportunities for modem chip suppliers to win an OEM 

customer.368 The varied transaction costs of different OEMs and modem chip suppliers affect 

the degree of vertical integration in the industry and, in turn, the opportunities available to 

modem chip suppliers that are not vertically integrated. 

185. Furthermore, OEMs’ considerations regarding the number and identities of suppliers from 

which they source modem chips vary depending on whether the OEM is considering a specific 

device, a device product portfolio at a given time, or its portfolio over time. While sourcing 

modem chips from multiple suppliers or adding a new supplier for a given mobile device is 

costly because of the required customization and other factors discussed above, OEMs do at 

times source modem chips from different suppliers for the same device. In addition, as 

exemplified by Samsung and Apple, the number of suppliers from which different OEMs 

source modem chips will vary depending on the breadth of their mobile device product 

portfolios and the degree of customization they require. On the one hand, Samsung 

manufactures mobile devices at different ends of the quality spectrum and with different 

features; accordingly, it sources modem chips from multiple suppliers, with an increasing 

preference for self-supplying from its vertically integrated modem chip supplier, Samsung SLSI. On the other hand, Apple’s limited number of highly customized mobile devices 

constrains the number of suppliers from which it sources modem chips. Moreover, given the 

relatively short mobile device lifecycle and the continuing developments in wireless 

technologies, the relationships between modem chip suppliers and their OEM purchasers are 

likely to be fluid or transient to some degree. In short, there is a rich set of industry influences 

on the success and failure of firms in this dynamic competitive environment. 

 

368 The fact that OEM-supplier business relationships tend to change more in periods in which a new standard is 

introduced supports this fact. I elaborate this further in Section IV (see, e.g., Exhibit IV.B.2). 

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186. On the supply side of the industry, the race to design and manufacture successively more 

advanced modem chips is central to competition among modem chip suppliers. To succeed on 

the leading edge of the industry, a firm generally must compete in three ways. First, it must 

apply foresight to target its R&D and investment on technology and features that OEMs will 

demand years down the line. Second, it must adopt successful R&D strategies and allocate 

investments efficiently. Third, it must have great execution: that is, it must produce highperforming customized chips in a timely manner. Firms that lack foresight, do not invest 

sufficiently and efficiently in the right technologies, or that struggle in their attempts at 

execution, will find themselves playing catch-up. 

187. A focus on highly innovative modem chips is not, however, the only successful strategy for 

entering and succeeding in the modem chip industry.369 Indeed, the vast expansion of mobile 

device use in developing and emerging economies, such as China and India, has created a 

demand for less costly, less customized modem chips for low-cost devices that still implement 

the necessary standards for their regions. Operating in these economies allows a supplier to 

gain a foothold and experience in the production of modem chips. As discussed above in 

Section III.E.2.b.i, some of these suppliers have used such experience to gradually move 

towards the leading-edge of the industry. MediaTek, for instance, has followed this path. 

Another advantage of being at the trailing edge of the industry is the possibility of relying on 

existing technologies or features, which does not require foreseeing future demand 

exceptionally well or investing heavily in R&D. 

188. Characteristics of the modem chip industry also have important implications for the structure 

of the industry overall. The three key factors that determine industry leadership – foresight, 

investment, and execution – imply that there will be a small number of firms at the forefront 

of the industry at any given time. Indeed, the high level of investment necessary to lead in a 

particular segment may limit the number of firms that even pursue technological leadership.

189. But just as the costs of becoming an industry leader are high, so too are the rewards to firms 

that are first to market and/or better with technologies that OEMs demand. These rewards 

incentivize R&D and entry in the modem chip industry. As the rise of industry players such 

 

369 As discussed above, for instance, some chipmakers employ a fast-follower strategy; see, e.g., Evans Deposition, 

Intel, pp. 33–34. 

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as MediaTek and the fall of players such as TI have shown, industry leadership changes over 

time. Evolution in the set of industry leaders is encouraged by the nature of technological 

progress in the modem chip industry. 

IV. ANALYSIS OF MODEM CHIP SUPPLIER–OEM RELATIONSHIPS 

190. In this section, I review evidence related to modem chip supplier–OEM relationships, 

including basic facts regarding the number of modem chip suppliers selling to OEMs at any 

point in time and the rate at which such supplier–OEM relationships are initiated and 

terminated. This evidence is relevant for distinguishing between the Industry Factors 

Hypothesis and Plaintiff’s Hypothesis. As discussed in Section III.E.1.b, the Industry Factors 

Hypothesis supports an array of modem chip supplier–OEM relationships in terms of (a) the 

number of modem chip suppliers an OEM purchases from at a point in time and (b) changes 

in the number and identities of those modem chip suppliers over time. This is because OEMs 

face trade-offs – e.g., between customization costs and keeping up with leading-edge features 

– in making such sourcing decisions. Supporting Plaintiff’s Hypothesis would require 

demonstrating that observed outcomes in this respect are inconsistent with the Industry Factors 

Hypothesis. 

A. Number of modem chip supplier relationships at each OEM 

191. As discussed above in Section III.E.1.b, there are potential costs as well as benefits to sourcing 

modem chips from multiple suppliers. OEMs typically single-source modem chips for a 

particular device model, but they may be more likely to use multiple suppliers for a model if it 

is sold in different regions or on different networks.370 For example, recent models of the 

Samsung Galaxy S-series, starting with the S6 in 2015, have all been dual-sourced using 

Samsung’s own Exynos SoCs for many regions, including Europe, and a Qualcomm modem 

chip for regions such as the U.S., Australia, China, and Japan, where compatibility with 

 

370 See Section III.E.1.b for a detailed discussion of OEMs’ choices concerning sourcing from single or multiple 

suppliers. 

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CDMA2000 or certain advanced LTE features were demanded by wireless carriers. 371 

Samsung has also sourced modem chips for some models of the Galaxy from suppliers other 

than Samsung or Qualcomm. For instance, a variant of the Galaxy SIII in 2013 used an Intel 

modem chip, while the 2017 Galaxy J7 was dual-sourced between Samsung and MediaTek.372 

Recently, Apple has also offered some of its iPhone models in two variants, with either Intel’s 

or Qualcomm’s chips depending on the country and network on which the iPhone operates.373

192. Because of occasional multi-sourcing for a particular device, such as the examples just 

described, and because an OEM’s product range may include devices that are best suited to 

chips from different suppliers, an OEM typically sources modem chips from more than one 

supplier at the same time. This is evidenced in Exhibit IV.A.1, which shows, for each year 

from 2008 through 2017, the number of modem chip suppliers used by each of the 10 largest 

 

371 See, e.g., “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 35 (“Samsung 

with the Galaxy S6 release in April last year began supplying its own 3G HSPA/4G Cat 4 modem with their 

Exynos 7420 octet application processor.”), p. 37 (“The Exynos 4720 is used in all S6 Models and the latest 

Note5, however the models supporting 3G TD-SCDMA, 3G CDMA EVDO are based on a standalone 3G/4G 

Qualcomm modem [...]. Also in regions, such as South Korea and Australia and Japan where Cat 6, TD-LTE 

bands exist, and carrier-aggregation (CA) features are demanded by operators – then the Qualcomm upgraded 

X5 or X8 modem is used.”) and p. 50 (“[T]he [Galaxy S6] modems are either supplied by Qualcomm (CDMA 

and TD models) or based upon Samsung’s Shannon 333 FDD modem chip set”). See also Jones, Landon, 

“Here Are the Regions Where the Exynos and Snapdragon Galaxy S9 Will Be Launched,” SamMobile, March 

2018 (“As usual, one of the largest markets for flagship devices, the United States, will receive the Snapdragon 

845 model. As we saw last year with the Galaxy S8 duo, the S9’s will be the first devices to rock the latest 

processor from Qualcomm. China is also a consistent recipient of the Snapdragon processor and this year is no 

different. Latin America and Japan are included in the bunch as well. The rest of the world, including the 

whole of Europe, will receive the native Samsung Exynos 9810 processor.”); Shah, Agam, “What chip will your 

Galaxy S7 or S7 Edge have?,” PCWorld, February 22, 2016 (“If you’re in the U.S., it’ll be a Qualcomm 

Snapdragon chip [...]. Countries in Europe and Asia will likely get models with the Exynos chip.”). 

372 See, e.g., “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 77 (“The [Intel] 

XMM6260 HSPA+ Category 14 21 Mbps is the modem inside the Samsung Galaxy SIII. The next generation 

supporting DC-HSPA+ up to 42 Mbps has appeared in the SIII LTE shipped into South Korea”). See also 

“Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 69 (“[MediaTek’s] MT6757 (P20) is 

being used in the J7max in 2017. Samsung also used its Exynos 7880 baseband processor in the J7Pro, which is 

feature identical (both Cat6 basebands and similar CPU cores) to the J7 Max except for the addition of 4GiB 

SRAM and VoLTE support on the MT6757 and the GPU performance differences of the T830 MP3 (MT6757) 

versus the T880 MP2 Exynos 7880).”). 

373 See, e.g., Segan, Sascha, “Exclusive: Qualcomm’s iPhone X Still Outpaces Intel’s,” PCMag, December 1, 2017 

(“There are three iPhone X models sold globally. Using lab equipment, Cellular Insights tested two of them: 

the Qualcomm-powered A1865, sold by Sprint, Verizon, and U.S. Cellular and in Australia, China, and India; 

and the Intel-powered A1901, sold by most other global carriers including AT&T and T-Mobile. (The third 

model, A1902, is only sold in Japan.) Here in the US, we anticipate that the SIM-free model sold directly by 

Apple will be the A1865, as that’s the model that supports all four US carriers.”). 

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mobile device OEMs, as determined by unit sales over the period 2008–2017. Samsung, the 

largest modem chip purchaser, has used between four and nine different suppliers per year 

since 2008, including itself since 2010.374 In addition to using multiple suppliers overall, 

OEMs tend to use multiple suppliers for LTE-compatible modem chips as well, as seen in 

Exhibit IV.A.2. A majority of the top OEMs have sourced LTE chips from multiple suppliers 

since 2013, with Samsung concurrently using as many as six different modem chip suppliers, 

including itself, for its LTE mobile devices. Apple, which offers a limited mobile device 

product range, sourced modem chips from no more than two suppliers at any time, as did Vivo, 

OPPO, and Sony. 

193. Moreover, as shown in Exhibit IV.A.3a–b, the sourcing of modem chips from multiple 

suppliers is particularly prevalent for OEMs that offer a wide array of product lines. For 

example, in 2012, Samsung and Huawei each offered over 90 mobile device models at a wide 

range of price points, and they each sourced modem chips from seven different suppliers. 

Conversely, OEMs with fewer device models use fewer chip suppliers: in 2012, Apple used 

two suppliers for its four device models, while in 2017, Apple, OPPO, and Vivo, the three 

OEMs with the lowest number of device models, each used only two modem chip suppliers. 

This suggests that Apple’s decision to design and sell a limited number of iPhone models likely 

contributed to its use of only one or two chip suppliers throughout its history. Similarly, an 

inspection of Samsung’s Galaxy S series of smartphones, which is Samsung’s flagship model 

akin to the iPhone, shows that since 2013 Samsung appears to have used two modem chip 

suppliers for this line at any given time: Intel and Qualcomm in the Galaxy S4 and S5 in 2013–

2014, and Samsung S-LSI and Qualcomm starting with the Galaxy S6 in 2015.375

 

374 As noted in Exhibit IV.A.1, Strategy Analytics categorized some suppliers such as Samsung S-LSI under 

“Other” prior to Q2 2013. See Section V.C.4 for a detailed history of Samsung S-LSI. 

375 See, e.g., “LTE Chip Market Trends,” Forward Concepts, 2014, p. 86 (“[T]he Galaxy S4 Active LTE A (first 

Cat 4 VoLTE Smartphone) for the Korean market is using the Qualcomm MSM8974 (MDM9x25 with 2.3 GHz 

Krait 400) chip set.”). See also “Samsung Galaxy S4 Teardown,” TechInsights (“This Galaxy S4 uses Intel’s 

PMB9820 baseband processor”); “Samsung Galaxy S5 SM-G900H,” TechInsights, 2014 (“Intel[:] #X-Gold 636 

/ PMB9820[;] Baseband Processors & Power Management”); “Samsung Galaxy S5 SM-G9008V,” 

TechInsights, 2014 (“Qualcomm[:] #MSM8974AC[;] Quad-Core Snapdragon 801 Baseband / Applications 

Processor”); “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 50 (“[T]he 

[Galaxy S6] modems are either supplied by Qualcomm (CDMA and TD models) or based upon Samsung’s 

Shannon 333 FDD modem chip set”). 

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B. Changes in modem chip supplier–OEM relationships over time 

194. As discussed in the industry analysis in Section III, the fast pace of technological change in 

the mobile device industry generates opportunities and challenges for modem chip suppliers. 

Mobile devices are updated often, particularly with new models of flagship phones such as the 

Apple iPhone and Samsung Galaxy S being released every year. This presents opportunities 

for the identities of suppliers to particular OEMs to change. 

195. Exhibit IV.B.1a uses Strategy Analytics data to show the number of modem chip supplier–

OEM relationships initiated and terminated each year from 2008 to 2017 for the top ten OEMs 

as measured by mobile device unit sales over this period.376 Most OEMs start or end a supplier 

relationship once a year on average.377 Similarly, Exhibit IV.B.1b shows the number of 

initiated and terminated OEM relationships over the same time period from the point of view 

of modem chip suppliers. Some suppliers started and ended few OEM relationships, either 

because they already had a large number of OEM customers (e.g., Qualcomm) or because they 

are vertically integrated with an OEM (e.g., Samsung S-LSI and HiSilicon). Other suppliers 

started more relationships than they ended: for example, MediaTek’s and Spreadtrum’s growth 

has been accompanied by an increase in the number of their OEM customers. Finally, for 

suppliers that have exited the modem chip industry during this time period, including 

Broadcom, Marvell, ST-Ericsson, TI, and VIA Telecom, the number of ended OEM 

relationships exceeds the number of new relationships. 

196. Exhibit IV.B.2 summarizes the OEM- and supplier-specific analyses by showing the total 

number of modem chip supplier–OEM relationships started and ended each year from 2008 to 

2017. The large number of relationships started and ended for many years is consistent with 

an industry characterized by dynamic competition. In particular, the exhibit demonstrates that 

modem chip suppliers are not foreclosed from starting new relationships with OEMs. Further, 

the data show an increase in the number of new relationships around 2011 to 2013, suggesting 

 

376 As the Strategy Analytics dataset is based on sales, it can indicate lagging supply relationships after a supplier 

has stopped developing new modem chips for an OEM or has exited the industry. For instance, the data indicate 

sales from Infineon/Intel to Apple until 2014, after Apple switched to Qualcomm, based on continued modem 

chip sales for older iPhone models rather than new releases. 

377 See Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker for Qualcomm: Parts 1 and 2,” 

April 6, 2018. 

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that the transition to 4G LTE standards spurred OEMs to seek out new suppliers. The data 

also show an even more distinct spike in the number of ended relationships starting in 2013. 

An examination of the results in Exhibit IV.B.1b reveals that many of these ended relationships 

involved modem chip suppliers that failed to create viable 4G LTE products, which led to their 

exit from the industry during this time period. I discuss these specific suppliers in more detail 

in Section V.C. 

197. To further examine how modem chip supplier–OEM relationships change over time, Exhibit 

IV.B.3 shows the modem chip suppliers for the top 10 OEMs by unit sales over the 2008–2017 

period, ranked by the number of modem chips the OEM purchased from the supplier in each 

year (as recorded by Strategy Analytics). This exhibit demonstrates that in addition to starting 

and ending modem chip supplier relationships, the relative importance of individual suppliers 

can change over time for an OEM. Of note, both Samsung and Huawei have increasingly been 

sourcing modem chips from their respective vertically integrated modem chip design 

businesses, which have become the OEMs’ largest chip suppliers by 2017. This finding is 

confirmed in Exhibit IV.B.4, which shows that both firms have significantly increased the 

fraction of their modem chip demand that they chose to self-supply, from under two percent in 

2013 to over 40 percent in 2017. 

198. These changing supplier–OEM dynamics contribute to changes in the success of individual 

modem chip suppliers over time. As wireless standards and OEM demands have evolved, 

modem chip suppliers have realized varying degrees of growth. Consequently, some modem 

chip suppliers have experienced high growth in sales while others have seen declining sales. 

This is shown in Exhibit IV.B.5, which lists the suppliers with the largest year-to-year growth 

in unit sales in each year from 2003 to 2017. Most suppliers have experienced sales growth in 

some years but declining sales in other years, and suppliers have typically varied in terms of 

their growth over time. For example, TI experienced substantial growth from 2004 to 2007 

but declined significantly in 2008. Similarly, Broadcom experienced rapid growth from 2009 

to 2011 but declined after that, while MediaTek has varied between high growth in years such 

as 2010 and declining sales in years such as 2015. The fastest growing suppliers in any one 

year are not necessarily the fastest growing suppliers in other years. 

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199. These findings are supported by Exhibit IV.B.6, which shows the overall and percentage 

change in modem chip units sold between 2008 and 2017. While the largest percentage 

changes have generally been observed for suppliers who sold relatively small numbers of 

modem chips in 2008, even some larger suppliers, such as Spreadtrum, MediaTek, and 

Qualcomm, have almost tripled their unit sales over this time period. Furthermore, this time 

period saw the entry of a number of new leading modem chip suppliers, including Samsung SLSI and Intel, as well as smaller suppliers such as Altair and Sequans. Conversely, about half 

of the suppliers that sold modem chips in 2008 exited the industry before 2017. Notably, as 

mentioned above and discussed further in Section V.C, these suppliers typically exited because 

they failed to transition to supplying modem chips that work within the 4G LTE standard, 

while much of the growth from suppliers such as MediaTek and Spreadtrum can be attributed 

to their growth in offering LTE chips.378

200. The patterns of changes in modem chip supplier–OEM relationships over time are consistent 

with ongoing competition among suppliers to gain supply relationships with OEMs. The 

associated variation in the success of individual modem chip suppliers is further consistent 

with the ability of new entrants to successfully challenge incumbent suppliers and grow their 

share of sales through successful development of modem chips that are demanded by OEMs. 

C. Modem chip supplier–OEM relationships for high-end mobile devices 

201. I have not been asked to opine on the alleged definition of the market for modem chips, and 

therefore do not present any such opinion. Because Plaintiff’s allegations focus particular 

attention on so-called “premium” modem chips that they allege are supplied to flagship 

smartphones,379 which Plaintiff’s expert Professor Shapiro refers to as smartphones with a 

retail price over $400,380 I analyze supplier–OEM relationships for “High-End” and “Ultra

High-End” mobile devices, as classified in the IDC Mobile Devices Tracker dataset that 

 

378 See also Exhibit V.B.8 for the growth of LTE modem chip sales by supplier. 

379 Complaint, ¶¶ 131–134, 144. 

380 Shapiro Report, ¶ 62, ¶ 176, ¶ 445. For the period prior to 2013, Professor Shapiro uses a $300 threshold. 

Shapiro Report, ¶ 62, ¶ 176, ¶ 445. 

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categorizes devices into five tiers.381 As used in the IDC Mobile Devices Tracker dataset, 

“High-End” devices have selling prices between $400 and $600; “Ultra High-End” devices 

have selling prices over $600. 

1. Greater concentration among high-end OEMs 

202. The economics literature suggests that industry concentration will be higher among suppliers 

of high-end products than among suppliers of low-end products. Designing innovative, 

customized, high-end devices requires large R&D investments, and a firm will be willing to 

supply these products only if it expects to recover its costs by capturing a large proportion of 

sales. As a result, these R&D-intensive, customized, high-end products will be supplied by 

fewer firms.382 This has been recognized by modem chip industry participants as well, with 

an Ericsson executive attributing the OEM concentration between Apple and Samsung as a 

factor in Ericsson’s decision to exit the modem chip industry.383 Similarly, 

 

381 IDC records estimates of revenue and units sold, by quarter, for mobile devices from Q1 2004 to Q4 2017, as 

well as device characteristics such as vendor (i.e., OEM), model name (starting in Q1 2010), and compatible 

wireless standards. IDC also categorizes devices into “smartphone tiers” as “Ultra Low-End,” “Low-End,” 

“Mid-Range,” “High-End,” or “Ultra High-End”; I consider the devices categorized as “High-End” and “Ultra 

High-End” for my analyses in this section. 

382 As I discuss in Section III.B above, the high customization and asset specificity of modem chips at the leading 

edge suggests there will be fewer firms. See, e.g., Davis, Peter and Eliana Garcés, “Quantitative Techniques for 

Competition and Antitrust Analysis,” Princeton University Press, 2009, p. 34 (“[I]f R&D [...] expenditures 

involve large fixed outlays that are largely independent of the scale of production, they will result in economies 

of scale”) and p. 29 (“If we have substantial economies of scale, the minimum efficient size of a firm may be 

big relative to the size of a market and as a result there will be few active firms in the market.”). See also 

Williamson, Oliver E., “Intermediate Product Markets and Vertical Integration,” in Oliver Williamson, Markets 

and Hierarchies: Analysis and Antitrust Implications: A Study in the Economics of Internal Organization, The 

Free Press, 1975, p. 89 (“Consider an industry that produces a multicomponent product, assume that some of 

these components are specialized (industry specific), and assume further that among these are components for 

which the economies of scale in production are large in relation to the market. The market, then, will support 

only a few efficient-sized producers for certain components.”). 

383 Zander Deposition, Ericsson, p. 102 (“Q. And at a high level can you recall what the factors were that led to that 

decision? A. Yes, so it was several factors, [...] we saw there was a high customer concentration with literally 

Apple and Samsung to address within modems in premium segment.”), and p. 144 (“Q. [...] Why did the high 

customer concentration -- how did that impact the decision to exit the baseband chipset market? A. It made the 

addressable market very digital in size. [...] Samsung, using multi-supplier, never giving anyone any 

guarantees, so you had to qualify every day working with Samsung, while Apple have less design in slots with 

longer lead times, so really very difficult and costly to fight for a space [...] -- and, you know, both players 

together significantly dominating the market segment leaving actually no space for the handset, other handset 

vendors either.”). 

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 Furthermore, 

concentration may tend to increase over time in technically innovative industries such as the 

mobile device industry, because firms that succeed at innovating become more competitive.385 

Below, I summarize the evidence of this concentration. 

203. Exhibit IV.C.1 shows the share of mobile devices sold globally each year from 2013 to 2017 

by the top four OEMs across all tiers and separately for each of the five tiers. It also shows 

the total number of mobile devices reported as sold in the IDC data each year. There is a 

notable difference in the share of the top four OEMs across the tiers: sales in the low-end tiers 

are much less concentrated than in the high-end tiers. Specifically, sales of high-end (“HE”) 

devices are more concentrated than sales of low-end devices, with the top four OEMs selling 

approximately 80 percent of HE devices each year. Sales of ultra-high-end (“UHE”) devices 

are even more concentrated, with the top four OEMs selling between 92 and 98 percent of all 

devices each year. 

204. To further show the concentration in sales of high-end devices, Exhibit IV.C.2a shows annual 

global sales of UHE devices from 2010 to 2017 for the top 10 OEMs selling UHE devices, and 

Exhibit IV.C.2b shows combined sales of UHE and HE devices. Exhibits IV.C.2c and 2d show 

the same information, but restricted to just LTE mobile devices. These exhibits demonstrate 

that sales of UHE and HE mobile devices are, in large part, the sales of Apple and Samsung 

whose high-end devices sold at high prices. These two OEMs accounted for the sales of 

 

384 

385 See, e.g., Council of Economic Advisers Issue Brief, “Benefits of competition and indicators of market power,” 

p. 3 (“Sometimes, a firm’s market share increases because of innovations by the firm, which results in products 

and services values by consumers. [...] Market share may increase as a firm realizes economies of scale, or 

efficiencies created by larger operations, resulting in lower costs that are passed on to consumers in the form of 

lower prices.”). 

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approximately 90 percent of UHE devices and 75 percent of UHE and HE devices between 

2011 and 2017. Apple alone sold approximately two-thirds of all UHE devices, and about half 

of all UHE and HE devices, between 2011 and 2017. While Apple and Samsung sold the 

largest volumes, numerous other firms also sold high-end devices each year. Notably, as 

shown in Exhibit IV.C.2d, Huawei and OPPO have grown considerably in recent years, and in 

2017 each sold over 20 million high-end LTE mobile devices. 

205. Concentration at the device level is also much higher in the UHE tier than in the “Ultra-Low 

End” (ULE) tier. Specifically, as shown in Exhibit IV.C.3, between 2010 and 2017 the top 20 

UHE devices based on unit sales sold much higher volumes than the top 20 ULE devices, even 

though the total numbers of UHE and ULE devices sold have been roughly comparable in the 

last few years. As a result, the top 20 UHE devices accounted for more than 75 percent of 

sales of all UHE devices during this time period, while the top 20 ULE devices accounted for 

only 12 percent of the sales of all ULE devices. Consistent with the results in Exhibit IV.C.2a, 

all top 20 UHE devices were sold by either Apple or Samsung, while the top 20 ULE devices 

were sold by four different OEMs. 

206. This concentration among HE/UHE OEMs appears to have had impacts on the modem chip 

suppliers as well. 

 

207. The higher concentration in sales of high-end mobile devices, when combined with the 

tendency of OEMs to single- or dual-source modem chips for a given device and to generally 

 

386 

 

387

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source from a subset of all suppliers, implies that sales of modem chips for high-end devices 

are likely to be more concentrated among suppliers than sales of modem chips for low-end 

devices. Indeed, the relatively small number of highly successful ultra-high-end mobile 

devices means that sales would naturally tend to be highly concentrated among a small number 

of suppliers of “high-end” modem chips. 

2. Increasing vertical integration among high-end OEMs and their modem chip 

suppliers 

208. The increasing self-supply of modem chips by Samsung and Huawei has important 

implications for the success of modem chip suppliers that are not vertically integrated. As 

Exhibits IV.B.3 and IV.B.4 show, both of these OEMs have been gradually reducing the 

number of other chip suppliers from which they source chips as the share of their self-supplied 

chips has grown. For example, 

 

 

 

388 

389 

390 See Exhibit V.C.14c. 

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209. Samsung’s increasing use of self-supply has similarly diminished its sourcing from other chip 

suppliers. Samsung’s Hojin Kang testified to this, stating that as Samsung used its S-LSI 

modem chips in its flagship smartphones since around 2015, it has purchased fewer Qualcomm 

modem chips.391 This has resulted in Samsung S-LSI becoming Samsung’s largest modem 

chip supplier by 2017, with Qualcomm the second largest, as shown in Exhibit IV.B.3. 

Likewise, industry analysts have noted that MediaTek has also lost out on opportunities to 

supply modem chips to Samsung in the “mid-range” segment.392 

210. Similarly, Huawei’s increasing use of HiSilicon chips has reduced its demand for modem chips 

from other suppliers. Just as MediaTek was noted to have lost out due to Samsung, its sales 

were also restricted due to Huawei’s use of its in-house Kirin 650 and 960 SoCs.393 This is 

also evident in Exhibit IV.B.3, as HiSilicon has displaced MediaTek and Qualcomm to become 

Huawei’s largest modem chip supplier since 2016. 

211. The increased vertical integration of modem chip supply by these two OEMs may thus 

naturally limit opportunities for non-integrated modem chip suppliers to find OEM customers 

for their modem chips. Put differently, as Samsung and Huawei source more modem chips 

from their respective captive chipmakers (i.e., shift their demand from external suppliers to 

self-supply), the aggregate demand for chips made by independent modem chip suppliers such 

as Qualcomm, Intel, and MediaTek will be reduced.394 Facing the threat of in-house suppliers 

 

391 Kang Deposition, Samsung, p. 103 (“Q. And the use of LSI in the flagship phones has caused a diminution in 

the number of chips that Samsung was buying from Qualcomm since 2015? [...] THE WITNESS: That’s right. 

The use of LSI in the -- those phones starting from around that time point brought diminution in the number of 

chips that we purchased from Qualcomm.”). 

392 See, e.g., “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 77 (“However, MediaTek is 

cut off from addressing the higher priced mid-range segment [...]. Also, they have been unsuccessful at 

Samsung in the same segment of the market, owing to Samsung Electronics strong investments in baseband 

processing now covering the mid-tier as well as premium segment.”). 

393 See, e.g., “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 77 (“However, MediaTek is 

cut off from addressing the higher priced mid-range segment owing to Huawei’s strong market abroad (now 

over 40%), which is based upon their own HiSilicon integrated processors such as Kirin 650 and Kirin 960 

baseband-processors.”). 

394 See, e.g.,

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as competitors for sockets, independent modem chip suppliers may choose to exit the business 

of supplying modem chips for OEMs that sell high-end devices,395 decreasing the number of 

potential suppliers available to OEMs such as Apple that lack captive modem chip suppliers.396

D. Conclusion 

212. The above analyses demonstrate that, as predicted by the Industry Factors Hypothesis, the 

modem chip industry is generally described by fluid relationships between modem chip 

suppliers and their OEM purchasers, but that OEMs differ in their decisions concerning the 

number of modem chip suppliers they use and adjustments in their supply relationships, 

consistent with their requirements and strategic choices. While mobile device OEMs tend to 

source from only one or two suppliers for a given device, across product portfolios, they source 

modem chips from multiple suppliers whose number and identity vary over time, leading to 

frequent turnover in industry leadership. 

. Simultaneously, as in other industries 

characterized by rapid technological change, the modem chip industry has tended toward 

increased concentration and relatively few competitors, particularly in sales to the high end of 

the mobile device product spectrum, as evidenced by Apple’s and Samsung’s combined high 

share of sales of high-end mobile devices. This trend is reinforced by continued vertical 

integration of some mobile device OEMs, such as Samsung and Huawei, into the supply of 

modem chips. The combination of concentration among high-end OEMs and increasing 

vertical integration between high-end OEMs and their suppliers diminishes the amount of 

business available to independent modem suppliers such as Qualcomm, MediaTek, and Intel, 

 

395 While Samsung and have used self-supply for a variety of their devices, the effect may be particularly 

prevalent for “high-end” devices given that Samsung and make up a relatively large portion of sales in 

those IDC categories. See Exhibit IV.C.2a–d. 

396 For example, if there is a minimum efficient scale for non-integrated modem chip suppliers, then reduced 

demand for their chips from vertically integrated OEMs may force the non-integrated suppliers to decrease their 

output or exit the industry (See, e.g., Chandler, Alfred, Scale and Scope: The Dynamics of Industrial 

Capitalism, Harvard University Press, 1994, p. 27 “the number of plants in an industry that could operate at 

minimum efficient scale at a given point in time was limited by the size of the market for that industry’s 

product.”). 

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limiting their ability to achieve a profitable scale and resulting in relatively few successful chip 

suppliers at the high end of the mobile device industry. 

V. ANALYSIS OF MODEM CHIP SUPPLIER PERFORMANCE 

A. Introduction 

213. The industry analysis in Section III together with the analysis of modem chip supplier–OEM 

relationships in Section IV identify relevant industry factors and their implications for the 

structure and development of the modem chip industry, as well as for the successes and failures 

of individual modem chip suppliers. These analyses, grounded in principles of industrial 

organization, yield the Industry Factors Hypothesis, which posits that industry factors are the 

predominant force shaping the modem chip industry, and that the overwhelming drivers of 

success and failure of individual firms are their capabilities to anticipate and meet the demands 

of OEMs within the context of these broader industry factors. As established in Section III, 

the three main factors contributing to such capabilities – and thus to modem chip suppliers’ 

successes and failures – at the innovative forefront of the industry are: (i) foresight, or the 

ability to predict and align with demand; (ii) efficient and strategic investment in developing 

modem chip technologies; and (iii) execution, as demonstrated by timely, reliable delivery of 

products. However, modem chip suppliers not at the forefront of the industry can also succeed 

by pursuing other strategies, such as, for example, the fast-follower strategy. Section IV 

demonstrates how these industry factors lead to generally fluid relationships between modem 

chip suppliers and mobile device OEMs, with increasing concentration and vertical integration 

of OEMs reducing the scale available to modem chip suppliers offering their products on the 

merchant market. As discussed in Sections III and IV and illustrated in more depth in this 

section, industry factors explain the structure of the modem chip industry and the successes 

and failures of individual chip suppliers. 

214. By contrast, Plaintiff’s Hypothesis predicts that modem chip suppliers exited the industry or 

failed to enter or succeed because Qualcomm’s alleged exclusionary conduct rendered them 

unable or at least less able to compete. Plaintiff’s Hypothesis predicts that a modem chip 

supplier would have been able to design and manufacture modem chips embodying the 

functionalities demanded by downstream customers at a certain time if its ability to learn, 

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innovate, and produce chips at a profitable scale were not allegedly hampered by Qualcomm’s 

conduct. 

215. Having identified these two different hypotheses, in this section I proceed with an analysis of 

Plaintiff’s Hypothesis. In particular, I assess whether observed outcomes are contrary to those 

predicted by the Industry Factors Hypothesis, which is necessary to support Plaintiff’s 

Hypothesis. This analysis has two parts. First, I evaluate the factors underlying Qualcomm’s 

experience in sales of cdmaOne/CDMA2000, WCDMA, and LTE modem chips. This part of 

the analysis seeks to determine whether that experience is explained by industry factors or, in 

the alternative, requires other explanations. Second, I evaluate the success, or lack thereof, of 

several other modem chip suppliers during the relevant period. As in the evaluation of 

Qualcomm’s experience, a key component of this part of the analysis evaluates whether the 

failures or exits of chip suppliers during this period can be explained by industry factors or, 

alternatively, require other explanations. 

216. As discussed in detail below, my analysis supports the Industry Factors Hypothesis and does 

not support Plaintiff’s Hypothesis. I find that Qualcomm is a successful modem chip supplier 

because of its competitive advantages and engineering prowess. Qualcomm’s foresight in 

choosing which wireless standards to implement and which advanced features to support; its 

strategic, sizeable, efficient, and sustained investments in R&D; and its effective execution 

including consistent, timely, and reliable supply of innovative, high-performance chips have 

served as its foundation for success. Similarly, I find that successes and failures of other 

modem chip suppliers are also explained by the Industry Factors Hypothesis and do not 

support Plaintiff’s Hypothesis. 

B. Qualcomm’s experience 

217. In this section, I apply my analytic framework to Qualcomm’s experience during the evolution 

of 2G, 3G, and 4G wireless standards. As described below, the Industry Factors Hypothesis

explains Qualcomm’s success in developing products for these different wireless standards. 

For each family of wireless standards (cdmaOne/CDMA2000, WCDMA, and LTE, 

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respectively),397 I evaluate Qualcomm’s strategic decisions with regards to implementing the 

standards and advancing the technology, Qualcomm’s ability to develop modem chips 

compatible with the standards, and the reasons for Qualcomm’s sustained level of performance. 

I attribute Qualcomm’s success over the past three decades to the industry factors identified in 

Section III, which have contributed to different extents to Qualcomm’s success during different 

generations of wireless technologies. Furthermore, consistent with evidence presented in 

Section IV, Qualcomm’s relationships with OEMs and other industry participants, such as 

network carriers, have evolved over the years, with new relationships formed while others have 

dissolved. 

1. cdmaOne and CDMA2000-compatible modem chips 

218. Qualcomm’s success with CDMA cellular technology was the result of a risky, but ultimately 

successful, R&D strategy that began in the late 1980s. Qualcomm showed effective foresight 

by aggressively pursuing CDMA technology years before any other firm recognized its 

potential for the wireless space. After successfully demonstrating the feasibility of cellular 

CDMA, Qualcomm made the strategic decision to double down: in order to turn CDMA into 

a practical reality, it focused on the design, and initially also the manufacture, of CDMA 

modem chips, CDMA mobile devices, and CDMA-compatible network infrastructure. 

Qualcomm was then able to stay ahead of its competitors in CDMA for an extended period by 

way of continued innovation; many potential competitors decided to focus on other 

technologies, such as GSM and WCDMA, which accounted for the bulk of modem chip 

shipments. Despite CDMA’s expected obsolescence, ongoing requirements for backward 

compatibility with earlier standards have not only allowed Qualcomm to continue to profit 

from its strategic decision to support CDMA-compatible modem chips but also attracted other 

chip suppliers to enter and offer CDMA-compatible modem chips. 

 

397 A family of wireless standards can contain multiple standards and multiple associated revisions or releases of 

each standard. For example, the CDMA2000 family of standards evolved through a number of versions, such 

as CDMA2000 1X, CDMA2000 1xEV-DO Rev. A, and CDMA2000 EV-DO Rev. B; see, e.g., “CDMA 

History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. Unless specified further, I use the 

term “CDMA standards” to refer to the broad families of cdmaOne and CDMA2000 standards and their 

revisions. 

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219. For context, Exhibit V.B.1 shows the number of handsets sold, by technology, from 1994 to 

2017. This reveals the prevalence of GSM handsets in the earlier years, the emergence of 

CDMA handsets in the early 2000s, and the overall rapid growth of the industry after the 

introduction of 3G and 4G technologies. Despite CDMA’s presence in the industry over the 

past two decades, shipments of CDMA-compatible handsets had not accounted for more than 

20 percent of all global shipments in any year prior to the introduction of LTE. The number 

of CDMA handsets (with CDMA as the highest supported standard) shipped per year increased 

until 2011, when about 230 million handsets were shipped, before dropping below 200 million 

in the following few years. The prevalence of CDMA-compatible handsets increased again 

following the introduction of multi-mode LTE/CDMA handsets. 

a. Initial development of the CDMA technology and cdmaOne standard 

220. In the 1980s, participants in the telecommunications industry began to plan for the introduction 

of digital technologies to increase the capacity of cellular networks.398 These 2G digital 

technologies would make more efficient use of the available spectrum than 1G analog 

technologies by converting and compressing analog voice data into digital signals.399 The first 

2G standards to gain acceptance in Europe and the U.S. were based on TDMA technology. In 

Europe, the TDMA-based GSM standard was established in 1987.400 In the U.S., the TDMAbased IS-54 standard was adopted in 1989 – despite failing to achieve the tenfold increase in 

capacity desired by the industry.401

 

398 Ghosh, Arunabha, et al., Fundamentals of LTE, Pearson, 2011, p. 6 (“2G systems were also aimed primarily 

toward the voice market but, unlike the first generation systems, used digital modulation [...and] provid[ed] 

improved voice quality, capacity, and security[.]”). 

399 Luo, Fa-Long, Digital Front-End in Wireless Communications and Broadcasting: Circuits and Signal 

Processing, Cambridge University Press, 2011, p. 6 (“[...T]he key difference between 2G and 1G 

communication [...] is realized by adding a digital-to-analog (D/A) converter [...]. Compared to analog 

systems, digital systems have [...h]igher frequency efficiency. Digital data can be compressed, so digital 

systems have higher spectrum efficiency.”). 

400 See, e.g., “History,” GSMA (“Basic parameters of the GSM standard agreed in February [1987].”). See also 

Ghosh, Arunabha, et al., Fundamentals of LTE, Pearson, 2011, p. 8 (“The GSM air-interface is based on a 

TDMA scheme [...].”). 

401 See, e.g., Mock, 2005, p. 49 (“In September 1988, the Cellular Telecommunications Industry Association 

(CTIA) published a set of User Performance Requirements (UPR) that encouraged the industry to develop a 

digital wireless standard with at least ten times the capacity of the current analog networks[.]”) and pp. 57–58 

(“The [European Union] had already [...shown] that time-based wireless techniques could boost network 

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221. In late 1988, Qualcomm proposed using the alternative CDMA technology,402 which had the 

potential to greatly increase network capacity relative to TDMA.

403 Qualcomm was well 

positioned to pioneer this radically different approach: its engineers had experience applying 

similar techniques to satellite-based communications for long-haul trucking.404 Incumbents 

who had already invested in developing TDMA-compatible infrastructure and modem 

technology, and stood to lose the most from a competing standard, did not embrace CDMA.405 

Some industry and academic participants considered CDMA too complicated for commercial 

implementation and potentially infeasible.406

 capacity by at least three times by most estimates. [...] The CTIA had been working with many U.S. 

companies to develop a time-based wireless protocol, even though it was clear that this protocol wouldn’t meet 

the CTIA’s mandate for capacity. [...T]he Telecommunication Industry Association (TIA) - with the 

endorsement of the CTIA - voted in January 1989 to select the time-based (TDMA) method of digital 

communication for cellular systems [...] technically termed IS-54)[.]”). 

402 I. Jacobs Deposition, Qualcomm, pp. 10-11 (“Q. What were the first products that Qualcomm provided to -- for 

use in commercial deployment of cellular networks? A. Well, there's a bit of a history to that. [...] Came back 

[...] to looking at CDMA research, development, roughly in November of ‘88, as I recall. Looked at that for a 

period -- looked very promising. [...] Any case, the industry was moving towards something called ‘time 

division,’ ‘TDMA.’ There was a big industry dispute over that. There was a vote in -- [...] I think the vote was 

January of ‘88 to go ahead with TDMA in the U.S. We went, a few months later, to stock with the first 

operator. [...] About CDMA -- [the operators] were interested -- of course, it had potential advantages over 

TDMA. We pursued that further. [...P]eople had looked at [CDMA] around the world for several years, 

[...but] hadn’t found a way to deal with some of the difficult problems. We [...] found ways of dealing with 

those problems, built that into the demonstration equipment, and had a demonstration [...] in October of ’89.”). 

403 “Geek Page - Spread-Spectrum Technology,” Wired, April 1, 1995 (“While chances are CDMA won’t 

immediately result in the twentyfold increase in capacity that some have claimed, it will offer significantly 

greater capacity than TDMA - and more room for improvement.”). 

404 See, e.g., Bodine, Paul, Make It New: Essays in the History of American Business, iUniverse, 2004, p. 158 (“If 

there was any segment of the U.S. transportation industry that needed the help of wireless long-distance 

communications it was the trucking industry. [...B]etween 1985 and 1988 [Qualcomm founders] Jacobs and 

Viterbi began developing a wireless, two-way messaging and positioning system that would enable trucking 

firms to closely track their drivers’ progress across their routes while drivers and dispatchers easily beamed 

messages to each other. Christened OmniTRACS, the system would create continent-wide coverage by leasing 

the capability of existing communications satellites.”). 

405 I. Jacobs Deposition, Qualcomm, pp. 10-11 (“Q. What were the first products that Qualcomm provided to -- for 

use in commercial deployment of cellular networks? A. [...] Any case, the industry was moving towards 

something called ‘time division,’ ‘TDMA.’ There was a big industry dispute over that.”). 

406 For example, a Stanford University professor of electrical engineering characterized CDMA as defying the laws 

of physics and “something of a hoax,” see Kraul, Chris, “Down to the Wireless: Stakes High as Rivals Race to 

Provide Next Generation of Cellular Gear,” Los Angeles Times, May 20, 1996. See also Mock, 2005, p. 51 

(“[T]he complexity of transmitting code-based communications in real time made [CDMA] appear to many 

engineers to be beyond the reaches of the current technology.”). 

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222. Qualcomm’s then-CEO Irwin Jacobs set an aggressive timeline for demonstrating that CDMA 

technology could work.407 He scheduled the first demonstration of the CDMA technology for 

late 1989.408 Reportedly, even “[m]ost of the engineers working for him thought he was 

nuts.”409 The initial demonstration was a success, as was a second demonstration a few months 

later in an urban setting among tall buildings in New York City.410 As a result, Qualcomm 

received funding from network operators and equipment vendors to continue the development 

of CDMA systems.411 The first large-scale CDMA capacity tests using commercial-grade 

equipment took place in late 1991.412

223. In 1993, after Qualcomm had overcome the fundamental technical challenges associated with 

implementing CDMA technology, the TIA adopted CDMA and issued the Interim Standard 

95 (IS-95), also known by the proprietary name cdmaOne.413 This publicly available standard 

 

407 Qualcomm’s then-CEO, Irwin M. Jacobs, believed that “if 1989 ended before CDMA went live, neither CDMA 

nor [Qualcomm] would survive.” Perry, Tekla S., “Irwin Jacobs: Captain of CDMA,” IEEE Spectrum, April 

25, 2013. 

408 I. Jacobs Deposition, Qualcomm, pp. 10–11 (“Q. What were the first products that Qualcomm provided to -- for 

use in commercial deployment of cellular networks? A. [...] About CDMA [...], it had potential advantages 

over TDMA. We pursued that further. Had a meeting with a number of operators and manufacturers in 

Chicago in June of that year, I believe. Nobody found any holes in what we were talking about, but it was clear 

we needed to do a demonstration, show that we had solved with CDMA, indeed did it work -- people had 

looked at it around the world for several years, [...] hadn’t found a way to deal with some of the difficult 

problems. We had dealt with those, found ways of dealing with those problems, built that into the 

demonstration equipment, and had a demonstration -- again, if I have my year right, in October of ‘89.”). 

409 Perry, Tekla S., “Irwin Jacobs: Captain of CDMA,” IEEE Spectrum, April 25, 2013. 

410 See, e.g., Perry, Tekla S., “Irwin Jacobs: Captain of CDMA,” IEEE Spectrum, April 25, 2013 (“[Irwin] Jacobs[, 

Qualcomm’s CEO,] repeated the [successful San Diego] demonstration in January 1991 in New York City, 

where skeptical executives at wireless carriers thought CDMA would fail when confronted with a sea of tall 

buildings.”). See also I. Jacobs Deposition, Qualcomm, pp. 12–13 (“Q. What were the difficult problems with 

CDMA deployment that Qualcomm addressed? [...A.] In Manhattan, you come suddenly out to an avenue 

with lots of energy coming from a different direction -- lots of problems with that sort that defeated many 

people. In any case, we came up with a very good power-control approach for CDMA.”). 

411 Mock, 2005, p. 81 (“Due in large part to the success of the San Diego and New York trials, Qualcomm was able 

to win the commitment of six leading operators and equipment vendors: AT&T, NYNEX Mobile, Ameritech 

Mobile Communications, Motorola, OKI Electric, and PacTel Cellular. Over the next several months, these 

companies collectively committed more than $30 million to the continued development of code-based wireless 

into commercial-capable equipment within the next two years.”).

412 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. 

413 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp (July 1993: “U.S. TIA 

adopts CDMA (IS-95A) as a North American digital cellular standard”; June 1997: “cdmaOneTM trademark 

launched by CDG for IS-95 CDMA”). 

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provided a template for other manufacturers to implement cdmaOne technology in their own 

products.414 Qualcomm spent $25 million on R&D in 1992 and over $27 million in 1993, 

when the cdmaOne standard was accepted.415 However, there were still no CDMA phones or 

networks that could start repaying this risky investment. 

b. Development of CDMA networks 

224. Qualcomm showed foresight by pursuing the technical advantages of CDMA over TDMA and 

anticipating the adoption of CDMA technologies in wireless standards. However, acceptance 

of cdmaOne as a standard did not guarantee that the technology would be commercially 

successful. 416 Commercial success required carriers to deploy cellular networks that 

implemented the standard and customers to purchase cellular services on those networks. 

According to one of the co-founders, Irwin Jacobs, Qualcomm understood that in order for the 

technology to succeed, it needed to be used as widely as possible.417 Stakeholders in the 

cellular communication industry in the early 1990s did not prioritize making large-scale 

investments to develop commercial CDMA-compatible devices and network infrastructure.418 

To promote adoption of CDMA technology, Qualcomm decided to demonstrate its viability to 

these stakeholders by independently designing and producing CDMA-based modem chips, 

devices, and network infrastructure in order to offer an end-to-end solution.419

 

414 Mock, 2005, p. 90 (“With formal documentation of the common air interface in hand, Qualcomm was confident 

that the code based wireless infrastructure and mobile units could be commercialized quickly [...].”). 

415 Qualcomm, 10-K, 1996. 

416 See, e.g., Mock, 2005, p. 113 (“Even after [...] several manufacturers signed license agreements for CDMA, 

none were eager to divert their efforts from other digital technologies [...].”). 

417 I. Jacobs Deposition, p. 28 (“Q. What was Qualcomm’s rationale in encouraging multiple manufacturers of 

CDMA-compliant products? A. We wanted to have the technology as used -- as widely as possible. We 

thought it was by far the best technology. Otherwise, we wouldn’t have continued to work on it so long and so 

hard. And, therefore, our approach always was to have the broadest possible use as opposed to kind of a narrow 

approach.”). “History,” Qualcomm, available at https://www.qualcomm.com/company/about/history (“In July 

of 1985, seven people – Dr. Irwin M. Jacobs, Dr. Andrew Viterbi, Harvey White, Franklin Antonio, Andrew 

Cohen, Klein Gilhousen, and Adelia Coffman found Qualcomm, opening the Company’s first office in La Jolla, 

California.”). 

418 See, e.g., Mock, 2005, p. 114 (“Some vendors were caught up in manufacturing TDMA and GSM phones, 

which were already ramping up to significant volumes and others just plain didn’t have enough experience in 

CDMA to get up to speed quickly.”). 

419 I. Jacobs Deposition, Qualcomm, pp. 16–17 (“Q. For the deployment in Hong Kong in roughly 1995, what were 

the products that Qualcomm provided? A. [...] The handsets -- there were no other handset manufacturers in 

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225. By 1992, Qualcomm had licensed several mobile device manufacturers, including Nokia and 

Motorola, but they were not showing signs of support for large-scale production.420 Qualcomm 

made a strategic decision to invest in manufacturing early CDMA mobile devices.421 Because 

modem chip technologies available at the time could not accommodate CDMA, Qualcomm 

also developed its own modem chips. In March 1993, Qualcomm introduced its first true 

handheld cellular mobile device and the first cellular mobile device based on CDMA, the CD7000.422 Lacking experience in large-scale manufacturing techniques, Qualcomm formed a 

joint venture with Sony Corporation in 1994, called Qualcomm Personal Electronics (QPE), 

to produce CDMA-based devices.423 QPE supplied the handsets that were initially deployed 

on the first CDMA network in Hong Kong in 1995.424 Within a few years, Qualcomm’s ASIC 

 the world at the time that were willing to make CDMA handsets, because the probability that we’re going to be 

successful -- A technically, and B, commercially -- didn’t seem high to many people. So we had to go into the 

handset manufacturing business.”) and p. 31 (“Q. In 1994, did Qualcomm sell ASICs to equipment 

manufacturers? A. Yes. In ‘94 I’m sure we did [...]. [...W]e then moved into the ability to both manufacture 

ourselves and support other manufacturers[.]”); Qualcomm, 10-K, 1996, p. 2 (“[Qualcomm] has an agreement 

with Nortel providing for the production and delivery of infrastructure equipment for CDMA wireless systems. 

Pursuant to the agreement, Nortel has access to Q[ualcomm]’s product designs for digital cellular, PCS and 

WLL infrastructure products and in return purchases from Q[ualcomm] a minimum percentage of Nortel’s 

CDMA infrastructure equipment requirements for resale to its customers.”). 

420 See, e.g., Mock, 2005, p. 113 (“None of the major phone manufacturers, such as Motorola and Nokia, to which 

Qualcomm had licensed CDMA were showing signs of support for large-scale manufacturing of code-based 

wireless phones [in 1992].”). 

421 See, e.g., Mock, 2005, p. 139 (“Having the most detailed and complete knowledge of CDMA allowed 

Qualcomm to turn out phones and infrastructure faster than anyone else could[.]”). 

422 “History,” Qualcomm, available at https://www.qualcomm.com/company/about/history (“In March of 1993, 

Qualcomm introduces the industry’s first dual-mode CDMA-AMPS mobile phone, the CD-7000 is the first in a 

series of CDMA-based cellular telephones designed by Qualcomm.”). 

423 “Telephone Joint Venture,” The New York Times, February 28, 1994 (“Qualcomm Inc. and Sony Electronics 

Inc. said today that they would form a $52 million joint venture to manufacture portable phones using 

Qualcomm’s code division multiple access technology. [...] The joint venture, to be called Qualcomm 

Personal Electronics, will operate out of an existing factory in San Diego [...].”). 

424 I. Jacobs Deposition, Qualcomm, pp. 16–17 (“Q. For the deployment in Hong Kong in roughly 1995, what were 

the products that Qualcomm provided? A. [...] The handsets -- there were no other handset manufacturers in 

the world at the time that were willing to make CDMA handsets, because the probability that we’re going to be 

successful -- A technically, and B, commercially -- didn’t seem high to many people. So we had to go into the 

handset manufacturing business. We had built a prototype to demonstrate that we could do it. We then 

continued to enhance that and made that into a commercial product, ultimately set up a joint venture with Sony 

to manufacture here in San Diego. The handsets that were delivered to Hong Kong were all made here in San 

Diego by Qualcomm. Qualcomm, Sony, and Sony venture, I would think.”). See also “Statement by Dr. Irwin 

Mark Jacobs, Co-Founder, Qualcomm,” prepared for the hearing on reauthorization of the SBIR and STTR 

programs before the U.S. Senate Committee on Small Business and Entrepreneurship, February 17, 2011, p. 6 

(“The first CDMA network went commercial in Hong Kong in 1995; next two networks became operational in 

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unit was also shipping millions of MSM2200 chips, “the first true single chip multi-processor 

[...] to reach mass deployment.”425

226. By 1993, Qualcomm had also signed licenses for the manufacturing of cellular infrastructure, 

with licensees including AT&T and Motorola.426 However, similar to the OEMs licensed to 

manufacture mobile devices, these licensees did not prioritize deployment of CDMA network 

infrastructure. 427 In response, Qualcomm signed a memorandum of understanding with 

Northern Telecom in 1994 to jointly develop CDMA network infrastructure.428

227. Although Qualcomm designed and tested its own modem chips, it has always been a fabless 

semiconductor company that relied on external foundries to manufacture the chips. In the early 

years, Qualcomm’s foundries included, Intel, IBM, and Philips,429 while Qualcomm currently 

relies on chip manufacturing by Global Foundries, Samsung, TSMC, Semiconductor 

Manufacturing International Corporation (SMIC), and United Microelectronics Corporation 

(UMC).430

 South Korea in 1996; and finally several networks became operational across the United States. Qualcomm 

provided handsets manufactured in San Diego for all of these early systems.”). 

425 “Qualcomm Announces Major Milestone with Shipment of Six Million MSM Chips,” Qualcomm Press 

Release, June 18, 1997 (“In record time Qualcomm’s ASIC Business Unit has taken the latest CDMA chipsets 

from volume ramp-up in the second half of 1996 to major volume production and is now running at a monthly 

rate of approximately one million chipsets. [...] The [MSM2200] includes proprietary CDMA building blocks 

and several microprocessor and DSP cores integrated onto a single chip.”). See also Q2014FTC04798968–

9027 at 8972, presentation titled “Modem Update,” Qualcomm, October 31, 2016. 

426 Mock, 2005, p. 115 (“By 1993, Qualcomm already had three major North American licensees for infrastructure-

-AT&T, Motorola, and Northern Telecom.”). 

427 Mock, 2005, p. 115 (“Of the North American [infrastructure] vendors, AT&T and Motorola were probably the 

biggest and had a lot invested in TDMA. They had already started to develop code-based wireless, albeit at a 

slower pace than Qualcomm had hoped.”). 

428 “Qualcomm Wins Northern Telecom as Partner,” Computer Business Review, July 18, 1994. 

429 Qualcomm, Form 10-K, 1996, p. 8 (“The Company currently relies on several independent foundries to 

manufacture all of its ASICs. The Company’s strategy is to utilize a number of qualified foundries that it 

believes provide cost, technology or capacity advantages for specific products. The Company currently has 

arranged with Intel, IBM and Philips for such ASIC manufacturing.”). 

430 Qualcomm, Form 10-K, 2017, p. 11 (“The primary foundry suppliers for our various digital, analog/mixedsignal, RF and PM integrated circuits are Global Foundries Inc., Samsung Electronics Co. Ltd., Semiconductor 

Manufacturing International Corporation, Taiwan Semiconductor Manufacturing Company and United 

Microelectronics Corporation.”). 

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228. Once CDMA devices and network equipment were successfully developed, CDMA networks 

were launched by various carriers. Early cdmaOne network launches in the U.S. included Bell 

Atlantic Mobile and PrimeCo (both now part of Verizon), 431 which launched cdmaOne 

services in 1996.432 CDMA also gained popularity outside the U.S., particularly in South East 

and East Asia and Latin America. Early adopters included Hutchison Telecom in Hong Kong, 

which launched the first commercial CDMA service in 1995, SK Telecom in Seoul and 

Telefonica del Peru in 1996, and MTNL in India in 1997.433 Although the number of CDMAcompatible handsets shipped globally continued to generally increase, the technology has 

never been as widespread as the competing TDMA-based GSM standard.434

229. Qualcomm’s foresight and the success of its investments in R&D are reflected in the results 

delivered by the CDMA technology. According to Qualcomm’s 1996 10-K, CDMA 

technology ultimately delivered increased capacity (10 to 20 times compared to analog systems, 

in contrast to the threefold improvement offered by GSM),435 higher quality of voice and data 

transmission, fewer dropped calls, enhanced privacy, lower power consumption and extended 

talk time, lower infrastructure costs due to fewer cells, and easier transition from analog to 

digital than TDMA.436 Qualcomm also demonstrated the performance differences between 

CDMA and TDMA.437

 

431 See, e.g., Labaton, Stephen, “F.C.C. Approves Bell Atlantic-GTE Merger, Creating No. 1 Phone Company,” 

The New York Times, June 17, 2000. 

432 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. 

433 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. 

434 See Exhibit V.B.1. 

435 “The Evolution of Mobile Technologies,” Qualcomm, June 2014, p. 18, available at 

https://www.qualcomm.com/media/documents/files/the-evolution-of-mobile-technologies-1g-to-2g-to-3g-to-4glte.pdf. 

436 Qualcomm, Form 10-K, 1996, pp. 5–6. 

437 I. Jacobs Deposition, Qualcomm, pp. 22–24 (“Q. Did Qualcomm consider retaining CDMA as a proprietary 

standard? A. [...The CTIA] asked the TDMA people to come in and demonstrate their phones which 

presumably were commercial at the time. They asked us to come in, demonstrate CDMA. And they asked 

every other manufacturer who might have a competing technology -- and there were a couple of others that did 

come in -- to be able to demonstrate theirs. We did a[n] audio demonstration [...]. [...T]he TDMA people 

went up first. It sounded terrible. We came up next. It sounded great.”). 

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230. Over time, Qualcomm continued to develop and improve CDMA technology. The 2G 

cdmaOne standard was succeeded by the family of CDMA2000 standards that went through 

several revisions. The initial CDMA2000 1X standard was accepted as a 3G standard in 1999 

and evolved to CDMA2000 1xEV-DO in 2001. 438 The CDMA2000 1xEV-DO standard 

improved transmission of data over wireless networks,439 and it was further updated over time, 

including “Revision A” in 2004 and “Revision B” in 2006 (referred to in shorthand as “Rev. 

A” and “Rev. B,” respectively), the latter of which introduced carrier aggregation.440,441

c. cdmaOne and CDMA2000 modem chip sales 

231. In addition to the practical hands-on knowledge that Qualcomm gained while building its own 

prototypes and designing mobile devices and infrastructure equipment, Qualcomm’s CDMA 

modem chip business also benefited from the technical expertise obtained during the standards 

development stage. Experience from the standards development process facilitated 

Qualcomm’s ability to respond to customer demands, exercise effective foresight, and 

efficiently implement the nascent technology in the design of its modem chips. 

232. As indicated in Exhibit V.B.2, Qualcomm was the first company to produce cdmaOne modem 

chips, in 1995, and the first supplier to produce CDMA2000 modem chips, in 2000, but others 

followed quickly as cdmaOne and CDMA networks expanded in the late 1990s and early 2000s. 

A variety of different types of firms supplied these chips.442 Initially, many mobile device 

 

438 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. 

439 “EV-DO Rev. A and B: Wireless Broadband for the Masses,” Qualcomm, December 2007, p. 3, available at 

https://www.qualcomm.com/media/documents/files/ev-do-rev-a-and-b-wireless-broadband-for-the-masseswhitepaper.pdf (“With EV-DO, consumers experienced 400-600 Kbps of average downlink throughput with 

bursts up to 2.4 Mbps - 4 to 10 times faster than data over CDMA2000® 1X [networks].”). 

440 “CDMA History,” CDG, available at http://www.cdg.org/resources/cdma_history.asp. 

441 “Transforming EV-DO Performance,” Qualcomm, available at 

https://www.qualcomm.com/invention/technologies/ev-do/rev-b (“The step up to Rev. B begins with a software 

upgrade technique called multicarrier, which aggregates up to three Rev. A channels, or carriers.”). See also I. 

Jacobs Deposition, Qualcomm, p. 76 (“Q. And was carrier aggregation an innovation that Qualcomm brought to 

CDMA-2000 because of the bandwidth limitation? A. Yes. And just the desire to get higher peak rates.”). 

442 As discussed in Section III.D.2, firms in the modem chip industry supply chips based on a variety of 

arrangements. Some firms, such as Qualcomm, Intel, and MediaTek, sell chips to mobile device OEMs on the 

“merchant market” and are willing to supply any OEM. Other firms are integrated or affiliated with OEMs; 

they sell chips either in-house exclusively (such as HiSilicon to Huawei), or primarily (such as S-LSI to 

Samsung), but may also supply chips to other OEMs. 

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OEMs such as Motorola, Samsung, and Nokia were vertically integrated firms that produced 

CDMA modem chips internally for their own mobile devices.443 Others, such as EoNex and 

VIA Telecom, were fabless chip suppliers offering CDMA chips on the merchant market.444

233. Exhibit V.B.2 also shows modem chip suppliers that were, according to industry sources, 

selling or self-supplying CDMA-compatible modem chips between 2004 and 2018. As the 

exhibit shows, in 2004 there were seven firms supplying cdmaOne or CDMA2000 modem 

chips; by 2008, only Qualcomm and VIA Telecom were offering such chips. By 2018, 

however, MediaTek, HiSilicon, Samsung S-LSI, Intel, and Xiaomi entered the segment by 

offering multi-mode chips that were backward compatible with CDMA. 

234. VIA Telecom, which was formed by VIA Technologies after acquiring LSI Logic’s CDMA 

chip division in 2002, 445 was the most successful supplier of cdmaOne and CDMA2000 

modem chips competing with Qualcomm in the merchant market. As discussed further in 

Section V.C.11, below, VIA Telecom specifically targeted the low-cost CDMA modem chip 

segment. Despite VIA Telecom’s limited investment and challenges with execution, it grew 

 

443 See, e.g., Davis Deposition, Intel, pp. 233–235 (“Q. Earlier today you referred to -- to various companies that 

had at least initiated CDMA development efforts at various points in time; [...i]s [p. 22 of Exhibit CX1771] a 

listing of companies that had either attempted to develop or actually introduced CDMA chips at [...] some point 

in time? A. Yes. This is intended to be a list of companies which had done some development or claimed to 

have done development, yes. Q. Of these companies, which found any real commercial traction in the CDMA 

market? A. [...] So early in the market, Nokia, Motorola, and Samsung did have their own development. But 

that was very early, probably pre-1x even. And then -- so those are all phone makers who did their own.”) and 

Exhibit CX1771, VIA-QCOM000638768–8855 at 8789 (“Motorola[:] [...Q]uit producing own chipset”; 

“Samsung[:] [...] Recently seem to have stopped using internal chipset”; other integrated mobile device OEMs 

that made attempts at developing CDMA chips include Hyundai, LG Electronics, Lucent, Nokia, Oki, and 

Ericsson). See also LaPedus, Mark, “Qualcomm Bars CDMA Chips Sales by VLSI Technology,” EE Times, 

September 10, 1999 (“Gaining ground on Qualcomm in the chip sections are two major OEMs – Motorola and 

Nokia. However, Motorola and Nokia separately develop their own chipsets for their own CDMA-based 

handsets; the two cell-phone giants do not sell these devices on the [merchant] market.”). 

444 “Company Overview of EoNex Technologies, Inc.,” Bloomberg. “Company Overview of VIA Telecom, Inc.,” 

Bloomberg. 

445 VIA Telecom was formed by its Taiwanese parent company VIA Technologies following the acquisition of the 

CDMA wireless division of LSI Logic in 2002. In 2003, Qualcomm transferred LSI Logic’s CDMA license to 

VIA Telecom. This non-exhaustive license “enable[d] VIA Telecom to develop, manufacture and sell 

cdmaOne and CDMA2000 1X ASICs to Qualcomm’s subscriber equipment licensees.” “Qualcomm and VIA 

Telecom Expand CDMA License Agreement,” Qualcomm Press Release, June 25, 2003. See also Hung, Faith, 

“Via Sets Up Wireless Unit Following LSI Logic Deal,” EE Times, July 12, 2002 (“Via Technologies Inc. has 

formed a unit in the U.S. to attack the wireless market following its acquisition of a unit of LSI Logic Corp. 

Named Via Telecom [...].”). 

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its share over time by supplying chips for mobile devices sold in emerging markets, including 

China and India. 446 Exhibit V.B.3 shows that VIA Telecom consistently lagged behind 

Qualcomm in modem chip performance. For example, VIA Telecom’s CBP4.0 chip, released 

in 2001, was its first CDMA2000 1X chip and enabled a peak downlink data rate of 153 

Kbps.447 By then, Qualcomm had already been offering CDMA2000 1X-compatible modem 

chips for a year and in 2001 released a CDMA2000 1xEV-DO chip with downlink rates of 2.4 

Mbps.448 It was not until 2009 that VIA Telecom released its first CDMA 1xEV-DO chip, but 

by that time, Qualcomm had already offered CDMA 1xEV-DO “Rev. A” chips for about four 

years. 

235.

 

 Similarly, OEMs that 

 

446 See, e.g., VIA-QCOM000688592–8631 at 8607 (Slide titled “Attractive Industry Growth Momentum and 

Opportunities[:] Key Market Opportunities” includes India and China) and at 8611 (Slide lists “Effective access 

to emerging markets” under VIA Telecom heading). 

447 “LSI Logic Attacks TI and Qualcomm in 3G Wireless Chip Market,” EE Times, March 21, 2001 (“[...] LSI 

Logic will compete in the cdma2000 space with the CBP4.0, a chip that also supports IS-95B and AMPS. LSI 

Logic’s chip enables wireless data at speeds up to 153-kilobits-per-second.”). 

448 Qualcomm’s MSM5000 modem chip supported the CDMA2000 1X wireless standard and was released in 

2000. Qualcomm’s MSM5500 supported the CDMA2000 1xEV-DO Release 0 standard. It was released in 

2001 and allowed for a peak data rate of 2.4 Mbps. See Q2014FTC04798968–9027 at 8972, presentation titled 

“Modem Update,” Qualcomm, October 31, 2016. 

449 Amon Deposition, Qualcomm, p. 327 

450 Amon Deposition, Qualcomm, pp. 316–318 

 

 

 and Exhibit CX6839, 

QNDCAL02130467–0469. 

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demanded modem chips supporting both CDMA and WCDMA found using a two-chip 

solution with VIA Telecom’s CDMA chip less desirable. 451 

.

452

236. Even though many firms attempted to develop and sell CDMA modem chips, most of them 

were late to enter this segment of the industry and ultimately were not successful. In an internal 

presentation from 2008, VIA Telecom recognized more than 20 attempts to compete in CDMA 

chips that failed.453 

237. The failure of competing CDMA chip suppliers to thrive appears to be due to a variety of issues 

but was often related to technical challenges in execution, lack of foresight, or was the result 

of a strategic decision to pursue development of modem chips that supported other wireless 

standards that were more prevalent or perceived as more promising.454 For example: 

i. Many vertically integrated mobile device OEMs that initially started developing 

CDMA chips for their own use later ceased those internal efforts in favor of 

purchasing chips from suppliers on the merchant market. In 1999, an EE Times 

 

451 Deposition of Todd Miller, Vice President of Sales at NVIDIA, March 22, 2018, pp. 41–42 (“Miller Deposition, 

Nvidia”) (“Q. But it was your understanding actually that VIA had had a number of phones that had shipped for 

CDMA carriers; wasn’t that right? A. [...] At the time in the premium smartphone market, OEMs wanted to 

have one phone that covered both UMTS and CDMA, and so CDMA was always a problem. [...] And so we 

would look for any potential alternative to support an OEM to build one phone for both network 

technologies.”). 

452- See Kang Deposition, Samsung, pp. 76–77 

453 Davis Deposition, Intel, pp. 235–237 (“Q. Would you describe any of these companies [listed on p. 22 of 

Exhibit CX1771 as companies that had either attempted to develop or actually introduced CDMA chips at some 

point in time] as reputable technology companies? A. Sure. Qualcomm, Nokia, Motorola, Samsung, Sony. 

Most of them, yes. [...Q.] At the time that this presentation was prepared, did the authors of the presentation 

characterize most of these efforts as -- as failed efforts? [...A.] Yes. I think that’s what the F in the rightmost 

column means. And -- and the text says most of these were failures, yes. Q. Is that a fair characterization in 

your view? A. Well, I think so, in that they -- they weren’t in production and were abandoned at the time this 

was made, all of these efforts.”) and Exhibit CX1771, VIA-QCOM000638768–8855 at 8789 (“Chip technology 

providers - history of attrition[:] Market size attracted many attempts to compete with Q[ualcomm]. But...>20 

failed!”). 

454 See also the discussion of CDMA modem chip development in the evaluation of other modem chip suppliers in 

Section V.C. 

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article reported that “[h]andset OEMs have also been developing their own CDMA 

chipsets in order to lower their costs, but most hardware vendors [were] struggling 

to get these products out the door. Recently, for example, Japan’s Sony delayed its 

own CDMA-based chipset line due in part to undisclosed problems with the 

product.”455 Fortune Magazine reported in 2000 that “Oki Electric, LG Electronics, 

and Sony all made CDMA chips for their phones but dropped those efforts in favor 

of buying chips from Qualcomm [...b]ecause Qualcomm has been able to add 

features, like geographic-positioning circuits and MP3 music-playing capability, 

sooner than anyone else.”456 Furthermore, Qualcomm packed more functionality 

into fewer chips than those of competitors, which lowered cost and allowed for 

more compact cell phones with lower power requirements.457 In addition to the 

OEMs listed above, Motorola and Hyundai also gave up on developing internal 

CDMA chips.458 Even though these industry participants ceased production and

development of CDMA modem chips, their ability to potentially restore this 

capability and the threat of re-entry kept a check on the remaining suppliers, as 

recognized by market research analysts such as UBS.459

ii. Intel abandoned efforts to produce CDMA modem chips within eight months of 

acquiring DSP Communications in 1999. As reported by EE Times in August 2000, 

Intel was “quietly backing away from the CDMA chip set market as part of a plan 

to focus on new and more promising wireless-IC segments” and was reported to be 

more bullish on the next-generation WCDMA standard.460 

 

455 LaPedus, Mark, “Samsung to Develop Line of Wireless Chips,” EE Times, April 13, 1999. 

456 Nee, Eric, “Qualcomm Hits the Big Time Pushing a Little-Known Digital Cellular Technology from Surf’s-up 

San Diego, This $4-Billion-a-Year Hotshot Wants to Be THE NEXT INTEL,” Fortune Magazine, May 15, 

2000. 

457 Nee, Eric, “Qualcomm Hits the Big Time Pushing a Little-Known Digital Cellular Technology from Surf’s-up 

San Diego, This $4-Billion-a-Year Hotshot Wants to Be THE NEXT INTEL,” Fortune Magazine, May 15, 

2000 (“What’s more, Qualcomm’s ‘chip sets’ use fewer chips than those of competitors, making possible cell 

phones that are more compact and that need less power. The chip sets also cost less to produce [...].”). 

458 See VIA-QCOM000638845–8846 at 8845 (“Motorola[:] Later took over Lucent group; quit producing own 

chipset circa 99”; “Hyundai[:] Gave up on internal chipset”). 

459 QAPPCMDS07754877–4878 at 4877, email from Miran Chun, Qualcomm, August 5, 2015 (“With the 

evolution to cdma2000lx [sic], [...] Motorola has committed to use Qualcomm’s cdma2000lx [sic] baseband 

solutions [...], leaving Nokia as the only major vendor not expected to use Qualcomm’s cdma2000lx [sic] 

baseband solutions. We [UBS] note that if Qualcomm is to keep Motorola as a cdma2000lx [sic] handset 

baseband chipset customer[,] it will have to be competitive with respect to the pricing of its MSM products. We 

[UBS] believe [...] Motorola could look elsewhere for this capability (either via internal solutions or perhaps a 

third-party) if it does not consider pricing from Qualcomm reasonable [...]. Market share gains are not likely to 

come without a price.”). 

460 LaPedus, Mark, “Intel Backs Away from CDMA Chip Market,” EE Times, August 25, 2000. 

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461

iii. Philips entered the CDMA segment in 1999 with the acquisition of VLSI 

Technology, which had a CDMA chip that was well under development and was 

supposedly already being evaluated by several major OEMs.462 Philips exited the 

CDMA segment shortly afterwards when it sold its CDMA technology to Holley 

Group in 2001.463 According to Ivo Rutten, vice president and general manager at 

Philips, Philips wanted to “take the resources [it] used to deploy in CDMA to do a 

better job with GSM and GPRS” since Philips considered GSM to be a better 

opportunity, as “[i]t’s a bigger market and [Philips has] already got a significant 

market share there.”464 Holley Group intended to provide chip design and software 

to Chinese OEMs and partnered with Hop-On to produce a disposable CDMA 

handset.465 Not long afterward, Holley started to shift its focus away from CDMA 

and joined forces with Datang, Huawei, ZTE, and other Chinese corporations in a 

joint effort to “promote the industrialization process of TD-SCDMA and to 

facilitate the development of TD-LTE” by creating the TD Industry Alliance 

(TDIA) in October 2002.466 TDIA was “committed to spreading TDD technology 

worldwide, integrating and coordinating industrial resources, boosting the sound 

 

461 See, e.g., Wolff Deposition, Intel, p. 263 

 See Section V.C.2 for further details on Intel’s 

effort to acquire CDMA technology. 

462 See, e.g., “Philips Acquired VLSI Technology with Raised Bid,” EE Times, May 3, 1999. See also LaPedus, 

Mark, “Qualcomm Bars CDMA Chips Sales by VLSI Technology,” EE Times, September 10, 1999 

(“Moreover, sources indicated that the VLSI-developed [CDMA] chipset was in the sampling stage and being 

evaluated by several major OEMs, including Ericsson and LG Electronics.”). 

463 See, e.g., Gregson, Reily, “Holley Group Acquires CDMA Technology from Philips,” RCR Wireless News, 

October 19, 2001 (“The U.S. subsidiary of China’s largest electric meter producer, the Holley Group [...] has 

acquired the design operations for CDMA mobile phones from Philips Semiconductors, a division of Holland’s 

Philips Electronics.”). See also VIA-QCOM000638845–8846 at 8845 (“Dot->VLSI->Philips->Holley[:] None, 

appears dead.”). 

464 Ristelhueber, Robert, “Philips Throttles Back on CDMA Business to Focus on GSM, GPRS,” EE Times, 

September 21, 2001. 

465 “Top CDMA Developer Holley Communications in Strategic Agreement with Hop-On,” PR Newswire, 

February 6, 2002 (“Peter Michaels, Chairman and CEO of Hop-On, commented, ‘This is a huge deal for us as it 

will give us full, FCC approved CDMA capabilities. [...] CDMA consistently offers landline voice quality and 

substantially broader flexibility in adding on features. [...W]e will be able to materially accelerate the 

development of a CDMA version of our disposable, fully recyclable cell phone by leveraging tested full feature 

models Holley has already developed. [...]’”). See also Gregson, Reily, “Holley Group Acquires CDMA 

Technology from Philips,” RCR Wireless News, October 19, 2001 (“Holley Communications USA plans to 

provide chip design and software to China’s mobile-phone manufacturers.”). 

466 “TD Industry Alliance,” China Daily. 

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development of the communication industry based on TD-SCDMA [and] 

TD-LTE.”467

iv. Samsung was developing CDMA chips internally during the late 1990s but lost 

momentum when several key engineers left to found EoNex in 2000.

468 

470

v. TI entered the CDMA industry relatively late via acquisition of Dot Wireless, a 

leader in CDMA wireless technology, in 2000.471 In 2003, TI formed a partnership 

with Nokia and STMicroelectronics.472 However, the joint venture showed lack of 

foresight by targeting the CDMA2000 1xEV-DV standard, which was never 

implemented.473 The partnership was eventually dissolved, ending TI’s efforts in 

CDMA.474

vi. One entrant with some limited success was EoNex, a South Korean company 

formed when the head of Samsung’s CDMA modem chip design team left with 

 

467 “TD Industry Alliance,” China Daily. 

468 See, e.g., Q2014FTC03368158–8159 at 8158, email from Gerald Skiver, Qualcomm, October 10, 2002 (“Dr. 

Chun was previously the head of Samsung’s internal CDMA modem design team. Dr. Chun left Samsung and 

several key engineers on his team also left to form the new company, Eonex Technologies.”). See also 

Q2014FTC03369222–9223 at 9223, email from Marv Blecker, Qualcomm, October 9, 2001 (“[...] EoNex, a 

venture startup launched last April by former researchers at Samsung Electronics Co., SK Telecom and other 

firms [...].”);

469 See Exhibit V.B.2. 

470 

 

471 See, e.g., “TI Acquires Dot Wireless, a Leader in CDMA Wireless Technology,” TI Press Release, June 29, 

2000. See also Yoshida, Junko, “Qualcomm Bullish in Its 2004 Outlook,” EE Times, February 23, 2004 

(Sanjay Jha, QCT’s president at the time, said in an interview with EE Times that “the recent CDMA market 

entry by Texas Instruments and STMicroelectronics [did] not present a source of concern for him: ‘Rather, the 

question to ask is what took them so long to join the CDMA market.’”). 

472 Mannion, Patrick, “TI and STMicro Offer Modular CDMA 1x Chip Set,” EE Times, December 5, 2003 (“Texas 

Instruments and STMicroelectronics have jointly announced an open, modular cdma2000 1x chip set [...]. The 

four-chip set is the first product realization to derive from the collaboration between the two companies ‘ and 

Nokia ’ [...].”). 

473 See, e.g., Krazit, Tom, “TI and STM Produce Samples of 3G CDMA Chips,” IT World Canada, June 24, 2004 

(“Texas Instruments Inc. (TI) and STMicroelectronics NV (STM) are producing samples of chips [...]. The 

new chips are based on the Evolution-Data-Voice (EV-DV) standard [...].”). 

474 See, e.g., Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband 

Exit,” Strategy Analytics, June 2009, p. 10 (“TI involved in a CDMA2000 1X chip development joint venture 

with Nokia and ST Microelectronics [...]. However, later TI, Nokia and ST Micro abandoned the JV.”). See 

also VIA-QCOM000638845–8846 at 8845 (“TI(2)[:] Entered in cooperation with Nokia; Abandoned 1x 

space.”). 

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several key engineers in 2000.475 EoNex’s first CDMA chip appeared in an LG 

handset in 2005, and while it was less expensive than Qualcomm’s high-end 

modem chips, it did not support EV-DO.476 According to internal materials of one 

of its competitors (VIA Telecom), the development cost of EoNex chips was 

“extremely high,” and the team was laid off in August 2008 when the company ran 

out of funding and filed for bankruptcy.477

238. As the examples above demonstrate, competitors struggled to keep up with Qualcomm’s 

development of CDMA chips. In 1999, Qualcomm sold its mobile device business to 

Kyocera478 and its infrastructure business to Ericsson,479 at least in part to avoid competing 

with its customers downstream in the mobile device business. Qualcomm started to focus on 

technology development and the design of modem chips and software.480 In 1995, Qualcomm 

formed the CDMA ASIC Products Unit (which in 1999 became Qualcomm CDMA 

 

475 See, e.g., Q2014FTC03368158–8159 at 8158, email from Gerald Skiver, Qualcomm, October 10, 2002 (“Dr. 

Chun was previously the head of Samsung’s internal CDMA modem design team. Dr. Chun left Samsung and 

several key engineers on his team also left to form the new company, Eonex Technologies.”). See also 

Q2014FTC03369222–9223 at 9223, email from Marv Blecker, Qualcomm, October 9, 2001 (“[...] EoNex, a 

venture startup launched last April by former researchers at Samsung Electronics Co., SK Telecom and other 

firms[...].”). 

476 Miller, Paul, “LG Goes with Korean EoNex over Qualcomm for CDMA Chips in SD280,” Engadget, December 

17, 2005 (“The Eonex chip is only 2.5G [...] but they’re cheaper than the Qualcomm alternative [...].”). See 

also “Global Cellular Handset & Chip Markets,” Forward Concepts, 2005, pp. 288–290. 

477 VIA-QCOM000638845–8846 at 8845 (“EoNex[:] [...] Chip cost extremely high, and out of funding. Team 

was laid off August 2008.”). See also Q2014FTC03819921–9923 at 9921, email from John Kim, October 29, 

2013 (“They [EoNex] are closed in 2009 and no activities at all as far as our team checked. Mtek bought Eonex 

CDMA equipment through auction and 4 key Eonex members are at Mtek as far as we checked.”) and email 

from Dave Jeon, October 29, 2013 (“I heard the same thing from our old SKT friend – EoNex went chapter7 

and MTK bought CDMA IP equity.”). 

478 See, e.g., “Qualcomm and KYOCERA Sign Agreement for Terrestrial CDMA Phone Business,” Qualcomm 

Press Release, December 22, 1999. See also I. Jacobs Deposition, p. 42 (“Q. And do you recall whether 

Qualcomm had sold its handset business at this point in 2000? A. I’m not firm on the dates. It -- I would think 

it had already sold its handset business, but I’m not sure -- to Kyocera.”). 

479 “ERICSSON and Qualcomm Reach Global CDMA Resolution,” Qualcomm Press Release, March 25, 1999. 

480 I. Jacobs Deposition, pp. 42–43 (“Q. In any event, would Qualcomm have been down the road of divesting its 

handset business if the sale [of its infrastructure business to Ericsson] had not been completed? A. [...] We 

made the decision strategically that we would focus on developing technology pressing the industry ahead, 

continue to expand the uses for mobile, for cellular, and that our best way of doing that was, again, to focus on 

the technology and on the -- embedding that in chips and software that we can make available to many 

manufacturers [...]. People would say: You’re going to give your best software and chips to your own 

company first -- even though we said we would not. And, therefore, it would not be a good supplier to us. And 

we thought [...] that could interfere with the spread of CDMA. And so we made the decision to divest. Q. Did 

you observe actual customers hesitant to engage with Qualcomm’s ASIC business because Qualcomm was 

competing with them at a downstream level? A. We had people that complained about it -- Samsung comes to 

mind.”). 

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Technologies (QCT) and also launched the business unit now known as Qualcomm 

Technology Licensing (QTL).481 QCT became responsible for “design[ing] and suppl[ying] 

CDMA chipsets and software solutions,” while QTL managed the licensing side of the 

business.482

239. When it came to CDMA, Qualcomm claimed to have “out-innovated and out-executed” its 

competitors for a long stretch of time.483 Even OEMs ultimately recognized the superiority of 

Qualcomm’s products over those of competing chip suppliers.484 Qualcomm’s well-targeted 

investment strategy enabled it to consistently develop new products, including many “firsts,”485

such as the first single-chip solution integrating analog and digital functionality 

(MSM2300),486 the first chip compatible with the CDMA2000 1X standard (MSM5000),487

the first chip compatible with CDMA2000 1xEV-DO (MSM5500),488 the first chip compatible 

 

481 See Qualcomm, “History,” https://www.qualcomm.com/company/about/history. 

482 See Qualcomm, Form 10-K, 1999, p. F-27 (“[QTL] provides licenses to third parties related to the design, 

manufacture and sale of products using the Company’s CDMA technology.”). 

483 Achour Deposition, Qualcomm, Exhibit CX6393, Q2014FTC04332009–2011 and p. 154 (“Q. Well, did you 

understand Qualcomm to be differentiated from its competitors with respect to modems that implement CDMA 

standards at any point in time? A. Absolutely. Yeah. Q. And this chart [on page CX6393-009] illustrates that 

Qualcomm was differentiated vis-a-vis its competitors with respect to CDMA standards from about 2000 to 

2015; is that right? A. Right. That’s correct. Q. Is that consistent with your understanding? A. Yeah, we 

always had a much better solution. We basically out-innovated and out-executed everybody else in competing 

with us.”). See also Q2014FTC04798968–9027 at 8977, presentation titled “Modem Update,” Qualcomm, 

October 31, 2016 (Slide titled “A history of technology firsts” states that “Qualcomm has consistently 

outperformed the competition. By the time a competitor launches, Qualcomm has already launched the next 

generation product.”). 

484 

485 Q2014FTC04798968–9027 at 8972, presentation titled “Modem Update,” Qualcomm, October 31, 2016. 

486 “Qualcomm Announces Next Generation Mobile Station Modem,” Qualcomm Press Release, March 3, 1997. 

487 “Qualcomm CDMA Technologies Announces World’s First Third-Generation Chip for CDMA Handsets,” 

Qualcomm Press Release, May 24, 1999. 

488 “Qualcomm CDMA Technologies Announces 1xEV High-Speed Data Chipset and System Software for 

Handsets,” Qualcomm Press Release, October 26, 2000. 

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with CDMA2000 1xEV-DO Rev. A (MSM6800),489 and the first chip compatible with CDMA 

1xEV-DO Rev. B (MSM7850),490 which included carrier aggregation. 

240. There are several reasons that may have kept some modem chip suppliers from prioritizing the 

resources necessary to compete with Qualcomm in CDMA. First, the population of subscribers 

on networks compatible with cdmaOne/CDMA2000 was relatively small compared to GSM 

and WCDMA,491 and it was expected to grow at a slower pace. Moreover, there was great 

uncertainty as to the future of CDMA, particularly in the 2010 to 2012 period as LTE was 

starting to be deployed.492 As Forward Concepts noted in 2011: 

CDMA2000 clearly is a viable and effective wireless technology and, to its credit, 

many of its innovations were brought to market ahead of competing technologies. 

Today, however, the GSM family has in excess of 3.8 billion subscribers – nine times 

the total number of subscribers in the CDMA2000 family of technologies.493

241. In addition, the sales of CDMA modem chips were not projected to grow as fast as the sales of 

chips compatible with competing standards. In 2013, the five-year compound annual growth 

rate (CAGR) across all CDMA-compatible modem chips (thin modems and modems integrated 

with APs, including backward-compatible multi-mode chips), was around 5 percent.494 For 

comparison, WCDMA-only modem chips (both thin modems and modems with an integrated 

AP) were predicted to grow more than twice as fast at 12 percent, while LTE-compatible 

 

489 “Qualcomm Announces On-Time Sampling of the Industry’s First CDMA2000 1xEV-DO Revision A Chipset,” 

Qualcomm Press Release, April 13, 2005. See also Amon Deposition, p. 297 (“Q. Who else other than 

Qualcomm could offer Rev A capability in modem chipsets? A. Qualcomm were the first.”) 

490 Murphy, Darren, “Qualcomm Unveils EV-DO Rev B Roadmap,” Engadget, March 27, 2007. 

491 Exhibit V.B.1 shows that CDMA-compatible handsets never accounted for more than 20 percent of global 

handset shipments. Investment research analysts at UBS considered WCDMA to be a more “material” 

opportunity relative to the CDMA “subscriber landscape”; see QAPPCMDS07754877–4878 at 4877–4878, 

email from Miran Chun, Qualcomm, August 5, 2015 (“We [UBS] believe [WCDMA] will be the biggest future 

opportunity for Qualcomm[]. Currently there are over 700 million non-cdmaOne subscribers (GSM and 

TDMA) that potentially could move to WCDMA. While we [UBS] acknowledge that the actual addressable 

market for WCDMA is far less than 700 million, it is still likely to be material relative to the current CDMA 

subscriber landscape. This is particularly true when considering the ASP of a WCDMA product is likely to be 

materially higher than the current ASP for cdmaOne/cdma2000lx [sic] products (i.e., about $200).”). In 2010, 

over 350 million WCDMA- and 1 billion GSM-compatible handsets were sold, but only 190 million CDMAcompatible ones (accounting for less than 14 percent of global handset shipments). 

492 As shown in Exhibit V.B.1, LTE-compatible handsets started shipping in meaningful volumes in 2012. 

493 “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 43. 

494 “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, pp. 37 and 211. 

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modem chips (excluding multi-mode LTE/CDMA chips) were forecasted to grow at 51 

percent.495

242. Finally, Exhibit V.B.4 depicts the uncertainty associated with cdmaOne/CDMA2000 sales 

forecasts. The black lines represent forecasts from Forward Concepts reports published 

between 2005 and 2013; lines clustered closely together indicate forecasts that remain 

consistent from year to year. The red line shows the estimate of the actual number of CDMAcompatible modem chips (including multi-mode chips) sold each year, as reported by Strategy 

Analytics. Prior to 2010, Forward Concepts expected sales to continue increasing at a steady 

rate from roughly 100 million chips in 2003 to about 250 million chips in 2012; these 

expectations were generally confirmed by the actual sales. However, starting in 2011, 

forecasts began to fluctuate widely: in 2010, the sales of cdmaOne/CDMA2000 chips in 2014 

were predicted to be at 300 million, but this estimate was cut in half to 151 million in the 2011 

forecast then raised to 206 million in 2012. 

243. The expectation of the upcoming obsolescence of CDMA was reinforced around 2011 by 

carriers operating CDMA networks:496 for example, 

97 Considering the relatively small number of CDMA-compatible 

mobile devices sold every year and the environment of uncertainty surrounding the future of 

 

495 “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 168. 

496 See, e.g., 

497 See, e.g., 86600DOC073410–3415 at 3411, email from Alexander Straub, Intel, March 1, 2011 (“Verizon 

targets to have the same coverage for LTE as CDMA by mid 2013 and plans to introduce LTE single mode 

connected devices by mid 2012.”). See also 

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cdmaOne/CDMA2000 networks, many modem chip suppliers were not internally unified 

regarding the best strategy to follow with respect to CDMA. For example, according to Intel’s 

Vice President and Chief Strategy Officer, Aichatou Evans, around 2010 Intel had internal 

disagreements on whether or not it was necessary to gain access to CDMA;498 by 2011, 

Verizon’s pitch of a “2013-LTE-only-story” was received positively by Intel,499 despite some 

employees at Intel warning that legacy technologies often last longer than initially predicted.500 

Email communications of MediaTek’s executives in December 2011 convey similar internal 

arguments: while 

.

501 Similarly, 

 

498 

 

499 

 

500 

501 

 

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 Some chip suppliers even 

attempted to actively “[i]nvest in measures to accelerate obsoleteness of CDMA 

[technology].”503

244. Mobile device OEMs also expressed doubts about the future of CDMA technology. 

 

d. Legacy cdmaOne and CDMA2000 in LTE networks 

245. As shown in Exhibit V.B.1, while annual sales of handsets supporting cdmaOne/CDMA2000 

increased until 2011, when about 230 million such devices were sold globally, the rest of the 

industry was growing at a faster pace. In 2011, cdmaOne/CDMA2000 handsets accounted for 

only 13 percent of global handset shipments, down from 20 percent in 2004. Since the 

emergence of 4G technologies around 2010, demand for single-mode CDMA chips has been 

 

502 SFT-07228696–8697 (Translation), “Samsung Electronics’s (S.LSI) Plan for Securing CDMA Solution,” 

Samsung, March 18, 2016

 

503 

 

504 

505 

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in continuous decline, with fewer than 11 million sold in 2016,506 and CDMA’s presence in 

modem chips has largely been confined to multi-mode LTE chips.507

246. At least three reasons explain the pace of obsolescence of CDMA. First, LTE, when launched 

by itself, does not facilitate transmission of voice calls, which creates a need for backward 

compatibility in 4G LTE mobile devices deployed on networks without VoLTE.508 Second, 

the deployment of VoLTE has faced delays and been “filled with false promises from carriers,” 

reinforcing the need for 4G devices to support earlier generations of wireless technologies in 

addition to LTE;509,510 at least some of these delays were due to the extensive and complex 

testing necessary to ensure correct functioning of the mandatory support for emergency 911 

calls.511 Lastly, with some carriers in important regions, such as China and the U.S., still 

depending on CDMA networks, modem chip suppliers and mobile device OEMs recognize the 

 

506 Strategy Analytics, “Baseband Market Share Tracker Q1 2018: Samsung LSI Overtakes MediaTek,” June 2018. 

507 Mahe Deposition, Apple, pp. 288–289 (“Q. And then you wrote [in Exhibit PX0358] maybe you have to make a 

hard call that we won’t support CDMA for 2016 iPhone; so either they support VOLTE, or they don’t get a 

2016 iPhone. [...A.] I had been trying to get all of the CDMA carriers to be more aggressive in pursuing voice 

over LTE. Q. And why was that? A. So we don’t have to support CDMA technology on these carrier 

networks.”) and Exhibit PX0358, APL-QC-FTC_00075234–5236 at 5234 (“For iPhone, the key risks are 

Spring, KDDI, and China Telecom. We will start pushing them to move to full VoLTE now including indoor 

voice coverage.. Maybe we have to make a hard call that we won’t support CDMA for 2016 iPhone so either 

they support VoLTE or they don’t get a[] 2016 iPhone..”). 

508 Eul Deposition, Intel, pp. 101–102 (“Q. And was there a relationship between when CDMA would be sunsetted 

and when Voice over LTE technology would become available? [...] Was there a connection, in your mind, 

between those two issues? [...] A. Yeah, the operators that were relying on CDMA technology would have to 

have some alternative to do voice calls, which pretty much was that’s what CDMA was good in. And so that 

means there needed to be an alternative, and VoLTE was contemplated as being the voice capability of LTE.”). 

509 Verizon initially planned to offer LTE-only devices in the 2012/2013 time frame but only managed to launch 

VoLTE in August 2014. See, e.g., 

 See also Seifert, Dan, “Verizon 

Announces Initial Rollout of VoLTE, HD Voice for the ‘Coming Weeks,’” The Verge, August 26, 2014. 

510 Welch, Chris, “T-Mobile Lights Up VoLTE in the US, AT&T to Follow Tomorrow,” The Verge, May 22, 2014 

(“For wireless customers in the US, the road to Voice over LTE (VoLTE) has been long and filled with false 

promises from carriers, but it’s finally here.”). See als

511 See, e.g., “Spirent Enhances Location Availability for VoLTE E911 Calls Indoors,” BusinessWire, August 6, 

2014 (“With large scale VoLTE rollouts imminent, leading operators are confronted with the need for extensive 

and complex testing of LTE positioning technologies to ensure VoLTE E911 works well from day one.”). 

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appeal of a single-chip solution that provides global roaming.512 

513 

.

514

247. Modem chip suppliers initially lacking CDMA capability, such as Samsung S-LSI and 

 struggled to quickly secure CDMA solutions in order to remain competitive.515 

 

512 See, e.g., “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 54 (“The largest 

remaining pockets of CDMA are: China, United States/Canada, China, SEA, Japan, and South Korea. The 

majority of larger operators have mostly transitioned to 3G EVDO RA or RB. Others such as the United States, 

South Korea and Japan are converting 3G CDMA/LTE and have longer term plans of moving to VoLTE.”). 

See also Cutress, Ian and Andrei Frumusanu, “Huawei Announces the HiSilicon Kirin 960: 4xA73 + 4xA53, 

G71MP8, CDMA,” AnandTech, October 19, 2016 (“The value of CDMA is mixed, although a required element 

with certain carriers in China and the US, such that Huawei can now offer devices with the Kirin 960 can 

compete.”); SFT-07228696–8697 (Translation), “Samsung Electronics’s (S.LSI) Plan for Securing CDMA 

Solution,” Samsung, March 18, 2016 

Amon Deposition, Qualcomm, 

pp. 327–328 (“Q. [...] You believe Apple was interested in multimode, despite the fact that the person 

responsible for the account told you they weren’t interested in multimode? [...] I was not interested in building 

CDMA single-mode. I wanted the CDMA to be multimode. [...] I wanted the CDMA carriers to be 

competitive and have their customers ability to have global roaming.”) 

513 SFT-07740063–0085 (Translation) at 0070, presentation titled “

 Samsung, February 20, 2016. 

514 See, e.g.,

 

 See also Hah, 

Robert et al., “Navigating the Smartphone Landscape: What Chinese OEMs Can Do to Outplay the 

Competition,” Accenture Strategy, 2017, p. 4 (“One significant aspect of this change is the rising proportion of 

phones sold directly to consumers. In China, over 60% of sales are now expected to come through open 

channels that do not require consumers to be tied to a carrier contract.”). 

515 See, e.g., SFT-07228696–8697 (Translation), “Samsung Electronics’s (S.LSI) Plan for Securing CDMA 

Solution,” Samsung, March 18, 2016

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Samsung S-LSI, for example, 

”516 Some modem chip suppliers, including MediaTek, and Samsung SLSI, initially 

248. In recent years, four modem chip suppliers have launched LTE chips that are backward 

compatible with cdmaOne/CDMA2000, as shown in Exhibit V.B.2, while others such as 

ST-Ericsson have considered such options.518 VIA Telecom enabled implementation of its 

 

516 SFT-07740063–0085 (Translation) at 0067, presentation titled “Securing of CDMA Solution and Review of 

Business Feasibility,” Samsung, February 20, 2016

517 See, e.g., 

 

). 

See also 

 

 

 Qian Deposition, Qualcomm, p. 103 (“Q. What were the available 

alternatives [for CDMA modem chips in 2013]? A. I think Via was still in the market at the time. Also, Via 

probably started to work with MTK to make their CDMA into MTK’s chipset as well. I think Huawei at the 

time, also HiSilicon.”) and p. 108 (“Q. What does MTK plus Via mean? A. I believe, at the time, the Via 

CDMA solution was not integrated yet to MTK’s SoC. So -- however, people can use a solution that it couples 

both MTK and a Via solution together to make a smartphone.”) 

518 

 

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CDMA technology in MediaTek’s chips via a collaboration in 2014,

519 before being acquired 

by Intel in October 2015.520 MediaTek released its first multi-mode LTE chip with CDMA 

support in mid-2015. Intel announced the CDMA-compatible XMM7560 chip in February 

2017, and the chip is expected to start appearing in phones later in 2018.521 

22 , 523 As discussed below in Section V.C.2, Intel 

executives claimed that Intel could have launched a CDMA-compatible multi-mode LTE chip 

even earlier had it not been for Apple’s reluctance for Intel to do so. HiSilicon independently 

developed its own CDMA solution, which it introduced in 2016 and implemented in its Kirin 

 

519 See, e.g., “MediaTek Adds CDMA2000 and Unveils Plans for WorldmodeTM Mobile Chipsets,” MediaTek 

Press Release, January 6, 2014. 

520 See, e.g., Goldstein, Phil, “Intel Continues to Pare Mobile Losses, Buys CDMA Modem Assets from VIA 

Telecom,” FierceWireless, October 14, 2015. See also Sections V.C.2 and V.C.11 for further details on the 

history of Intel, VIA Telecom, and the acquisition. 

521 See Section V.C.2 for further details regarding Intel’s re-entry into the CDMA segment. See also Hruska, Joel, 

“Intel Inside: Apple’s Next iPhone May Ditch Qualcomm Altogether,” ExtremeTech, February 6, 2018 (“‘[KGI 

Securities] expect[s] Intel to be the exclusive supplier of baseband chip for 2H18 new iPhone models [...].’ 

[...T]he XMM 7560, finally supports both CDMA and GSM bands.”); “Intel Unveils the Intel® XMMTM 7560 

Modem - Enabling the Next Generation of LTE Advanced Devices,” Intel News Fact Sheet, February 21, 2017. 

522 

523 

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960 chip. 524 In addition, Samsung S-LSI also released multi-mode chips with CDMA 

compatibility in early 2018, implemented in the Exynos 7872 and 9810 chips.525

e. CDMA Conclusion 

249. Qualcomm took advantage of its expertise in satellite-based communication technology and 

undertook a risky strategy of entering the mobile telecommunications industry and promoting 

a novel technology. Even as the industry was already pursuing TDMA-based technologies, 

Qualcomm persisted, invested millions in developing CDMA technology, and demonstrated 

its feasibility by providing an end-to-end solution. The experience gained in the initial stages 

of the process, from designing the technology and building prototypes of modem chips and 

mobile devices to manufacturing infrastructure equipment and supporting carriers during the 

deployment of their networks, gave Qualcomm an early advantage and positioned it well to 

outperform competitors in the future. The superiority of CDMA technology was ultimately 

recognized by the industry, and it was adopted as the basis of all 3G wireless standards. 

Qualcomm’s strategic R&D investments and ability to offer OEMs modem chips of superior 

performance ultimately benefitted the millions of end-users of mobile devices that experienced 

better call quality and higher data rates, as compared to other standards. 

250. Few of Qualcomm’s competitors succeeded in building modem chips of comparable 

performance and compact design. While some modem chip suppliers, such as LSI Logic/VIA 

Telecom, EoNex, and TI/Nokia, had limited success in East Asia, most failed to catch up and 

offer competitive products. Many vertically integrated OEMs could not keep up with the rapid 

technological progress and chose to stop the internal development of CDMA modem chips in 

 

524 Cutress, Ian and Andrei Frumusanu, “Huawei Announces the HiSilicon Kirin 960: 4xA73 + 4xA53, G71MP8, 

CDMA,” AnandTech, October 19, 2016 (“One of the more interesting announcements from the Kirin briefing 

was the implementation of CDMA in the modem. Currently three smartphone modem providers have CDMA 

solutions (Qualcomm in integrated and discrete modems, Intel with discrete, Mediatek with VIA-based 

integrated), and we spoke with HiSilicon to confirm that this is a brand new custom CDMA solution, rather than 

a licensed platform.”). 

525 Frumusanu, Andrei, “Meizu Announces M6s with Exynos 7872,” AnandTech, January 17, 2018 (“This is also 

the first time we’ve seen an Exynos SoC released with integrated CDMA capability [...].”). Frumusanu, 

Andrei, “Samsung Announces the Galaxy S9 and S9+,” AnandTech, February 25, 2018 (“Indeed the Exynos 

9810’s new modem supports CDMA.”). See also Section V.C.4 for further details regarding Samsung’s reentry into the CDMA segment. 

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favor of purchasing chips on the merchant market (e.g., , Sony, and Motorola) and 

often pursued development of modem chips compatible with other standards perceived to be 

in greater demand, such as GSM and WCDMA (e.g., Intel and Philips). In recent years, several 

suppliers decided to incorporate CDMA support into their LTE multi-mode chips, often 

targeting the Chinese market where the prevalent demand is for multi-mode mobile devices 

that can be used on any wireless network. As of March 2018, there were at least four modem 

chip suppliers other than Qualcomm offering multi-mode CDMA/LTE products. 526 

Qualcomm’s success in sales of CDMA modem chips is explained by industry factors, and in 

particular its foresight, strategic and efficient R&D investments, and consistent execution. 

Similarly, the recent rapid acquisition of CDMA capabilities by several of its competitors can 

be explained by their initial lack of foresight; after adjusting their expectations, they were able 

to add CDMA compatibility quickly and without considerable R&D resources.

2. WCDMA-compatible modem chips 

251. Qualcomm achieved further success developing 3G WCDMA technologies and modem chips. 

Furthermore, Qualcomm became a leader in chip integration and the SoC approach by 

combining many functionalities, such as the AP, multimedia, GPS, and connectivity features, 

into a single piece of silicon.527 Qualcomm continued to foster a culture of innovation and 

creativity among its engineers and maintained a reliable supply of chips with consistently high 

quality. Thus, Qualcomm again demonstrated that success in the modem chip industry could 

be achieved by responsiveness to market forces, well-targeted investments into innovation, and 

timely execution. 

 

526 Wyatt Deposition, Qualcomm, p. 64 (“Q. Who are Qualcomm’s CDMA competitors? A. So our CDMA 

competitors are MediaTek, Huawei, [Samsung’s] Exynos, Intel, Via..”) 

527 As discussed in Section III.E.1. integrated modem chips are sought by most of the major OEMs 

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a. Development of WCDMA technology and standards 

252. Despite the prevalence of TDMA-based mobile devices during the 2G era, CDMA became the 

underlying multiple access technology for all 3G standards.528 WCDMA, ultimately the most 

prevalent 3G wireless standard, emerged in the early 2000s and was a CDMA-derived variant 

that could be adapted to interface with the existing GSM infrastructure, easing the transition to 

3G for carriers with GSM-based networks.529 Just as the CDMA2000 1X standard evolved 

into CDMA2000 1xEV-DO, the family of WCDMA standards went through multiple releases, 

including UMTS in 2000, HSDPA in 2002, HSUPA in 2005, and HSPA+ in 2007.530

253. As the 3G standards were evolving, Qualcomm was actively trying to identify opportunities 

that could provide it a competitive advantage in this fast-paced industry.531 Qualcomm’s 

Senior Vice President of Modem Engineering, Baaziz Achour, stated that Qualcomm 

considered its contributions to the WCDMA standards to be important,532 particularly in the 

 

528 3G included three families of standards: CDMA2000, WCDMA, and TD-SCDMA. TD-SCDMA was 

developed and deployed in China. Chang, Lu, “TD-SCDMA and China 3G,” Marvell White Paper, January 

2012, p. 2 (“Today, there are three major 3G standards worldwide. Wideband Code Division Multiple Access 

(WCDMA), is a third-generation (3G) wireless standard, that was first published in the year 2000 [...]. 

WCDMA is the 3G technology used in the United States by AT&T and T-Mobile. CDMA 2000 and EV DO 

(Evolution-Data Optimized) were first published in 2002. [...] China [...] also developed their own 3G 

technology, Time-Division Synchronous Code Division Multiple Access (TD-SCDMA), part of the Universal 

Mobile Telecommunications System (UMTS).”). 

529 Mock, 2005, p. 133 (“The W-CDMA standard being put together in Europe focused exclusively on evolution 

from GSM, and some aspects of the design seemed to serve absolutely no purpose other than to make it 

incompatible with other networks in the United States and abroad. What Qualcomm saw, in effect, was an 

effort to perpetuate the success of GSM, not to open up to foreign competition, as the EU and the United States 

had politically agreed to do. [...] Moving forward in Europe meant selecting a technology that was closely 

aligned with GSM [...]”). 

530 “Introducing LTE-Advanced (Part 1),” The Engineer’s Portal to Green Design, available at http://www.lowpowerdesign.com/article_intro_lte-advanced_part1.html (Table 1, “Evolution of UMTS specifications”). 

531 See, e.g., Casaccia Deposition, Qualcomm, Exhibit CX6336, QNDCAL00244983–5010 at 4994, email from 

Lorenzo Casaccia, Qualcomm, June 8, 2011 with an attached presentation titled “Standards* Task Force, 3GPP 

input” (“Our attitude should be: ‘If we do not do this piece of work, someone else will & the opportunity will be 

taken by some other industry (i.e. non-cellular, non-wireless).’ If we move into an area and Ericsson or Nokia 

are not there, this does not mean that the area is dead; it means we may have a first-mover advantage!”). 

532 See, e.g., Achour Deposition, Qualcomm, pp. 35–36 (“Q. So who have been the major contributors to the 

WCDMA specification? A. The WCDMA specification, there were also quite a few. Nokia and Ericsson 

always, they always been the leaders in the -- in the standards. Lucent at the time was -- was also a big 

contributor. Nortel was a big contributor. [...] Samsung was also a big contributor. At the time Huawei was 

starting to become a serious contender in the standard to start paying attention and contributing to the standard 

as well in WCDMA. There are other small companies, but these are the big ones, yeah. [...] I’m sorry, TI. I 

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later data-focused iterations of the standard such as HSPA.533 

254. According to Qualcomm’s Baaziz Achour, Qualcomm had an effective internal organization: 

close interaction between engineers in Corporate R&D, who contributed to the wireless 

standards and often developed early prototypes, and engineers in QCT, who implemented 

modem chip technology, which ensured that the standards innovations would be feasible from 

an implementation perspective.535 The flow of engineering knowledge from Corporate R&D 

to QCT in general has helped Qualcomm transfer its experience from the standards 

development process into modem chip design. For example, when QCT engineers 

implemented a new standard into a product, they could benefit from the knowledge and 

experience of engineers from Corporate R&D, who had been building prototypes and working 

 forgot to mention TI. [...] Q. Has Qualcomm made contributions to the WCDMA standards? A. Yeah, I 

assume that was -- yeah, Qualcomm of course.”). 

533 See, e.g., Casaccia Deposition, Qualcomm, pp. 54–55 (“Q. You said [on p. 10 of Exhibit CX6336], referring to 

Qualcomm, ‘we were the main technology provider.’ Is that what you said? A . We were the main technical 

contributor for [...] HSPA. Q. And what do you mean by that? A. That’s the majority of foundational ideas 

that went into [...] HSPA and its evolutions were coming from Qualcomm.”). 

534 See, e.g.,

535 Achour Deposition, Qualcomm, pp. 20–21 

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on the standard contributions already for many years, allowing for faster and better 

implementation of features.536

b. Qualcomm’s development of WCDMA modem chips 

255. As Exhibit V.B.5 shows, in the early 2000s while continuing to promote CDMA2000, 

Qualcomm also entered the WCDMA segment as several carriers started to plan their 

transitions to WCDMA networks. While there were other WCDMA chip designs available, 

such as those developed by Nokia and NTT DoCoMo, these were captive and not available to 

other OEMs. Japan’s operator NTT DoCoMo deployed a proprietary version of WCDMA and 

had an exclusive supply contract with NEC for WCDMA handsets.537 Similarly, Nokia had a 

captive WCDMA solution manufactured by TI.538

256. Building on its expertise in CDMA technology, Qualcomm was among the first modem chip 

suppliers to offer WCDMA chips on the merchant market. Qualcomm’s lack of experience 

with TDMA technology and lack of GSM chips in its product lineup presented challenges that 

Qualcomm ultimately overcame. While other modem chip suppliers could draw on their 

experience in designing GSM-compatible chips, Qualcomm’s initial WCDMA chip 

(MSM5200) was not backward compatible with GSM networks, which limited any potential 

 

536 Achour Deposition, Qualcomm, pp. 173–174 

537 “Global Cellular Handset & Chip Markets,” Forward Concepts, 2005, p. 50 (“NTT DoCoMo was the first 

operator to deploy a proprietary version of WCDMA, called FOMA (Freedom of Mobile Multimedia Access), 

in October 2001 [...].”). NEC, Annual Report, 2001, p. 18 (“NTT DoCoMo has selected NEC to provide all the 

building blocks for its commercial W-CDMA system, including handsets, radio access networks and core 

networks. In September 2000, NEC Networks started supplying NTT DoCoMo with commercial systems for 

W-CDMA.”). 

538 Yoshida, Junko, “Group Endorses 3G Handset Criticisms,” EE Times, February 25, 2004 (“[The] Nokia 6650 

[is an] early example[] of [a] 3G handset[] designed more than two years ago. [...It] incorporates Texas 

Instruments’ baseband/application processor [...].”). See also “Global Cellular Handset & Chip Markets,” 

Forward Concepts, 2005, p. 294 (WCDMA baseband chip suppliers section notes that “Nokia WCDMA 

solution is captive”) and p. 304 (“Although TI is the clear leader in DSP baseband chips, worldwide, their 

biggest play is through Nokia, which is responsible for their own intellectual property in Nokia phones.”). 

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first-mover advantage for Qualcomm.539 An industry report published by Forward Concepts 

estimated the number of WCDMA modem chips sold in 2004 to be 17 million, or less than 3 

percent of the roughly 700 million handsets sold globally.540 While Qualcomm reportedly 

already signed up 21 vendors for its MSM6250 chips at that time, its sales only accounted for 

28 percent of the global shipments, or fewer than 5 million chips.541

257. As described in Section III.E.1.c.i, the emergence of smartphones in the mid-2000s created 

demand for modem chips with more processing power, compact design, and power efficiency, 

spurring the development of increasingly integrated chip solutions.542 A 2005 report by 

Forward Concepts also identified integration as one of the necessary steps for widespread 

adoption of WCDMA: “Achieving higher levels of integration and simpler system designs in 

succeeding generations of UMTS handsets are critical in making UMTS products profitable 

for both handset makers and wireless service providers.”543 SoCs had advantages in terms of 

 

539 “Qualcomm CDMA Technologies Announces IMT-2000 WCDMA Single-Chip Solution for Handsets,” 

Qualcomm Press Release, November 8, 2000. Qualcomm announced its first WCDMA modem chip also 

compatible with GSM (MSM6200) in February 2002; this chip started to appear in devices within two years. 

See, e.g., “Qualcomm Provides UMTS/GSM/GPRS Solutions for European Market,” Qualcomm Press Release, 

February 19, 2002. See also Qualcomm, “MSM6200TM Chipset Solution,” 2003, available at 

https://en.wikichip.org/w/images/e/e6/msm6200_chipset.pdf; Qualcomm, Form 10-K, 2004, p. 10 (“We began 

shipping samples to customers of the MSM6200 integrated circuit in June 2002, and to date several customers 

including Samsung, LG Electronics, Sanyo, Option and Novatel Wireless, have introduced mobile phones[.]”) 

540 “Global Cellular Handset & Chip Markets,” Forward Concepts, 2005, pp. 295 and 559. 

541 “Global Cellular Handset & Chip Markets,” Forward Concepts, 2005, pp. 294–295 (“WCDMA platform leader 

Qualcomm has already signed up 21 vendors for its MSM6250 chipset (including Samsung, LG, and Sanyo).”). 

542 While most mobile device OEMs preferred integrated solutions, Apple is unique among major OEMs in seeking 

thin modems and supplying its own external APs. See, e.g., Achour Deposition, Qualcomm, pp. 105–106 

(“Apple is the only company that actually ships smart phone with disintegrated modem. Everybody else use[s] 

integrated. Whether it’s ours or theirs, it’s all integrated. MediaTek, they do integrated modem, and they’re 

selling two phones in China. Huawei uses their internal modem to integrate into their MSM-like product. 

Samsung, they use our[] MSM, which is integrated modem, or their own internal MSM as well. So it’s all 

integrated. Most of the smart phones, they’re using integrated modem; except for Apple, that’s disintegrated, 

because I guess they want to keep the AP separate from the modem because the AP is very -- you know, it’s 

done by Apple internally. I don’t know their reasons, but obviously they don’t -- probably I would guess it’s 

much harder to integrate a modem from someone else into their product. 

543 “Global Cellular Handset & Chip Markets,” Forward Concepts, 2005, p. 295. 

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cost and performance and took up less of the valuable space in a device.544 Unlike many of its 

competitors that previously focused exclusively on manufacturing individual components 

(such as thin modems or APs), Qualcomm had years of experience providing SoCs, giving it 

a unique advantage in leading the integration of modem chip products.545 Qualcomm’s success 

in integrating features is a reflection of its history of highly integrated designs, willingness to 

take educated risks, and ability to execute. It was also the result of strategic and long-term 

R&D process.546

258. The integration of modem chip products happened in two stages, and Qualcomm was at the 

forefront of each. In the first stage, GPS and multimedia features were integrated. For example, 

in 2000, Qualcomm acquired SnapTrack, a firm with experience in GPS, and by 2002, 

Qualcomm had developed its own GPS processor, which was integrated into later models of 

its chips. 547 By 2003, Qualcomm’s chips integrated a CPU, a WCDMA modem chip, 

multimedia features, and a GPS unit.548 In the second stage, the modem chip was also 

 

544 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2006, p. 126 (“The 6250 [modem chip 

produced by Qualcomm] integrates an applications processor and associated memory inside the package, 

significantly reducing bill-of-material costs, board size and power consumption.”). 

545 02014FTC04798968-9027 at 8969, presentation titled “Modem Update,” Qualcomm, October 31, 2016 

 at 8998 

546 For example, it took six or seven years to commercialize the initial version of carrier aggregation, see Grob 

Deposition, Qualcomm, pp. 199–200 (“Q. Now, a project like that, you said it started in 2001 or 2002, 

approximately? A. The carrier aggregation part of it. Q. And how long did it take until it was commercialized? 

A. Six or seven years.”). 

547 “Qualcomm Completes Acquisition of Wireless Location Leader SnapTrack.” Qualcomm Press Release, 

March 2, 2000. “Qualcomm Announces Advanced Position Location Capabilities for WCDMA/UMTS and 

GSM/GPRS Systems,” Qualcomm Press Release, February 5, 2002. 

548 In 2003, Qualcomm introduced the MSM6250 chip, “a single-chip solution that includes all the advanced 

multimedia capabilities” and that also included fully integrated GPS; by 2005 this solution has been 

implemented in a large number of WCDMA devices. “Qualcomm Announces Sampling of the MSM6250 

Solution for WCDMA (UMTS), GSM and GPRS,” Qualcomm Press Release, August 6, 2003. Qualcomm, 

Form 10-K, 2005, p. 10 (“More than 110 WCDMA/HSDPA devices based on Multimedia Platform MSM6250 

and Enhanced Multimedia Platform MSM6275 integrated circuits are currently either in design or are 

commercially available.”) 

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integrated with an AP. As shown in Exhibit V.B.5, Qualcomm was among the first modem 

chip suppliers to introduce a WCDMA chip with an integrated AP (MSM7200) in 2006.549 

259. Apart from mobile devices, Qualcomm also marketed its SoCs to data card vendors, whose 

products were used in laptops to connect to the cellular network. Data cards required the fastest 

modem chips to address the demand for high-speed connectivity, and Qualcomm’s products 

were well positioned to meet these needs.550

c. WCDMA modem chip sales 

260. Exhibit V.B.1 depicts global WCDMA-compatible handset sales, which increased from 

roughly 20 million devices in 2004 to just over 550 million in 2012. In addition, Exhibit V.B.6 

shows sales of WCDMA modem chips (excluding multi-mode LTE/WCDMA chips) by 

supplier over the past decade. As the large number of suppliers and the emergence and decline 

of certain suppliers demonstrate, the competition in the WCDMA modem chip segment has 

been intense. 

261. Qualcomm entered this segment gradually, with sales of fewer than 5 million chips in 2004.551 

However, it was able to leverage experience accumulated from years of its development of 

CDMA chips and pursuit of compact chip design to offer competitive, integrated, and 

backward-compatible WCDMA solutions with desirable features in a timely manner. 

 

549 See, e.g., “Qualcomm Announces Industry’s Leading WCDMA and HSDPA Chipset and Software Solutions,” 

Qualcomm Press Release, February 15, 2005. See also “Qualcomm UMTS/HSDPA Solutions Selected by 

More Than 30 Wireless Industry Leaders for More Than 120 Devices,” Qualcomm Press Release, February 9, 

2006 (“Qualcomm expects to sample the industry’s first HSUPA-capable chipset in the first quarter of calendar 

year 2006. The MSM7200TM will support UMTS, HSDPA and HSUPA networks with backward compatibility 

to GSM/GPRS/EDGE and features advanced multimedia, connectivity, position location and data 

capabilities.”). 

550 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 158 (“Qualcomm’s Rev. B chipsets 

deliver advanced functionality in a single compact, fully optimized device. The first commercial EV-DO Rev. 

B products are data modems (data cards) that became available in late 2007, with additional wireless devices 

available in 2008.”) and p. 194 (“Qualcomm has been successful in capturing a majority of the combined 

CDMA and UMTS/HSxPA [data] card market. With a three-chip solution (2 RF die and a combination 

application/baseband processor die[)], all in a single package for the Laptop PC market, which reached 10 

million in sales in 2007.”). 

551 Calculated as 28 percent of 17 million WCDMA modem chips. See “Global Cellular Handset & Chip 

Markets,” Forward Concepts, 2005, p. 295. 

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262. As Exhibit V.B.6 shows, by 2008, Qualcomm joined TI as one of the leading WCDMA chip 

suppliers. Qualcomm’s sales of WCDMA modem chips continued to grow quickly, from 

roughly 80 million chips in 2008 to 300 million in 2011. Over the years, Qualcomm faced 

many other competitors in the WCDMA segment, including Infineon/Intel and Broadcom. 

553

263. More recently, the competitive landscape in the WCDMA segment shifted due to the entry of 

low-cost chip suppliers such as MediaTek and Spreadtrum. These modem chip suppliers 

 

552 

 

553 

 

 

 

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introduced the concepts of reference designs and turnkey solutions, giving OEMs a way to 

implement mobile device solutions quickly and cheaply but with limited flexibility.554 When 

coupled with their focus on emerging markets, they managed to increase their modem chip 

sales rapidly. While MediaTek and Spreadtrum entered the WCDMA segment relatively late, 

in 2010 and 2013, respectively,555 by 2015 they had captured two-thirds of all WCDMA chip 

sales (without LTE compatibility).556 Some modem chip suppliers have struggled to respond 

to the competition from these low-cost chipmakers. For example, 

.”557

d. WCDMA Conclusion 

264. Despite a lack of experience with GSM standards, within a year of its first WCDMA-only 

modem chip, Qualcomm managed to offer a backward-compatible chip integrating WCDMA 

and GSM technologies. Qualcomm also recognized and responded to customers’ demands for 

increased integration. It was among the first chip suppliers to offer a WCDMA SoC, and its 

chip solutions generally also integrated other advanced functionalities such as GPS and 

multimedia support. Qualcomm’s responsiveness to the demands of industry participants and 

its engineering prowess allowed it to produce reliable high-performance chips and to 

strengthen its position in WCDMA. Qualcomm’s success in sales of WCDMA modem chips 

is fully explained by industry factors, namely its foresight, strategic and efficient R&D 

investments, and execution. 

3. LTE-compatible modem chips 

265. As a new generation of wireless technologies began to be deployed around 2010, Qualcomm 

again demonstrated foresight and the ability to respond to industry demands; accompanied by 

strategic investments in R&D and M&A activity, Qualcomm brought to the market high-

 

554 See Sections V.C.3 and V.C.10 for additional information on MediaTek and Spreadtrum, respectively. 

555 See Exhibit V.B.5. 

556 See Exhibit V.B.6 and associated backup. 

557 

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performance, backward-compatible, integrated chips with advanced functionalities and low 

power requirements before many of its competitors did. For example, Qualcomm was among 

the first modem chip suppliers to release an LTE modem chip in 2010 and an LTE chip 

integrated with an AP in 2012.558 Unlike other suppliers that were only producing LTE modem 

chips that had to be paired with other components to achieve compatibility with 3G, 559

Qualcomm was producing 3G/4G multi-mode chips from the start: its first LTE chip 

(MDM9200) was backward compatible with WCDMA, and its MDM9600 announced within 

a year was compatible with both CDMA and WCDMA.560 As in previous generations of 

wireless standards, Qualcomm’s success in LTE was the result of its responsiveness to market 

demands, strategic and efficient investments, and strong execution. 

a. Development of LTE technology and standard 

266. The introduction of new technologies during the transition to 4G presented firms in the industry 

with opportunities for leapfrogging of competitors but also created challenges for firms that 

lacked foresight or did not target their investments appropriately, just like previous transitions 

in the wireless communications industry.561 The three main candidate systems that were 

considered included UMB (Ultra Mobile Broadband), LTE, and WiMAX.562

 

558 See Exhibit V.B.7. 

559 For example, Altair Semiconductor’s FourGee 3100 and GCT Semiconductor’s GDM7240 modem chips, which 

were shipping in 2010, were not backward compatible with 3G standards. See, e.g., “Cellular Handset & Chip 

Markets,” Forward Concepts, 2011, p. 129 (“[...Altair] announced three LTE chips that began shipping in small 

quantit[ies] by Q4 of 2010 [...]. The FourGee 3100 LTE is a Cat-3 baseband in addition to [providing] support 

for other 4G/OFDM technology variants, including WiMAX and Japan’s XGP.”) and p. 174 (“[...GCT 

Semiconductor’s] GDM7240 supports LTE Category 3 with high performance throughputs of 100Mbps [on the] 

downlink and 50Mbps [on the] uplink [...]. [The] GDM7240 is in volume production and is currently used in 

one of Verizon Wireless’ released 4G USB data modems.”). 

560 See, e.g., “Modem Evolution,” CTIA Special Session, May 8, 2012, p. 4 (MDM9200 is shown as supporting 

LTE Cat 3, DC-HSPA+, and EDGE; MDM9600 shown as supporting LTE Cat 3, DC-HSPA+, DOrB, and 

EDGE). See also “Qualcomm’s Snapdragon Processor and LTE Modem Power Connectivity Devices on 

Verizon Wireless’ New 4G LTE Network,” Qualcomm Press Release, January 5, 2011 (“Qualcomm’s 

MDM9600 chipset [...] supports theoretical LTE data rates with full backward compatibility to EV-DO Rev. 

A/Rev. B.”). 

561 APL-QC-FTC_18390703–0707 at 0704, email from Ruben Caballero, Apple, April 14, 2014 (“As you know 

Wireless is an entirely different ball game and every time wireless technology makes a leap the players change. 

Take example of TI who had a huge lead in 2G but failed to make 3G modem.”). 

562 Panzer, Justin, “And They’re Off! WiMAX, LTE, UMB, and the Race to 4G Wireless,” Electronic Design, 

October 24, 2007. 

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267. Starting in the mid-2000s, industry participants began developing two of the candidate 4G 

systems, UMB and LTE, based on an alternative multiple-access technology known as 

OFDMA.563 Qualcomm began working on UMB in 2005 but halted its development in 2008 

when UMB had not garnered support among carriers and the industry was moving in a different 

direction towards LTE. 564 , 565 In addition to its own internal research efforts advancing 

OFDMA, Qualcomm also acquired Flarion Technologies (“Flarion”) in 2006 for around $600 

million.566 According to Qualcomm’s then-CEO Paul Jacobs, Qualcomm intended to use 

Flarion’s OFDMA expertise in order to strengthen its position in the uncertain environment.567 

By 2007, Qualcomm had filed over 1,400 U.S. and 5,300 foreign patents related to the 

 

563 See, e.g., Yapp, Edwin, “A Brief History of LTE,” Digital News Asia, April 30, 2013 (“The official 

development of LTE began in 2005 after Japanese operator NTT DoCoMo proposed a next-generation wireless 

standard that would seek to unify the somewhat fragmented wireless standards that had been in existence to 

date.”). Note that UMB was considered the next evolution of CDMA2000 and used CDMA for the uplink. 

See, e.g., Drucker, Elliott, “End of the Road for CDMA?,” WirelessWeek, June 1, 2008 (“Apparently 

succeeding CDMA as the air interface technology of choice is orthogonal frequency division multiplex 

(OFDM). Both LTE and UMB rely on OFDM to provide the potential for very high data rates, particularly in 

the downlink. However, UMB does retain a CDMA channel structure for the uplink. LTE, like the third 4G 

technology competitor WiMAX, uses OFDM exclusively in both the downlink and uplink.”). 

564 UMB was developed by Qualcomm between 2005 and 2010. Qualcomm’s Form 10-K for 2008 notes that the 

“3rd Generation Partnership Project 2 (3GPP2) has developed the UMB (Ultra Mobile Broadband) standard.” 

Qualcomm, Form 10-K, 2008, p. 2. See also Willenegger Deposition, Qualcomm, pp. 245–246 (“[T]he amount 

of resource invested in UMB was significant. That was a full project within Qualcomm [...].”). 

565 See, e.g., Fleishman, Glenn, “Qualcomm Cancels Its Own 4G System,” Ars Technica, November 13, 2008 

(“Ultramobile broadband (UMB) is ultra dead. [...] Qualcomm said they would stop work on its fourthgeneration (4G) network technology UMB, and shift efforts to the GSM-based Long-Term Evolution (LTE) 

standard. [...] This was not unexpected [...] as no major carrier had committed to UMB.”). See also 

Qualcomm, Form 10-K, 2009, p. 6 (“We continue to develop and commercialize 3G CDMA-based technologies 

[...] and are working on commercializing the OFDMA-based LTE technology. [...] Multiple wireless 

operators, including AT&T and Verizon Wireless, have communicated their commitment to LTE as their next 

generation technology path.”). 

566 “Qualcomm Completes Acquisition of Flarion Technologies,” Qualcomm Press Release, January 19, 2006. 

567 See, e.g., Wise Deposition, Qualcomm, pp. 15–16 (“Q. And what was the reason for Qualcomm acquiring 

Flarion? A. As the industry was looking at the next generation, evolving from 3g to 4g, there was a debate over 

the modulation scheme and whether it would be CDMA or OFDMA, and we wanted to position ourselves to be 

ready for either. And Flarion had a leading -- a head start on the development of an OFDMA platform and a 

fair amount of OFDMA expertise that we thought would be helpful.”). See also “Qualcomm to Acquire Flarion 

Technologies,” Qualcomm Press Release, August 11, 2005 (“‘With this acquisition, Qualcomm will be in a 

stronger position to support advanced development in both CDMA and OFDMA technologies,’ said Dr. Paul E. 

Jacobs, CEO of Qualcomm. ‘The combination of Flarion and Qualcomm’s engineering resources greatly 

strengthens [Qualcomm’s] position as a continued technology innovator and leader in the wireless industry. We 

[Qualcomm] believe CDMA will provide the most advanced, spectrally efficient wide area wireless networks 

for the foreseeable future, but with Flarion we can now more effectively support operators who prefer an 

OFDMA or hybrid OFDM/CDMA track for differentiating their services.’”). 

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deployment of commercial OFDMA-based wireless technologies and was among the major 

contributors to the LTE standard.568

268. Support by network carriers for LTE over WiMAX was one of the drivers of Qualcomm’s 

success and the failures of some of its competitors. 

 

 

 

 

568 Qualcomm, Form 10-K, 2007, p. 2. See also Achour Deposition, Qualcomm, p. 36 (“Q. And with respect to the 

LTE standards, who have been the major contributors? A. The major contributors to the LTE standards; it’s 

Samsung, Huawei, Qualcomm, Ericsson. Nokia by that time is now becoming really weaker, so -- those are the 

main -- the main contributors to LTE.”). 

569 See Section V.C.2 for more details regarding Intel’s investment into WiMAX. 

570 Keddy Deposition, Intel, p. 73 (“Q. [...] Do you agree that Intel was not successful in persuading critical 

players, including network operators such as Verizon and China Mobile, to adopt WiMax? A. [...B]asically at 

the end of the day, Verizon didn’t use Intel and WiMax. And so we were one of the many players, and we 

could not convince Verizon to use WiMax. Yes, I agree.”). 

571 See, e.g., “LTE: The Future of Mobile Broadband Technology,” Verizon, 2009, Figure 9 and p. 16 (“LTE 

provides better global coverage and roaming capabilities, while maintaining compatibility with existing 2G and 

3G wireless networks”) and p. 10 (“The 4G channel offers four times more bandwidth than current 3G systems 

and is scalable. So, while 20 MHz channels may not be available everywhere, 4G systems will offer channel 

sizes down to 5 MHz, in increments of 1.5 MHz.”). 

572 Keddy Deposition, Intel, Exhibit QX73, INTEL-QCOM008077974–7987 at 7983, p. 74 (“Q. [...] Do you agree 

that Intel was not successful in persuading critical players, including network operators such as Verizon and 

China Mobile, to adopt WiMax? [...] A. [...B]asically at the end of the day, Verizon didn’t use Intel and 

WiMax. And so we were one of the many players, and we could not convince Verizon to use WiMax. Yes, I 

agree.”), and Exhibit QX74, INTEL-QCOM008124586–4587, email from Asha Keddy, Intel, June 25, 2015 

with attached presentation titled “5G CSD MCM Review,” Intel, June 18, 2015, p. 61 (States that the 

“[e]cosystem tipped with AT&T & Verizon backing LTE” and that despite a 2-year lead to the market, large 

incumbent carriers were hesitant to embrace WiMAX, as LTE was the “natural path” for GSM carriers.). 

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 As WiMAX failed to garner buy-in from carriers, the technology dwindled.574

b. Qualcomm’s development of LTE modem chips 

269. Qualcomm was in a strong position to compete in the LTE segment due to its strategic R&D 

efforts and, to a lesser extent, the learning and experience it obtained while contributing to the 

development of the LTE standard, such as its prototyping work. Similar to its competitors,575

Qualcomm channeled its engagement in the development of LTE technology into modem chip 

design through effective collaboration and transfer of knowledge between its Corporate R&D 

division and QCT, the chip-selling division.576

 

573 INTEL-QCOM001145202–5203 at 5202, email from Asha Keddy, Intel, November 7, 2012. 

574 Reed, Brad, “When It Comes to the U.S. Handset Market, LTE Has Landed a Knockout Blow,” Network 

World, November 2, 2011 (“The chief reason for WiMAX’s downfall in the consumer handset space is a simple 

one: [...] WiMAX wasn’t adopted by enough carriers to make it the de facto standard for 4G mobile data in the 

U.S.”). 

575 See, e.g., Keddy Deposition, Intel, pp. 213–214 (“Q. And what is the benefit of Intel from a technology being 

incorporated into a standard? [...] A. So when Intel works on items that get incorporated into the standard, it 

helps -- In general, it tends to be that we build consensus; but it helps, because it’s kind of like steering a car or 

something: You know where you’re headed. And, for example, the product engineers then would work with -- 

work very closely with my team. And one of the job functions I have is to transfer the knowledge to the 

product team. You know, the standards may have some things articulated, but there’s a lot of thought and 

debates and why we chose to do certain things in that context, what other people may have said to get that 

solution. And so we are able to provide that and we’re able to make better products and quick products.”). 

576 Corporate R&D had the Espresso program focused on developing the LTE standards. See, e.g., Achour 

Deposition, Qualcomm, pp. 190–191

 

). See also Thompson 

Deposition, Qualcomm, pp. 418–419

 

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270. As with prior technologies, Qualcomm again chose to be a technology leader in LTE.577 Its 

.

578 Over the period of eight years between 2010 and 2017, 

QCT spent almost $26 billion (or 23 percent of its revenue) on R&D.579

.

580 Qualcomm was able 

 

577 See, e.g., Mollenkopf Deposition, Qualcomm, p. 94 (“Q. Does Qualcomm also have a feature leadership in 

LTE? A. Yeah, I mean, throughout the years we have had feature leadership all over the place. [...O]ur 

business is to try to drive the industry forward, get feature leadership, and then get paid for it. LTE is an 

example, WCDMA was another example, and we continue to move it forward.”). See also Grob Deposition, 

Qualcomm, pp. 196–197 (“Q. And in your opinion, is there any other company that has an R&D department 

that’s a competitor to Qualcomm’s? [... A.] I don’t believe there’s another company that has the breadth that 

the Qualcomm R&D division has. [...] Not in [...] the field of wireless mobile Internet, the product space that 

we’re in. [...I]n the fields that we’re in, I think, there isn’t another -- one single example that has the scale and 

scope that we have. Q. Do you know why that’s the case? [...] A. It’s because the mobile products are highly 

sophisticated and contain many technologies -- the modem, but many other things -- and Qualcomm seeks to 

improve all of those technologies in the phone.”); Kressin Deposition, Qualcomm, p. 375 (“Q. And the more 

that Qualcomm invests in its technology, the better the Qualcomm technology becomes and the more difficult it 

is for other companies to catch up; is that correct? A. [...] I would say it’s not more difficult. You know, other 

-- other companies can invest however they want. But our -- our priority was to lead in technology. And then 

other -- other companies can compete however they like.”). 

578 See, e.g.,

 See also Zander Deposition, Ericsson, pp. 110–111 (“Q. And Qualcomm was carrying 

that larger R&D organization? A. Yes. Q. And was it able to come to market faster, as you described it, using 

the same specifications? A. When we compare it at that given point of time, yes, but that has of course differed 

over the years. Q. And how does the fact of a larger R&D organization facilitate a quicker time to market? A. 

It can allow you to run more development in parallel, and it can allow you to have more product in the portfolio 

so you can make more incremental steps and doing everything right in one product. Q. And having the larger 

R&D operations requires investment? A. Yes. Q. At the time we’re speaking of right now, 2014, 2013, 2014, 

did Ericsson have the same R&D investment as Qualcomm in developing the premium LTE modems? [...] A. 

I don’t know exactly how many engineers Qualcomm had at that time developing the modems. The 

understanding our team had was that Qualcomm was that made the 

same type of development.”). 

579 See Exhibit III.E.1 and associated backup and Qualcomm Inc., Form 10-K (2010 – 2017). Note that QCT R&D 

for Q4 2017 represents outlook as of July 2017. 

580 

 

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 As Qualcomm and Intel were both pursuing leadership strategies, their R&D 

expenditures greatly exceeded the budgets of fast followers, such as MediaTek and Broadcom, 

or chip suppliers following other strategies, such as Spreadtrum and Marvell.582

271. Consistent and targeted investments in innovation allowed Qualcomm to reach several 

important milestones:583

i. As shown in Exhibit V.B.7, Qualcomm was among the first chip suppliers to offer 

LTE chips and, unlike its competitors, Qualcomm incorporated backward 

compatibility with both 2G and 3G networks from the beginning.584

 

581 See, e.g.,

582 See Section III.E for discussion on R&D of various chip suppliers. 

583 This section is not intended to provide an exhaustive list of Qualcomm’s innovations. Among other 

innovations, for example, Qualcomm also addressed the issue of LTE cellular radio frequency band 

fragmentation through Qualcomm’s RF360 Front End Solution, which was the first device that allowed OEMs 

to develop handsets with worldwide LTE mobility across carriers. See, e.g., “Qualcomm RF360 Front End 

Solution Enables Single, Global LTE Design for Next-Generation Mobile Devices,” Qualcomm Press Release, 

February 21, 2013 (“Qualcomm[’s] RF360 Front End Solution [...is] a comprehensive, system-level solution 

that addresses cellular radio frequency band fragmentation and enables for the first time a single, global 4G 

LTE design for mobile devices.”). Qualcomm also advanced multiple antenna techniques for more capacity and 

extended the benefits of LTE Advanced to unlicensed spectrum through LTE-U, see Achour Deposition, 

Qualcomm, pp. 247–248. For other examples, see “LTE Advanced - Evolving and Expanding Into New 

Frontiers,” Qualcomm, August 2014, p. 7, available at https://www.qualcomm.com/media/documents/files/lteadvanced-evolving-and-expanding-into-new-frontiers.pdf. See also Malladi Deposition, Qualcomm, pp. 448–

450, discussing foundational contributions to LTE, including cell search procedure, modifications to power 

control, DRX and DTX cycles, and all IP network. 

584 See, e.g., “Modem Evolution,” Qualcomm, May 8, 2012, available at 

https://www.qualcomm.com/media/documents/files/ctia-special-session-modem-evolution.pdf, p. 4 (“World’s 

First Integrated LTE/3G Modem Chips” with reference to MDM9200, which supported LTE/HSPA+/EDGE, 

and MDM9600, which supported LTE/HSPA/EV-DO/EDGE). See also Achour Deposition, Qualcomm, 

pp. 82–84 (“Q. Is it consistent with your understanding that Qualcomm was unique in offering basic LTE in 

2011? [...A.] LTE was a novelty in 2011. It was really just starting. And at that time we were the only 

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ii. As shown in Exhibit V.B.7, Qualcomm was also the first chip vendor to offer an 

LTE chip with an integrated AP, the MSM8960, in production by 2012.585 This 

chip supported seven modes (LTE-FDD, LTE-TDD, UMTS, CDMA2000 1xEVDO, CDMA2000 1X, TD-SCDMA, GSM/EDGE) and allowed mobile device 

OEMs to offer global roaming.586

iii. In 2013, Qualcomm launched the MDM9x25 modem series, which included the 

first modem chips supporting LTE Category 4 and carrier aggregation.587 Carrier 

aggregation was becoming increasingly important because many network carriers 

around the world had discontinuous spectrum available and needed a way to 

aggregate the spectrum in order to deliver higher bandwidth.588 

.” 589 

 company that was able to deliver multimode LTE. So just taking LTE out of context is not really -- it’s not 

really -- it doesn’t do it justice, because really the -- a lot of the complications and the novelty that we worked 

on at that time is to work -- make LTE work with all the other technologies before it; you know, with CDMA, 

with WCDMA, with GSM, with TD-SCDMA in China, with all these other technologies. It’s actually seven 

different modes. And to make all these modes work together, because when LTE got deployed it was only 

deployed in certain cosmopolitan areas. And as soon as you drop out of downtown, there’s no LTE. So the 

user should not notice that the call dropped, so you have to make sure you handoff between the new technology 

and the old technology. So the crossing of these boundaries of new technology to old technology became -- it’s 

really kind of a breaker if you don’t do it right. So the multimode aspect is actually the most complicated thing 

that actually made all this possible [...].”). 

585 See, e.g., “Qualcomm Introduces World’s First Complete Multi-Mode 3G/LTE Integrated Solution for 

Smartphones,” Qualcomm Press Release, February 16, 2009. See also Koliander Deposition, Qualcomm, 

p. 220 (“Q. The 8960 -- was that a System on a Chip that had LTE? A. Yes. [...] MSM 8960 was our first SoC 

that included an application processor, as well as a cellular modem. Q. And it had LTE? A. It supported 

LTE.”). 

586 “Modem Evolution,” Qualcomm, May 8, 2012, available at 

https://www.qualcomm.com/media/documents/files/ctia-special-session-modem-evolution.pdf, p. 4. 

587 See, e.g., “Modem Evolution,” Qualcomm, May 8, 2012, available at 

https://www.qualcomm.com/media/documents/files/ctia-special-session-modem-evolution.pdf, p. 4 (“World’s 

First Integrated LTE/3G Modem with Cat4 and Carrier Aggregation” with reference to MDM9x25). See also 

“Qualcomm Third Generation LTE Chipsets Are First to Support HSPA+ Release 10, LTE Advanced with LTE 

Carrier Aggregation,” Qualcomm Press Release, February 27, 2012 (“The MDM9225 and MDM9625 chipsets 

are also the first to support LTE carrier aggregation and true LTE Category 4 [...].”). 

588 As already discussed in Section III.E.1.a, carrier aggregation allows carriers to aggregate multiple relatively 

narrow radio channels (in the same or different bands) and thus increase download speeds and network response 

times for users. See, e.g., “World’s First Mobile Device with LTE Advanced Carrier Aggregation Powered by 

the Qualcomm SnapdragonTM 800 Processor,” Qualcomm Press Release, June 26, 2013. 

589 

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Qualcomm’s Senior Vice President of Modem Engineering, Baaziz Achour, also 

considered carrier aggregation to be “very critical.”590

272. Qualcomm pursued a strategy of differentiation in many areas in addition to carrier 

aggregation.591 

.

592 Despite important investments in the 

technology and a strategy of innovation and leading-edge performance and features, 593

Qualcomm faced aggressive competitors (such as HiSilicon, Intel, and Samsung S-LSI) and 

was not always able to be first to market.594 For example, HiSilicon launched 4x4 MIMO 

ahead of Qualcomm.595

 

590 Achour Deposition, Qualcomm, pp. 70–71 (“So carrier aggregation as a feature by itself is very critical. The 

reason it is critical is because a lot of operators around the world don’t have the luxury of getting a good chunk 

of spectrum all in one piece. What they tend to get is 5 megahertz here, 10 megahertz here, 15 over here. So 

they have to have means to put all these chunks together to create [...] one big chunk of spectrum. Carrier 

aggregation is a means to actually collect these pieces and put them together. So in that case a lot of operators 

around the world have this problem, and they’re looking for a technology that allows them to aggregate these 

pieces of Swiss cheese spectrum they have to make it look like one big aggregate bandwidth to allow them to 

deliver high bandwidth.”). 

591 Mollenkopf Deposition, Qualcomm, pp. 117–118 

592 Achour Deposition, Qualcomm, Exhibit CX6386 (Q2014FTC03690064) at CX6386–016, email from Baaziz 

Achour, Qualcomm, September 11, 2012, with attached presentation titled “QCT Strategic Plan July 2012 Team 

Presentation”). 

593 Achour Deposition, Qualcomm, p. 92 (“Q. From your perspective is it a core strategy of Qualcomm to offer 

modems with leading edge features? A. That’s definitely our strategy, is to always push the envelope, always -- 

whether it’s performance or better power or better features, it’s always been our strategy we try to move as fast 

as possible and deliver much better quality than anybody else and -- and deliver that very quickly to the market, 

yeah.”). 

594 See, e.g., Thompson Deposition, Qualcomm, p. 77 

 and Exhibit CX6311 (Q2014FTC04815247) 

at CX6311-004 (Qualcomm, October 2, 2013 email, with attached presentation titled “QCT OpEx Control,” 

595 See, e.g., Achour Deposition, Qualcomm, pp. 90–91 (“Q. Is it consistent with your understanding that 

Qualcomm was the first to market with whatever was the most advanced version of LTE in 2013? [...] A. So, 

no. We have instances where -- for example, Huawei launched features before us. Actually, one key feature in 

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273. One of the challenges during the transition to LTE around 2010 was keeping up with the new 

releases of the various standards. LTE was rapidly evolving but many new features were still 

being added to older standards such as WCDMA, TD-SCDMA, and even GSM.596 Modem 

chip suppliers, including Qualcomm, had to consider which specifications and features to 

support and where to focus their effort and investments. 597 This moment presented 

opportunities for leap-frogging by firms that had good foresight and made the right strategic 

decisions, but it also presented a challenge because failures in foresight could have long-lasting 

consequences.598 With the benefit of hindsight, Baaziz Achour, Qualcomm’s Senior Vice 

President of Modem Engineering, believes Qualcomm made the right choices: 

 LTE is 4x4 MIMO. [...] I think it was in Japan, at least they had one -- one trial or one -- you know, they were 

the first to announce it before we had it working in all our products. So it’s not always -- most of the time we 

[...] try to move as fast as possible to introduce technology first in the market, but Huawei and Samsung have 

been very aggressive lately, and they were able to -- in some cases to actually launch something first.”). 

596 See, e.g., Achour Deposition, Qualcomm, pp. 161–163 (“Q. And when you say that the standard was coming 

out with a lot of new features [...] in the 2010 time frame, which standard are you referring to? A. I think it was 

definitely LTE, because LTE was evolving very quickly. There were a lot of things being added on top of the 

very first release of the LTE. WCDMA was still evolving, there were a lot of features that were being added to 

WCDMA. TD-SCDMA in China was also evolving at the same time. So we have all these technologies 

moving at different speeds forward and [...] to keep our multimode competitive, we need to basically spend 

money on every technology to upgrade it to the latest spec and that’s a lot of effort. So we had to basically put 

a plan together to serialize these things. And so basically it refers to at least three different technologies that 

were evolving at the time. Actually even GSM, I remember even GSM was evolving. It was still -- even 

though it was old technology, they were still adding features into the standard at that time.”). 

597 Achour Deposition, Qualcomm, p. 196 

598 See, e.g., Thompson Deposition, Qualcomm, pp. 80–81 

. For example, while Spreadtrum focused on older standards such as GSM and 

TD-SCDMA during the early years of LTE, it was able to successfully transition to WCDMA and LTE through 

acquisitions and partnerships with other companies (see Section V.C.10). In contrast, due to the technological 

inferiority of its LTE chips, Broadcom was unable to secure LTE design wins despite its success in WCDMA 

(see Section V.C.8). 

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[...W]e looked at all the different standards and we picked what we thought was 

important to focus on and that’s what we did. And it turned out to be [...] the right 

choice and now giving us leadership in the market. 

[...T]here were things we did not work on, we decided to defer to later because we 

didn’t have [...] bandwidth. But in looking back now in hindsight, you know, we made 

the right choice. It was not by accident. It was because we really have very good 

relationship with our customers’ customers in the market and we kind of read the 

market. We understood what was important.599

274. Qualcomm had a particular advantage when dealing with strain on the engineering resources 

in its modem chip development group within QCT. As discussed earlier, engineers from 

Corporate R&D occasionally assisted QCT engineers in implementing commercial versions of 

features. 

600 

This allowed Qualcomm to keep up with the fast pace of the industry and deliver on the 

schedule demanded by its customers. 

602 

 

599 Achour Deposition, Qualcomm, pp. 159–163. 

600 See, e.g., Achour Deposition, Qualcomm, pp. 181–183 

601 APL-QC-FTC_34007323–7336 at 7327, presentation titled “IMC Discussion Materials,” Apple, May 2015. 

602 Qualcomm Incorporated’s Objections and Responses to Federal Trade Commission’s First Set of 

Interrogatories, February 28, 2018, p. 44 

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.

603

275. Consistent with its leadership position during most previous transitions in the modem chip 

industry,604 Qualcomm remains one of the major driving forces of innovation as the industry 

moves closer to 5G.605 In October 2017, Qualcomm was first to achieve a 5G connection on 

a modem chip designed for mobile devices. 606 Qualcomm continues towards “[m]aking 

5G[ ]NR a commercial reality for 2019”607 and 

.

608 Qualcomm prides itself on this type of advanced “blue sky research” 

 

603 See, e.g., Thompson Deposition, Qualcomm, p. 343 

604 See, e.g., Mollenkopf Deposition, Qualcomm, pp. 158–159 

 

605 See, e.g., Thompson Deposition, Qualcomm, pp. 315–316 

 See also 

Willenegger Deposition, Qualcomm, p. 168

 

606 “Qualcomm Achieves World’s First Announced 5G Data Connection on a 5G Modem Chipset for Mobile 

Devices,” Qualcomm Press Release, October 17, 2017 (“The 5G data connection demonstration [...] achieved 

gigabit download speeds, using several 100 MHz 5G carriers [...].”). 

607 “Making 5G NR a Commercial Reality,” Qualcomm, April 2018, p. 14, available at 

https://www.qualcomm.com/media/documents/files/making-5g-nr-a-commercial-reality.pdf. 

608 Amon Deposition, Qualcomm, pp. 278–279 (“

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that is ahead of its time and without which progress in the modem chip industry and in the 

wireless telecommunication industry in general would fall behind.609

c. LTE modem chip sales 

276. Starting with the first shipments of LTE modem chips in 2010, devices using the new standard 

were sold predominantly in high-income countries, which rolled out LTE first.610 Exhibit 

V.B.8 depicts global sales of LTE modem chips by supplier, growing from essentially no sales 

in 2010 to over 1.5 billion modem chips in 2017. Qualcomm’s performance in the sales of 

LTE chips has been strong from the start, and ongoing investments in innovation and consistent 

execution positioned it well for continued success.611 Many major mobile device OEMs have 

sourced their chips from Qualcomm, including Apple, Samsung, Xiaomi, LG, Oppo, Vivo, and 

Huawei.612 Qualcomm’s power-efficient, high-performing products attracted interest from 

industry players and garnered hundreds of design wins, ending up in many high-end mobile 

devices.613

277. While Qualcomm’s sales of LTE modem chips grew rapidly following the deployment of LTE 

networks, they plateaued around 780 million chips in recent years.614 As Exhibits V.B.7 and 

 

609 Malladi Deposition, Qualcomm, pp. 25–26 

610 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 59 (“Seventeen operators have 

commercially launched LTE networks, in Austria, Denmark, Estonia, Finland, Germany, Hong Kong, Japan, 

Norway, Poland, Sweden, USA, and Uzbekistan.”). 

611 Thompson Deposition, Qualcomm, pp. 92–93 (“

612 Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker for Qualcomm: Parts 1 and 2,” 

April 6, 2018. 

613 See, e.g., Abazovic, Fuad, “Snapdragon 835 Expected to Exceed 820 Design Wins,” Fudzilla, January 8, 2017. 

For example, Qualcomm’s LTE modem chips were included in versions of Apple iPhone 5, Samsung Galaxy 

S5 and S3, Samsung Galaxy Note 3, Sony Xperia Z1, Nokia Lumia 625, 920, and 925, HTC One M8, and many 

other mobile devices. See SpecTRAX data, “SpecTRAX_Data_and_Analysis_2018_04_20.xlsm,” Strategy 

Analytics, April 20, 2018. 

614 See Exhibit V.B.8 and associated backup. 

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V.B.8 demonstrate, since the introduction of LTE, Qualcomm has faced an array of strong 

competitors pursuing a variety of strategies in order to offer competitive LTE products. These 

competitors included large companies with long histories in the semiconductor business and 

substantial engineering resources, such as Samsung, Intel, and Huawei/HiSilicon, but also fast 

followers such as MediaTek and Broadcom that targeted low-cost mobile devices, often in 

emerging economies. Finally, many other modem chip suppliers entered the LTE segment 

with limited prior experience in modem chip design, including Altair, Sequans, GCT, Leadcore, 

Renesas, and Nvidia. Qualcomm’s employees testified that Qualcomm was aware of, and 

actively monitoring, the product offerings of many of these competitors.615 

d. LTE Conclusion 

278. Qualcomm’s entry into the 4G segment was not straightforward. Just like its competitors, 

Qualcomm had to start working on a specific 4G technology years before the industry 

consolidated around a particular standard. Initially choosing a standard that was not adopted, 

Qualcomm had to pivot from UMB to LTE in order to not miss the opportunity to participate 

in the development and sales of 4G modem chips. Qualcomm’s strategy to become the industry 

leader in LTE technology allowed it to surpass the competition and remain at the leading edge 

of the industry. Qualcomm was among the first suppliers of LTE thin modems as well as the 

first suppliers of LTE chips with an integrated AP. As smartphones became smaller and faster, 

Qualcomm offered unparalleled solutions that required fewer chips and provided better power 

management and stronger performance. Qualcomm’s responsiveness to customer demands, 

 

615 See, e.g., Thompson Deposition, Qualcomm, pp. 103–104 

 See 

also Willenegger Deposition, Qualcomm, pp. 204–206 

); Kressin Deposition, 

Qualcomm, pp. 237–238 (

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extensive and strategic R&D investments, and exceptional execution fully explain its success 

in sales of LTE modem chips. 

4. Summary of Qualcomm’s experience 

279. In summary, Qualcomm’s successes in each generation of wireless standards can be fully 

explained by industry factors. 

280. Foresight: Qualcomm was alone in its decision to invest heavily in CDMA technology while 

other participants focused on TDMA technology. Qualcomm’s technical achievements during 

the initial stages of CDMA development, including its development of compatible modem 

chips, mobile devices, and network equipment, were integral to the commercialization of 

CDMA technology. As a result, Qualcomm was able to deliver high-quality products into the 

marketplace earlier than its competitors were. Qualcomm also retained this foresight during 

later generations of wireless standards. For example, it was able to participate in the 

development of technologies compatible with multiple wireless standards (CDMA2000, 

WCDMA, UMB, and LTE) in parallel and respond to changing industry dynamics in favor of 

WCDMA and LTE. Qualcomm’s foresight in pioneering CDMA technology served it well 

when the industry-wide expectations regarding obsolescence of cdmaOne/CDMA2000 

networks did not materialize and OEMs continued to demand multi-mode LTE chips with 

CDMA compatibility. Qualcomm demonstrated foresight in selecting both the wireless 

technologies and features of modem chips on which to focus its R&D. 

281. Investment: Qualcomm was able to back up its foresight with sustained, well-targeted, and 

efficient investments into the development of wireless technologies and modem chips. In the 

early years, Qualcomm invested heavily in the development of CDMA network technology, 

and these investments yielded benefits in many future generations of technologies that were 

built on CDMA. Qualcomm has been widely recognized for commercializing innovative 

modem chip technologies, and industry observers acknowledged that Qualcomm’s R&D has 

been particularly efficient. In addition to internal R&D, Qualcomm’s acquisitions also gave it 

access to certain technologies more quickly. For example, the acquisition of SnapTrack 

allowed Qualcomm to incorporate GPS technology into WCDMA and subsequent modem 

chips, while the acquisition of Flarion enhanced Qualcomm’s portfolio of OFDMA 

technologies. 

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282. Execution: Qualcomm’s foresight and strategic investments have been complemented by its 

ability to design high-quality products reflecting the latest developments in wireless standards 

and modem chip technologies and deliver them in a timely manner. Across several generations 

of wireless standards, Qualcomm consistently demonstrated its ability to quickly 

commercialize modem chip designs. Its timeliness and reliability of manufacturing led to 

many design wins from OEMs and helped it to stay at the forefront of the industry. Qualcomm 

continues to maintain its position of a widely-recognized technology leader as the mobile 

communications industry transitions into 5G. 

C. Outcomes for other modem chip suppliers 

283. In this section, I apply my analytic framework to each major competitor in the modem chip 

industry during the period of interest. As I describe below, the Industry Factors Hypothesis

explains entry and exit in the industry, as well as the performance of important industry 

participants such as Intel and MediaTek, without apparent room for Plaintiff’s arguments. In 

some instances, different industry factors have contributed to a different extent to the 

performance of each competitor with the passage of time or advancement in technology. I 

review each competitor in turn and show my findings for each factor in turn. Exhibits V.C.1 

to V.C.13 show supplier-level sales information for each modem chip supplier described below. 

Exhibit V.D.1, discussed further in the next section, summarizes my findings.

1. Infineon 

a. Background 

284. Infineon Technologies AG is a German semiconductor company that was spun off from 

Siemens AG in 1999.616 After Infineon became an independent entity, Infineon’s Wireless 

Communications group became responsible for modem chip production.617 Infineon quickly 

 

616 “Siemens Names Chip Spinoff Infineon,” EE Times, March 17, 1999 (“Siemens AG today said its 

semiconductor spinoff will be called Infineon Technologies AG when it is officially formed on April 1.”). 

617 Infineon, Form 20-F, 2001, p. 42 (“Our Wireless Communications business group designs, develops, 

manufactures and markets semiconductors and complete system solutions for a range of wireless applications 

[...]. Our principal products in the wireless communications market include standard and customized radiofrequency products and baseband ICs.”). 

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emerged as a leader in the development of RF transceivers and thin modems,618 selling these 

products as both standalone and integrated solutions.619 Infineon’s Wireless Solutions division, 

a later version of the original Wireless Communications group, 620 would eventually be 

acquired by Intel in 2011.621

285. Infineon’s wireless business strategy was not to lead the modem chip industry in technological 

sophistication or features, but instead to pursue a fast-follower strategy.622,623 According to 

Thomas Lindner, who worked in sales and product marking at Infineon,624 this meant that 

Infineon did not pursue opportunities to “exceed or to reach out too far beyond” the set of 

features customers were requesting, since the company lacked “the ambition to [...] add 

 

618 See, e.g., Infineon, Form 20-F, 2000, p. 10 (“In addition to our strength in wireline, we have an outstanding 

market position in wireless communications. We are number one in radio frequency ICs, and number two in 

baseband ICs for mobile phones.”). See also “Cellular Handset & Chip Markets,” Forward Concepts, 2005, 

p. 280 (“Infineon is noted as a leading supplier of RF components and baseband [processors] and is also a 

leading cellphone module supplier.”); “Cellular Handset & Chip Markets,” Forward Concepts, 2007, p. 131 

(“Infineon is the market leader in (non-captive) handset transceivers with more than 230 million units shipped 

in 2006.”). 

619 Eul Deposition, Intel, p. 31 (“Q. Did Infineon make and sell RF transceivers at this time? A. Yes. Q. And did 

Infineon often sell the RF transceivers together with baseband processors? A. We sold them together with the 

baseband processor, and we sold them standalone.”). 

620 Infineon, Form 20-F, 2009, p. 7 (“The Wireless Solutions segment designs, develops, manufactures and markets 

a wide range of ICs, other semiconductors and complete system solutions for wireless communication 

applications.”). 

621 “Intel Completes Acquisition of Infineon’s Wireless Solutions Business,” Intel Press Release, January 31, 2011 

(“Intel Corporation today announced that it has completed the acquisition of the Infineon Technologies AG 

Wireless Solutions (WLS) business.”). 

622 See Sections III.D and III.E for a general overview of the fast-follower strategy. 

623 See, e.g., Lindner Deposition, Intel, pp. 16–17 (“Q. And when you were at Infineon, did the Infineon Wireless 

division, in your understanding, pursue a fast-follower strategy? A. Yes.”). See also Eul Deposition, Intel, 

p. 53 (“Q. And do you recall that term being used to describe how Infineon’s wireless business positioned 

itself? A. There are people that like to do that.”); “Infineon Communication On The Move: Lehman Brothers 

3W Conference,” Infineon, June 1, 2005, p. 7 (“Strategic Re-Positioning of Infineon Communication[:] Mobile 

Phone[:] Fast follower, catching up in 3G and multimedia[.]”). 

624 See, e.g., Lindner Deposition, Intel, pp. 9–10 (“Q. All right. So you joined Comneon, the Infineon subsidiary, 

on January 1 of 2000? A. Right. Q. And what job position did you hold then? A. I’ve had different positions 

in sales, marketing and customer support. So I was heading and building up the sales and marketing 

department. [...] I continued with sales and marketing, heading the team; and also had a role in Infineon doing 

the software marketing within the Mobile Platform Group. [...] Q. And how long did you stay in the software 

area? A. I stayed in the software area until the summer of 2010 and then changed over to Infineon to the Entry 

Phone division and was taking care there for strategic planning and product marking.”). 

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something on top to get in a further leading position.”625 According to an industry observer, 

by waiting until a wireless technology had matured before attempting to release new 

products,626 Infineon might have been able to learn from and avoid the mistakes of suppliers 

that were leading the way with respect to technological innovation.627 

286. In 2000, Infineon released an early multi-mode modem chip implementing both GSM and 

GPRS.628 

. Infineon would 

go on to also supply chips for the iPhone 3G, iPhone 3GS, and iPhone 4 (GSM).630 In 2006, 

Infineon released the E-GOLDradio and E-GOLDvoice, two single-chip GSM solutions 

targeting low-cost devices,631 with Nokia selecting the E-GOLDvoice for a number of its entry-

 

625 Lindner Deposition, Intel, p. 17 (“Q. And what did you understand [a ‘fast-follower’ strategy] to mean? A. 

[...A]voiding to exceed or to reach out too far beyond so that every product during its lifetime had the right 

feature set. [...W]e had not the ambition to [...] add something on top to get in a further leading position.”). 

626 Eul Deposition, Intel, Exhibit QX98, INTEL-QCOM005246267 at p. 2 (Infineon, “The new world: ‘From Fast 

Follower to Leader,’” 2010, “Follower[:] Start development after specification freeze of standard[.]”). 

627 Olson, Parmy, “iPhone a Risk with Intel’s Latest Buy,” Forbes, August 31, 2010 (“[...] Infineon decided that by 

being a ‘fast follower’ of the new technology [3G], it might not make some of the mistakes that the leading 

players would.”). 

628 Infineon, Form 20-F, 2001, p. 38 (“In 2000, we [...] introduced the first dual mode GPRS/GSM single baseband 

chip.”). 

629 

630 

631 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2006, pp. 98–99 (“The E-GOLDvoice singlechip solution combines a baseband processor, RF transceiver, power management unit and RAM [...]. The chip 

is the heart of Infineon’s latest platform for ultra low-cost handsets, ULC2.”). See also “Cellular Handset & 

Chip Markets,” Forward Concepts, 2007, p. 174 (“Last year, Infineon unveiled its first- generation SoC 

platform for cheap phones [...]. The ‘E-GOLDradio’ platform reduced the number of components from 200 to 

100 by combining, among other things, the baseband and RF components into a single chip. [...] Later in 

2006, they unveiled ‘E-GOLDvoice’, its second generation ULC [...].”) and p. 199 (“Infineon’s single-package 

GSM baseband-radio E-GOLDradio and the world’s first GSM baseband-RF-PMU SoC E-GOLDvoice are 

enabling a Bill-of-Material (BOM) [cost] below $16 for a GSM, voice & SMS-only handset.”). 

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level handsets.632 In 2007, Infineon acquired LSI Corporation’s Mobility Products Group, 

which had previously belonged to Agere, giving it access to Agere’s line of EDGE modem 

chips.633 Infineon also developed 2G and 3G modem chips that appeared in handsets released 

by OEMs like LG and Samsung,634,635 but it did not develop a modem chip that was CDMA 

compatible.636

287. In 2010, as LTE was emerging as a 4G standard, 

637 , 638 In November 2010, Infineon acquired Germany-based Blue Wonder

Communications and all its employees, citing the belief that “Blue Wonder’s special LTE 

know-how complement[ed] the long-standing LTE development activities of [Infineon].”639 

 

632 Hammerschmidt, Christoph, “Nokia Uses Infineon Chip for Entry-Level Phones,” EE Times, February 7, 2007 

(“[...] Nokia Corp. has selected Infineon Technologies AG’s E-Goldvoice line of single-chip solutions for some 

of its entry-level GSM phones.”). 

633 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 126 (“In August 2007, [Infineon] 

entered into an agreement to acquire the Mobility Products Group of LSI Corporation, which provided it with 

the Agere Systems EDGE baseband solutions sold to Amoi, NEC and Samsung.”). See also LaPedus, Mark, 

“Infineon Buys LSI’s Mobility Product Line,” EE Times, August 20, 2007 (“LSI’s Mobility Products Group 

comprises mainly mobile radio baseband processors and platforms that complement Infineon’s existing 

portfolio. [...] Originally, LSI’s Mobility Products Group belonged to Agere Systems.”). 

634 Hammerschmidt, Christoph, “LG Electronics Selects Infineon Mobile Platform,” EE Times, July 17, 2006 

(“Beginning with the recent introduction of new phones by LGE, Infineon’s MP-E platform [...] will be used in 

a series of EDGE mobile phones from LGE.”). 

635 “Cellular Handset & Chip Markets,” Forward Concepts, 2010, p. 82 (“Samsung is using Infineon’s complete 

3G-chip platform beginning with the very successful Galaxy S in 2010 [...].”). 

636 Evans Deposition, Intel, p. 33 (“Q. What did you learn about the status of [Infineon’s] modem development 

efforts? A. [...T]hey had a gap in CDMA [...].”). See also Wolff Deposition, Intel, p. 26 (“Q. Did any of these 

chips shown here [in Exhibit QX20] on this page (page 2) have CDMA compatibility? A. No.”); Wolff 

Deposition, Intel, Exhibit QX20, 86600DOC074395, p. 2 (Infineon, “Infineon WLS RS Platform Roadmap,” 

February 2010). 

637

). 

 

 

639 Infineon had been working on LTE modem chip development with Blue Wonder for about 18 months prior to 

the acquisition date. Clarke, Peter, “Intel to Acquire Dresden LTE Firm,” EE Times, November 3, 2010, 

(“Infineon’s wireless business unit [...] is taking over Blue Wonder Communications GmbH, a specialist in 

LTE communications. Blue Wonder (Dresden, Germany) was founded in 2008 and provides LTE intellectual 

property. [...] Infineon’s wireless business unit has been working with Blue Wonder for about 18 months on 

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640 

288. Intel announced its plans to acquire Infineon’s Wireless Solutions division in August 2010,641

and the deal was completed in January 2011. 642 

”643 As discussed in Section III.C, while pure-play suppliers 

dedicate their efforts to the production of a single input, broadliners can offer a variety of 

products and supply multiple inputs. 

644 The sale of the 

wireless group also allowed Infineon to prioritize its leading positions in its other business 

segments.645

 the development of baseband technologies for the Long Term Evolution (LTE) mobile standard [...]. ‘Blue 

Wonder’s special LTE know-how complements the long-standing LTE development activities of WLS.’”). 

640 

641 Leske, Nicola, and Noel Randewich, “Intel Buys Infineon Unit and Expands Wireless Offer,” Reuters, August 

29, 2010, available at https://www.reuters.com/article/us-infineon-intel-idUSTRE67Q3J820100830 (“[...] Intel 

Corp unveiled a deal [...] to buy German chipmaker Infineon Technologies AG’s wireless unit for $1.4 billion 

[...].”). 

642 “Intel Completes Acquisition of Infineon’s Wireless Solutions Business,” Intel Press Release, January 31, 2011 

(“Intel Corporation today announced that it has completed the acquisition of the Infineon Technologies AG 

Wireless Solutions (WLS) business.”). 

643

644 

645 Infineon, Form 20-F, 2010, p. 8 (“We have also actively pressed ahead with portfolio management in the last 

two years: [...] an agreement was signed in summer 2010 for the sale of the mobile phone business of the 

Wireless Solutions (WLS) segment to Intel. By taking these measures we focused Infineon on less volatile, 

rapidly growing target markets in which we occupy leading market positions.”). 

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b. Analysis 

289. Infineon’s outcomes in the modem chip industry can be explained by early alignment with 

demand despite poor long-term foresight, limited but well-targeted investment, and mixed 

execution. Much of Infineon’s success can be traced to its alignment with Apple’s initial 

specifications for the first-generation iPhone. However, Infineon never obtained CDMA 

technology and fell behind with respect to LTE development, which affected the company’s 

ability to retain its customers as new technologies were embraced. While Infineon never 

attempted to lead at the technological forefront of the industry and invested accordingly, its 

investment in business acquisitions helped expand its customer base. Finally, although 

Infineon excelled at developing robust low-cost solutions, Infineon’s willingness to provide 

customized solutions led to organizational inefficiencies, and Apple’s belief that Infineon was 

reluctant to dedicate resources to achieve leading-edge performance contributed to a negative 

perception from some employees at Apple. 

290. Foresight: Infineon was well positioned to compete for Apple’s business when Apple first 

began designing the iPhone, but it was ill prepared to supply chips to Apple once Apple’s 

technological requirements evolved. 

 

 

 

646 

 

648 

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177 

 

.

652,653

 

649 

 “Chips and Salsa IV: Making Strange 

Bedfellows,” Signals Ahead, Vol. 3, No. 5, March 7, 2006, pp. 6–7 (“Its S-GOLD2 coupled with the Broadcom 

(Zyray) WCDMA co-processor represents its first WEDGE solution. [...] S-GOLD3H integrates the 

WCDMA/HSDPA functionality, thus eliminating the need for a separate WCDMA/HSDPA co-processor. [...] 

The S-GOLD3H will be sampling mid-year and ramping into volume production in late 2007 for mid-tier 

handsets.”). 

650 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 163 (“X-Gold 206-PMB-8876 (S-GOLD2) is 

a three-chip Class 10 EDGE baseband platform: This is used in the Apple iPhone.”). 

651 

652 Olson, Parmy, “iPhone a Risk with Intel’s Latest Buy,” Forbes, August 31, 2010 (“[The Infineon wireless 

unit’s] most coveted client is Apple, for which it makes chips and from which it derives about a third of its 

revenue.”). 

653 See Exhibit V.C.14a. 

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291.

 

 

292. As testified to by Intel’s Aichatou Evans, Infineon did not pursue a leading position for LTE, 

instead opting to serve as an implementer that would wait until the market had matured before 

developing LTE capability.658 

 

 

 

 

 

657 Williams IH, Apple, pp. 30–31 (“Q. Following the introduction of Qualcomm cellular chipsets in the CDMA 

iPhone 4, is it the case that Apple only used Qualcomm chipsets [...] in every new model of iPhone launched 

from that point up through September 2015? A. Correct.”). 

658 Evans Deposition, Intel, pp. 33–34 (“Q. What do you mean by the term ‘fast follower’? A. [...T]he initial 

investment, seat at the table for leading edge did not seem to be what [Infineon] had chosen to do for LTE. 

They had chosen to let the market develop and then implement, essentially. So more of an implementor as 

opposed to a leadership setter [...].”). 

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293. Investment: 

 

 

 

 

659

 

 

 

 

 

 

 

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294. However, Infineon’s 2007 acquisition of LSI Corporation’s Mobility Products Group is an 

example of a strategic investment, which yielded widespread benefits. The LSI Corporation 

transaction not only gave Infineon access to Agere’s product line,665 but also possibly aided 

Infineon in winning future Samsung sockets. At the time of the transaction, Samsung was one 

of a few companies purchasing Agere’s EDGE modem chips from LSI Corporation and was 

purchasing RF transceivers from Infineon as well.666 Therefore, this acquisition presented 

Infineon with an opportunity to work more closely with Samsung on modem chip development, 

since Infineon would now be supplying Samsung with both modem chips and RF transceivers. 

Industry analysts also believed that the Agere assets would assist Infineon in developing 

competitive 3G products.667 Increased communication between Infineon and Samsung and 

improved 3G competency may have contributed to Samsung’s selection of Infineon’s 

XMM6080 modem chip in 2008 and its decision to use an Infineon chip in the Galaxy S in 

2010.668,669

295. Execution: Although Infineon’s low-cost offerings were desired by many mobile device OEMs, 

after its early wins, Infineon struggled to execute for Apple. Infineon’s 2006 E-GOLDvoice 

 

665 Agere was acquired by LSI Logic in 2007 and the new entity was named LSI Corporation. Shortly thereafter, 

LSI’s Mobility Products Group, which had previously belonged to Agere, was sold to Infineon. See Exhibit 

III.D.1. 

666 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 126 (“In August 2007, [Infineon] entered into 

an agreement to acquire the Mobility Products Group of LSI Corporation, which provided it with the Agere 

Systems EDGE baseband solutions sold to Amoi, NEC and Samsung. But, Samsung had already been buying 

EDGE transceivers from Infineon since 2006. [...] Infineon was already the RF supplier for many Agere 

platforms so the acquisition extends that partnership.”). 

667 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 126 (“[...] Infineon can use Agere’s resources 

to beef up its 3G development effort and attempt to win 3G business at other OEMs.”). 

668 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 173 (“[...] Samsung has committed 

to trying Infineon’s complete 3G-chip platform for 2008.”). See also “Samsung Selects Infineon HSDPA 

Platform for HEDGE Mobile Phone Family,” Infineon Press Release, April 23, 2008 (“Infineon Technologies 

AG today announced that Samsung Electronics, Inc., Seoul, Korea, has chosen Infineon’s HSDPA Platform 

XMM 6080 for their new family of HEDGE (HSDPA/EDGE) mobile handsets. [...] The platform includes the 

HSDPA/EDGE baseband, power management, single chip 3.5G RF transceiver and is complemented by 

Infineon’s protocol stack for HEDGE phones.”). 

669 “Cellular Handset & Chip Markets,” Forward Concepts, 2010, p. 82 (“Samsung is using Infineon’s complete 

3G-chip platform beginning with the very successful Galaxy S in 2010 [...].”). 

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was superior to competing products along multiple dimensions. First, Infineon drastically 

reduced the number of separate components needed for low-cost phones by integrating more 

components onto a single chip as compared to, for example, TI.670 Second, Infineon was able 

to offer the E-GOLDvoice at a lower price than competitors’ chips.671 Third, Infineon was 

able to target the E-GOLDvoice to customers in emerging markets by offering the most indemand features and stripping away unnecessary functionality. 672 As a result, Infineon 

realized great success with the E-GOLDvoice, a key example being the company’s 2007 entrylevel handset design win with Nokia,673 which took low-cost business away from TI.674 The 

Nokia contract, along with business from other OEMs such as ZTE and Huawei and 

tremendous growth in the demand for low-cost devices,675 enabled Infineon to ship 100 million 

ultra-low-cost chips in 2008 – up from 50 million chips in 2007 – and contributed to Infineon’s 

significant increase in chip sales from 2007 to 2008.676

 

670 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2007, p. 192 (“‘E-GOLDvoice’ [...] which 

shrinks the number of components to less than 50 and integrates power management and static random-access 

memory [...].”). See also “Cellular Handset & Chip Markets,” Forward Concepts, 2008, pp. 126–127 

(“Infineon actually has an advantage over TI in not requiring a separate Power Management Unit (PMU).”). 

671 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 126 (“Infineon’s E-GOLDvoice is the lowestcost GSM single-chip solution available today.”) and p. 232 (“[...T]he world’s first GSM baseband-RF-PMU 

SoC, E-GOLDvoice, are enabling a Bill-of-Material (BOM) costs below $16 for a GSM, voice & SMS-only 

handset.”). 

672 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, pp. 126–127 (“In this segment [Infineon] must 

compete with Texas Instruments with its GSM/GPRS LoCosto single-chip (baseband and RF) solution. On the 

surface, having support for GPRS may seem like an advantage, but these devices are primarily targeted at the 

entry level voice-centric GSM handset markets in emerging countries. [...] More important is the integration 

of the FM radio function, which has caught on in emerging markets [...]. Infineon is embedding this function 

in 2008.”). 

673 Hammerschmidt, Christoph, “Nokia Uses Infineon Chip for Entry-Level Phones,” EE Times, February 7, 2007 

(“[...] Nokia Corp. has selected Infineon Technologies AG’s E-Goldvoice line of single-chip solutions for some 

of its entry-level GSM phones.”). 

674 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 33 (“Nokia has diversified by announcing a 

low-cost, GSM single-chip deal with Infineon Technologies, which could eat into TI’s ‘LoCosto’ monolithic 

GSM chips.”). 

675 “Cellular Handset & Chip Markets,” Forward Concepts, 2007, p. 191 (“We expect that by 2011, almost one of 

every four handset shipped globally will be an ultra-low-cost handset. [...] We expect the ultra-low-cost 

(ULC) market to grow annually from 12-million units in 2006 to more than 175 million in 2010.”). 

676 See Exhibit V.C.1. See also “Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 197 (“The 

Infineon huge gain in sales was attributed to Nokia’s commitment (2/07) to use the monolithic ULC2 (EGoldvoice) for the new entry-level portfolio in 2008. [...] Nokia, ZTE, Huawei have all delivered low-cost 

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296. Despite this success, Infineon inefficiently duplicated efforts and spent substantial resources 

crafting customized products. 

.

677 However, being 

receptive to customization also had some negative consequences for Infineon. 

”678 

297. Finally, 

. In 2008, analyst and press reports 

noted problems with call drops for the iPhone 3G, with one report stating that these issues “are 

typical of an immature chipset and radio protocol stack.”679 

 

 GSM phones based on Infineon’s integrated chip. Infineon shipped 50 million in 2007 and 100 million in 

2008.”). 

677 

678 

679 INTEL-QCOM000695940, p. 5, presentation titled “IFX Comments on Articles Reporting Call Drops of 

iPhones,” Infineon, August 13, 2008. 

680 

 

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 Ultimately, Infineon’s Wireless Solutions 

division was acquired by Intel in 2011.684

2. Intel 

a. Background 

298. Founded in 1968,685 Intel is a large and sophisticated technology company with a strong 

position in the PC processor and server industry.686 By the mid-1990s, Intel became the largest 

supplier of semiconductors in the world, with about 85 percent of desktop computers 

worldwide using Intel processors. 687 Intel spent more than $10 billion in the mobile 

communications space between 1999 and 2006 through its acquisition of DSP 

 

681 

682 

683 

. 

684 Leske, Nicola and Noel Randewich, “Intel Buys Infineon Unit and Expands Wireless Offer,” Reuters, August 

29, 2010. See also “Intel Completes Acquisition of Infineon’s Wireless Solutions Business,” Intel Press 

Release, January 31, 2011. 

685 “Intel Timeline: A History of Innovation,” Intel (“1968[:] Noyce and Moore leave Fairchild Semiconductor and 

incorporate a new venture as NM Electronics. Later in the year, they purchase the rights to use the Intel name 

from a company called Intelco.”). 

686 See, e.g., Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?”, The 

Atlantic, May 16, 2013 (“Under [CEO Paul Otellini’s] watch since 2005, it created the world’s best chips for 

laptops, assumed a dominant position in the server market, vanquished long-time rival AMD, retained a 

vertically integrated business model that’s unique in the industry, and maintained profitability throughout the 

global economic meltdown.”). See also, Tanner, Paige, “Intel and AMD’s Duopoly in the PC Processor and 

Server Market,” Market Realist, January 15, 2016 (“AMD and Intel seem to have a duopoly in the PC processor 

and server market, with Intel accounting for more than an 80% share in the PC processor space [...].”). 

687 “Intel Timeline: A History of Innovation,” Intel (“1992[:] Intel becomes the largest semiconductor supplier in 

the world, according to market research firm Dataquest. [...] 1994[:] [...] Intel is the company whose chips 

power 85% of all desktop computers.”). 

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Communications and other investment efforts.688,689 Analysts described the line of products 

that Intel acquired from DSP as one which Intel “pumped untold dollars into a black hole for 

years.”690 After acquiring DSP, Intel sold a 2G SoC to British carrier O2 as well as a 3G SoC 

to Blackberry and to the Japanese firm NTT DoCoMo.691,692 Despite these design wins, the 

Intel modem and AP business unit failed to gain traction in the mobile wireless space.693 

Analysts explained that Intel had entered the modem chip industry too late, as it “was pretty 

mature by the time Intel got involved” and was defined by “very thin profit margins” and 

“really bloodthirsty competition.”694 Looking to “refocus on areas [...] core to its strength,” 

“eliminate nonperforming business units,” and generate cash to compete with Advanced Micro 

 

688 LaPedus, Mark, “Updated: Intel Puts Comms-Chip Businesses Up for Sale, Says Report,” EE Times, June 3, 

2006 (“Intel [...] spent more than $10 billion to enter the communications business over the years [...].”). 

689 “Intel to Acquire DSP Communications, Inc. for Approximately $1.6 Billion in Cash,” Intel Press Release, 

October 14, 1999 (“Intel Corporation and DSP Communications, Inc. [...] today announced the companies have 

entered into a definitive agreement under which Intel would acquire DSP Communications [...]. DSPC is a 

leading supplier of solutions for digital cellular communications products.”). See also Kawamoto, Dawn, “Intel 

Sells Off Communications Chip Unit,” CNET, June 27, 2006 (“Intel’s sale of its chip business for mobile 

handhelds and cell phones [...] will also remove a business that [...] has weighed down the company’s overall 

financial performance, despite billions of dollars in investments.”). 

690 Ferranti, Marc and Nancy Gohring, “Intel Sells Communications Unit to Marvell,” Computerworld, June 27, 

2006. 

691 Krazit, Tom, “RIM agrees to use Intel’s Hermon Mobile Chip,” InfoWorld, September 27, 2005 (“Manitoba 

was an integrated design that combined an applications processor, a GSM/GPRS (Global System for Mobile 

Communications/General Packet Radio Services) modem, and flash memory integrated onto a single piece of 

silicon. However, U.K. carrier O2 Ltd. was the only company to ever release a Manitoba phone [..].”) 

692 While Intel’s Hermon SoC could support 3G standards, it was used by Blackberry on the legacy 2G EDGE 

standard. See, e.g., Krazit, Tom, “RIM agrees to use Intel’s Hermon Mobile Chip,” InfoWorld, September 27, 

2005 (“ [...] Hermon can run on the more advanced UMTS [...] networks [...]. RIM’s initial plans for Hermon, 

however, center around building a phone for EDGE [...] networks.”); See also “Marvell to Purchase Intel’s 

Communications and Application Processor Business for $600 Million,” Intel Press Release, June 27, 2006 

(“[Intel’s] processors, based on Intel XScale technology, include the Intel PXA9xx communications processor, 

codenamed ‘Hermon,’ which powers Research in Motion’s (RIM) Blackberry 8700 device.”); Krazit, Tom, 

“Intel’s Cell Phone Efforts Still on Hold,” CNET, March 10, 2006 (“[...T]he only 3G, or third-generation, 

operator using Hermon is NTT DoCoMo, which is using Hermon-based modules to record wireless payments 

made at vending machines.”). 

693 Kawamoto, Dawn, “Intel Sells Off Communications Chip Unit,” CNET, June 27, 2006 (“The sale will also 

remove a business that struggled to take off [...].”). 

694 Ferranti, Marc and Nancy Gohring, “Intel Sells Communications Unit to Marvell,” Computerworld, June 27, 

2006. 

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Devices (AMD) in the computer processor market,695 Intel sold its modem and AP business to 

Marvell in 2006.696 

299. Following this sale to Marvell, Intel refocused its development efforts on processors that 

implemented its in-house x86 architecture.697 More specifically, Intel adapted its processor 

technology that had been successful in the PC industry for use in a mobile handset.698 This 

project culminated in 2008 when Intel released a standalone AP for mobile devices, codenamed Atom, that was built on x86 technology.699 In later years, Intel would go on to attempt 

to integrate the Atom AP with thin modems. 

 

695 See, e.g., Smith, Tony, “Intel Chief to Chop Workforce?” The Register, April 28, 2006 (“Company executives 

will spend the next three months examining the business for under-performing or inefficient operations [...] .”). 

See also Sylvester, IdaRose et al., “Event Flash: Marvell Buys Intel’s Handheld Processor Business for $600 

Million,” IDC, June 2006 (“Why now? Part of the answer is evident given Intel’s recent announcement back in 

April that the company would refocus on areas that were core to its strength and eliminate nonperforming 

business units.”); “Intel to Sell Chip Unit to Marvell,” LA Times, June 28, 2006 (“‘Intel is not as profitable as it 

once was, and times are looking tougher in the immediate future,’ Eric Ross, an analyst with ThinkEquity 

Partners, wrote in a research report. ‘Intel needs the cash to compete with Advanced Micro Devices and build 

the massive amount of capacity they plan.’”); Ferranti, Marc and Gohring, Nancy, “Intel Sells Communications 

Unit to Marvell,” ComputerWorld, June 27, 2006 (“The move is part of an Intel effort to shore up its core 

business in the face of increasing competitive pressure from Advanced Micro Devices Inc. and a slowing global 

PC market. Intel today identified mobile computing, in addition to the traditional PC market, as an area on 

which it plans to focus.”). 

696 “Marvell to Purchase Intel’s Communications and Application Processor Business for $600 Million,” Intel 

Press Release, June 27, 2006. 

697 See, e.g., “Marvell to Purchase Intel’s Communications and Application Processor Business for $600 Million,” 

Intel Press Release, June 27, 2006 (“The sale also will enable Intel to focus its investments on its core 

businesses, including high-performance, low-power Intel Architecture-based processors [...].”). See also Evans 

Deposition, Intel, p. 23 (“Q. What is ‘Intel architecture”? A. I mean, my definition of ‘Intel architecture’ is 

something that has – an IP that has the X86 instruction set, native.”). 

698 “Intel Announces Intel Atom Brand for New Family of Low-Power Processors,” Intel Press Release, March 2, 

2008 (“The Intel Atom processor is based on an entirely new microarchitecture designed specifically for small 

devices and low power, while maintaining the Intel Core 2 Duo instruction set compatibility consumers are 

accustomed to when using a standard PC and the Internet.”). 

699 See, e.g., “Intel Announces Intel Atom Brand for New Family of Low-Power Processors,” Intel Press Release, 

March 2, 2008 (“The Intel Atom processor will be the name for a new family of low-power processors designed 

specifically for mobile Internet devices (MIDS) [...].”). See also Evans Deposition, Intel, p. 23 (“Q. [...] Does 

the Atom core use what is known as ‘Intel architecture’? A. Yes. Q. What is ‘Intel architecture’? A. I mean, 

my definition of ‘Intel architecture’ is something that has – an IP that has the X86 instruction set, 

native.”);“Cellular Handsets & Chip Markets,” Forward Concepts, June 2011, p. 259 (“Table 54 Stand-alone 

Application Processor Features & Usage (continued) [...] Company[;] Intel [...] SA Processor Name[:] Atom 

Z670.”). 

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300. Concurrent with investing in its Atom AP, Intel invested sizeable resources into the 

development of a 4G standard called WiMAX. WiMAX was a mobile wireless solution that 

was a technological outgrowth of Wi-Fi.700 Delays in the mid-2000s diminished some of the 

lead WiMAX may have had on LTE.701 In spite of these delays, some executives at Intel still 

claimed that WiMAX had a two to three year lead on LTE in 2008: as stated by Intel’s CTO 

of the Mobile Wireless Group, “Insatiable demand for the Mobile Internet continues to grow. 

WiMAX is here now to meet that demand. LTE is at least 2-3 years away.”702 WiMAX 

definitively lost out to LTE as the accepted 4G standard nationwide in 2011 when Sprint (the 

remaining WiMAX advocate) announced it would stop selling WiMAX-compatible devices.703 

301. After its first attempt at entry into the modem chip industry, in 2011, Intel initiated another 

attempt to enter the modem chip industry by acquiring Infineon’s Wireless Solutions 

business.704 Infineon was a designer of GSM and WCDMA-compatible thin modems and a 

leading RF transceiver supplier whose thin modems had been selected by Apple for multiple 

 

700 “Frequently Asked Questions about Intel WiMAX,” Intel (“What is WiMAX?[:] Overview[;] [...] WiMAX is a 

next-generation wireless network communications technology. The technology is similar to Wi-Fi but provides 

high-speed, broadband access over a larger area with less interference.”). 

701 See, e.g., “WiMAX Delay Shakes Investor Confidence: Realistic Deadlines Required,” The Register, January 

21, 2005 (“Many WiMAX Forum members had expected public interoperability testing or ‘plugfests’ to start 

this month with fully certified equipment to be available from vendors by mid-year. Now, conformance testing, 

which matches specific equipment’s compatibility with the system profiles, will start in June, with plugfest 

beginning a month later and fully certified equipment appearing around the end of the year.”). See also 

Gardiner, Bryan, “Sprint Delays WiMAX Rollout, Again,” Wired, April 4, 2008 (“The soft-launches were 

delayed. Now, Sprint says it will also push back the commercial rollout of its Xohm WiMax service. [...] 

WiMax, of course, is perhaps best characterized by its amazing ability to *not* appear here in the U.S. – at least 

not in a commercial sense. The latest delay comes only a few months after Sprint assured CES attendees that it 

would begin rolling out the next-gen wireless network in April. While not giving a specific date for the new 

launch window (perhaps a wise move), analysts do expect the service to now appear sometime this summer. 

Maybe.”). 

702 “WiMAX and LTE – Our View,” Intel, June 6, 2008. 

703 Svensson, Peter, “Sprint: No More Clearwire Devices,” USA Today, October 7, 2011 (“Sprint Nextel Corp. 

said Friday that it will stop selling phones and other devices compatible with Clearwire Corp.’s [WiMAX] 

network at the end of next year, after it switches on its own higher-speed, fourth-generation data network.”). 

704 “Intel Completes Acquisition of Infineon’s Wireless Solutions Business,” Intel Press Release, January 31, 2011. 

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iPhone sockets.705,706 As discussed in Section V.C.1, Infineon’s business strategy was not to 

lead the modem industry in technological sophistication or features, but instead to pursue a 

fast-follower strategy.707 

.

708 

302. In the early 2010s, Intel released a line of 3G modems based on Infineon’s technology.709

Intel’s efforts to develop a 4G LTE thin modem chip following its acquisition of Infineon’s 

modem chip business had less early success. 

 

705 Evans Deposition, Intel, p. 33 (“Q. What did you learn about the status of [Infineon’s] modem development 

efforts? A. That they had – had a lot of success; [they] had an insanely good RF team [...].”). See also 

“Cellular Handset & Chip Markets,” Forward Concepts, 2005, p. 280 (“Infineon is noted as a leading supplier 

of RF components [...]. The company’s original GSM baseband chips [...].”); Constantine Deposition, Intel, 

p. 19 (Q. And was [the XMM6080] a modem chip that had 3G capability, but not LTE capability? A. That’s 

right. During that time period, that was correct. Q. And, specifically, is that a modem chip that had what's 

known as ‘WCDMA’ or sometimes ‘UMTS capability’? A. That’s correct, yes.”). 

706 Constantine Deposition, Intel, pp. 18–19 ( “Q. All right. So while you were at Infineon, did Infineon sell 

modem chips to Apple for the iPhone? A. Yes. Yes, they did. Q. And did that include the XMM6080 chip for 

the iPhone 3G? A. I believe that is correct. [...] Q. And was that then followed by the XMM6160 chip in the 

iPhone 4? A. That’s correct, yes.”). 

707 Lindner Deposition, Intel, pp. 16–17 (“Q. And when you were at Infineon, did the Infineon Wireless division, in 

your understanding, pursue a fast-follower strategy? A. Yes.”). See also Evans Deposition, Intel, p. 55 

(“[Infineon] had a gap around innovation, which resulted in [...] not being seen as a [...] leader, more as a fast 

follower [...].[...].”); “Infineon Communication on the Move,” Infineon (“Mobile Phone[:] Fast follower, 

catching up in 3G and multimedia[.]”). 

708 

 

 

709 See, e.g., LaPedus, Mark, “Intel-Infineon Deal: What Analysts are Saying,” EE Times, August 30, 2010 (“There 

are positive and negative implications for Intel regarding the Infineon transaction. Positives include: [...] (2) 

Infineon does have competitive wireless products including a 65-nm HSUPA platform (XMM 6160) [...].”). 

See also “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 81 (“[Intel] currently 

offer[s] four different 3G platforms, with varying data rates[:] XMM 6180 multimedia 3GPP Rel. 6, HSDPA cat 

8 [...] [;] XMM 6160, based on X-Gold 616 baseband (65nm version) and RF Transceiver – HSDPA/HSUPA 

[...] [;] XMM 6080 HSDPA [...] [;] XMM 6130 HSDPA [...].”). 

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303.

 

 

 

304.

 

 

 

 

 

 

 

 

 

 

 

 

 

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305.

 

 Despite 

 

718 See Exhibit V.C.2 and associated backup. 

719 “Intel Announces First Commercial Availability of 4G LTE Modem; Introduces Module for 4G Connected 

Tablets and Ultrabooks,” Intel Press Release, October 30, 2013 (“Intel Corporation today announced the 

commercial availability of its multimode, multiband 4G LTE solution. The Intel XMM 7160 platform is 

featured in the LTE version of the Samsung GALAXY Tab 3 (10.1), now available in Asia and Europe.”). 

720 

721 

722 

 

723 See, e.g., “Look Inside: Intel XMM 7160,” Intel. 

724 

725 

726 

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727 

306. Intel experienced more setbacks with its next set of LTE modem chips.

 

 

307. Intel made strides to improve its standing in the industry in 2015. It finally acquired VIA 

Telecom in an attempt to add CDMA compatibility to its product portfolio.732 

 

727 See, e.g., “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 77 (“The [Intel] 

XMM6260 HSPA+ Category 14 21 Mbps is the modem inside the Samsung Galaxy SIII. The next generation 

supporting DC-HSPA+ up to 42 Mbps has appeared in the SIII LTE shipped into South Korea [...].”). See also 

Exhibit V.C.14c; Exhibit V.C.2. 

 

 

 

 

 

732 Goldstein, Phil, “Intel Continues to Pare Mobile Losses, Buys CDMA Modem Assets from VIA Telecom,” 

FierceWireless, October 14, 2015 (“Intel spokeswoman Stephanie Matthew confirmed to FierceWireless that 

the company had purchased VIA's CDMA modem assets.”). See also

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.

734 

308. In 2015, Intel succeeded in integrating a thin modem with an AP built on Intel’s x86 

microprocessor technology to form a 3G SoC, the SoFIA.735

.

736 

309. In 2016, the entire line of SoFIA modems was abandoned, marking Intel’s exit from the SoC 

business for mobile phones.737 

 

 

 

734 

735 See, e.g., Eassa, Ashraf, “Intel Corporation’s Most Disappointing Product in 2015,” The Motley Fool, 

December 22, 2015 (“The only integrated applications processor and modem products that Intel brought to 

market this year were chips known as SoFIA 3G [...] and SoFIA 3G-R [...].”); [...].”); See also Hachman, 

Mark, “Intel Announces Atom X3 SoFIA, Its New Best Hope for Smartphone Relevance,” PCWorld, March 2, 

2015 (“Intel’s Atom X3 is Intel’s best hope for the smartphone market, as the SoC contains an integrated 3G 

radio along with an application processor.”). See also Evans Deposition, Intel, p. 23 (“Q. Does the Atom core 

use what is known as “Intel architecture”? A. Yes. Q. What is “Intel architecture”? A. I mean, my definition of 

“Intel architecture” is something that has – an IP that has the X86 instruction set, native.”). 

736 

737 See, e.g.,

 See also Hruska, Joel, “SoFIA Later: Intel Kills Upcoming 

Smartphone and Tablet Hardware,” ExtremeTech, April 29, 2016 (“The entire SoFIA project is canceled, in all 

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742

310. At present, Intel’s mobile product portfolio is mostly limited to thin modems and standalone 

APs.743 However, this has not hindered Intel’s ability to secure high-end sockets in the thin 

modem space, and Intel could always seek to develop an ARM-based SoC in the future. 

 flavors [...]. We reached out to Intel, which confirmed the news: SoFIA 3GX, SoFIA LTE, SoFIA LTE2, and 

Broxton have all been canceled.”). 

738

 

 

 

 

 

 

 

742 The use of external foundries is generally more expensive than using internal foundries, due to the so-called 

“foundry margin.” See, e.g., Tanner, Paige, “Could Intel’s Business Transition Impact Its Gross Margin?” 

Market Realist, July 14, 2017 (“Intel is an IDM (integrated design manufacturer), which handles the end-to-end 

process from chip design to manufacturing to packaging to selling. [...] The IDM model enables Intel to enjoy 

the profits of both a fabless company and a foundry.”). See Section III.D for further discussion on the “foundry 

margin.” 

743 See, e.g., “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 65 (“Qualcomm and I[n]tel 

are the largest suppliers of standalone (alias Slim Modems) LTE/3G modems.”). See also “Intel Atom 

Processors,” Intel. 

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193 

 In addition, Intel is poised to be the primary, 

and potentially the sole, supplier for Apple’s forthcoming 2018 iPhones.745 

311. With its most recent generation of LTE thin modems, to be released in 2018, Intel has 

succeeded in implementing CDMA backward compatibility; a technology Intel gained through 

its 2015 acquisition of VIA Telecom.746 This new thin modem, the XMM7560, with its gigabit 

LTE speeds and global coverage, sets the stage for Intel’s position in 5G.747

b. Analysis 

312. Intel’s history in the mobile space can be characterized by flawed foresight, high and inefficient 

investment, and execution difficulties regarding its x86-based chips and its early LTEcompatible thin modems. Intel’s focus on its PC semiconductor business unit has, at times, 

come at the expense of its mobile communications group. For example, the CEO of PC 

processor and server rival AMD claimed that Intel’s persistent focus in the 2000s on 

 

744 

745 

 See also Diaconescu, Adrian, “Apple Now Tipped 

to Retain Qualcomm as Backup Modem Supplier for Dual SIM 2018 iPhones,” PocketNow, November 20, 

2017 (“[Mind-Chi Kuo, KGI Securities analyst] believes Intel will be able to supply Apple with between 70 and 

80 percent ‘or more of required baseband chips’ for direct iPhone X and 8 sequels. The rest should still come 

from [...] Qualcomm [...]”). 

746 Evans Deposition, Intel, p. 316 (“Q. The XMM7560 that will be available this year will include CDMA 

capability, won’t it? A. Yes. [...] A. For the first time ever. Q. At Intel? A. Yes.”); See also Section V.C.11 

for more background information on VIA Telecom. 

747 “Intel is Accelerating the 5G Future,” Intel Press Release, February 21, 2017 (“[...] Intel is at the forefront of 

this revolution, accelerating the path to 5G in collaboration with our customers and partners in the industry. 

[...] Intel’s portfolio brings a unique advantage to the acceleration of 5G. [...] Accelerating 5G from Cloud 

Network to Devices[:] Intel XMM 7560 modem for next generation of LTE Advanced Devices. This new 

modem will deliver Gigabit LTE speeds in a single SKU with global coverage.”). 

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“squashing” AMD diverted attention away from Intel’s development in the mobile space.748,749 

Even though Intel’s first attempt at entering the modem space was relatively successful, Intel 

sold this early line of ARM-based modem chips to Marvell.750 In addition, the sale allowed 

Intel to focus on developing modem chips using its proprietary x86 architecture. As a result, 

Intel pursued a proprietary chip and manufacturing technology that the industry did not 

embrace and that was difficult to transform for use in mobile devices from use in PCs. 

Furthermore, Intel also invested heavily in WiMAX, a 4G technology that ultimately did not 

gain wide popularity. Intel later successfully entered the industry when it acquiesced to 

demand and embraced 4G LTE rather than WiMAX when it stopped trying to use its desktop 

microprocessor architecture in an environment that did not demand it and when it began to 

offer features, like backward compatibility, that were sought after by customers. 

313. In the past few years, Intel’s wins can be attributed to successful strategic acquisitions, 

improvements in LTE execution, and successes in learning from large mobile device OEMs 

and major carriers. Intel’s substantial financial resources have allowed it to invest and persist 

through its numerous foresight and execution challenges. Intel has invested in mobile 

communications R&D both internally and through the acquisition of other firms with 

potentially helpful technology,751 such as Infineon and VIA Telecom.752 In addition, Intel’s 

 

748 See also, Tanner, Paige, “Intel and AMD’s Duopoly in the PC Processor and Server Market,” Market Realist, 

January 15, 2016 (“AMD and Intel seem to have a duopoly in the PC processor and server market, with Intel 

accounting for more than an 80% share in the PC processor space and a 99% share in the server space.”). 

749 Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, May 

16, 2013 (“Ruiz, who led AMD’s last battle with Intel while he was CEO from 2002 to 2008, told me he 

thought Intel’s mobile progress had been slowed by their concentration on his company. ‘The focus the 

company has had for the past three decades on squashing AMD caused them to lose sight of the important 

trends towards mobility and low power,’ he said. ‘They should have focused more on their customers and the 

future than on trying to outdo AMD.’”). 

750 See, e.g., Ferranti, March and Nancy Gohring, “Intel Sells Communications Unit to Marvell,” ComputerWorld, 

June 27, 2006. 

751 For example, in

 See also related discussion on investment in Section III.E 

752 See, e.g., “Intel Completes Acquisition of Infineon’s Wireless Solutions Business,” Intel Press Release, January 

31, 2011 (“[Dadi Perlmutter, Intel executive vice president and co-general manager of Intel Architecture Group 

said,] ‘[t]he acquisition [of Infineon] brings to Intel a world-class wireless portfolio and a proven track record in 

cellular communications, combined with our existing strength in computing positions us well for future 

growth.’”). See also Goldstein, Phil, “Intel Continues to Pare Mobile Losses, Buys CDMA Modem Assets from 

VIA Telecom,” FierceWireless, October 14, 2015 (“[Intel spokeswoman Stephanie Matthew said,] ‘VIA 

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relationship with OEMs such as Samsung, Apple, and Nokia in the early 2010s helped Intel to 

improve upon vital features such as carrier aggregation and backward compatibility. 

Consequently, Intel’s recent line of LTE-compatible thin modems now offers performance that 

is almost comparable to modem chips offered by Qualcomm. However, Intel’s recent modem 

chip success has been limited to the thin-modem area, largely consisting of Intel’s sales to 

Apple. 

i. Foresight 

314. Intel has historically struggled to maintain strategic focus and to meet the demands of the 

mobile communications industry. A competitive analysis of Intel prepared by IDC in 2017 

noted that Intel’s “[s]trategy swings reflect [an] inability to steer [the] organization.”753 In 

particular, as discussed in more detail in the following paragraphs, Intel made three prominent 

strategic errors that slowed its growth in the modem chip industry. Although Intel’s shipment 

of chips declined sharply in the years leading up to 2016,754 its recent efforts to respond to 

demand and learn from major carriers and mobile device OEMs have allowed it to improve 

product offerings and secure several Apple design wins for its thin-modem chips.

a. Intel focused too heavily on x86

315.

 

 

 Telecom will bring to Intel its CDMA technology, expertise in reference designs and complete platforms, as 

well as [its] skillset to deliver low-cost entry platforms.’”).

753 “Custom Competitive Analysis: Intel,” IDC Enabling Technologies Research Group, June 20, 2017, p. 5. 

754 See Exhibit V.C.2. 

755 

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. 

316. Intel started developing modem chips in the early 2000s, including the Hermon chip released 

in 2006 that utilized the ARM architecture for the AP and implemented GSM and WCDMA 

standards. Intel had some success with this product offering in high-end handsets, as it was 

selected by RIM for use in a Blackberry device in 2006.757 However, in the same year, Intel 

sold its ARM-based AP and modem chip product lines to Marvell,758 which analysts linked in 

part to Intel wanting to refocus on its proprietary microprocessors. 759 Soon after, Intel 

abandoned the ARM architecture and started redeveloping its existing x86-processor 

architecture, used in desktop computers and servers, into a standalone AP code-named “Atom” 

that Intel could pair with thin modems.760 

 

756 

757 “Cellular Handset & Chip Markets,” Forward Concepts, 2006, p. 99 (“Realizing that they had largely missed 

the GSM/GPRS/EDGE market window, Intel embarked on an ambitious new UMTS [WCDMA]/GSM/EDGE 

chip design, codenamed ‘Hermon’ [...]. [...] The first announced Hermon customer is Research in Motion for 

its GSM/GPRS/EDGE BlackberryTM model 8700-series handset family.”). See also Moses, Asher, “Blackberry 

8700 Review,” CNET, March 17, 2006 (“Typical Price: $799”). 

758 “Marvell To Purchase Intel’s Communications And Application Processor Business for $600 Million,” Intel 

Press Release, June 27, 2006 (“The business’ processors, based on Intel XScale technology, include the Intel 

PXA9xx communications processor, codenamed Hermon, which powers Research in Motion’s Blackberry 8700 

device. [...] This planned sale does not impact the ability of other Intel business [...] to use ARM-based, Intel 

XScale processors.”). 

759 See, e.g., Sylvester, IdaRose et al, , “Event Flash: Marvell Buys Intel’s Handheld Processor Business for $600 

Million,” June 2006, IDC #202382, Volume 2 (“Additionally, the timing of the announcement [...] culminates a 

campaign to regain product and market leadership in server microprocessors [...].”). See also Ferranti, Marc 

and Nancy Gohring, “Intel sells communications unit to Marvell,” ComputerWorld, June 27, 2006 (“The move 

is part of an Intel effort to shore up its core business in the face of increasing competitive pressure from 

Advanced Micro Devices Inc. and a slowing global PC market. Intel today identified mobile computing, in 

addition to the traditional PC market, as an area on which it plans to focus.”). 

760 See, e.g., “Intel Announces Intel Atom Brand for New Family of Low-Power Processor,” Intel Press Release, 

March 2, 2008, http://www.intel.com/pressroom/archive/releases/2008/20080302comp.htm (“The Intel® 

AtomTM processor will be the name for a new family of low-power processors designed specifically for mobile 

Internet devices [...]. [...] The Intel Atom processor is based on an entirely new microarchitecture designed 

specifically for small devices and low power, while maintaining the Intel® CoreTM 2 Duo instruction set 

compatibility consumers are accustomed to when using a standard PC and the Internet.”). See also “Cellular 

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317. Widespread adoption of Intel’s x86 architecture by the mobile industry had some practical 

limitations. For example, Intel’s Atom-based designs were reportedly ill suited for the mobile 

computing environment, as the resulting 

 Chips based on the ARM architecture “are 

generally not as high-performance as Intel’s, but they [are] fantastically energy efficient.”762 

The combination of energy efficiency and low cost made ARM-based chips “exactly what 

mobile designers were looking for.”763 In general, ARM processors dominated the handset 

processor space, and most mobile handsets, especially cellphones, had been developed for the 

rival ARM architecture, and not x86. 764 This meant that Intel’s Atom processor was 

incompatible with proprietary mobile-phone operating systems, which made “breaking into the 

cellphone market an uphill climb,” according to analysts.765

 Handsets & Chip Markets,” Forward Concepts, June 2011, p. 259 (“Table 54 Stand-alone Application Processor 

Features & Usage (continued) [...] Company[;] Intel [...] SA Processor Name[:] Atom Z670.”). 

761 See, e.g., Ganapati, Priya, “Why Intel’s Processors Aren’t Big on Cellphones,” Wired, July 6, 2009 (“Intel is 

being held back in the mobile sphere by its inability to offer power consumption on par with ARM’s chips, say 

analysts. [...] ‘Atom today is not suitable for cellphones,’” acknowledges [Pankaj] Kedia [, a director in Intel’s 

ultra mobility group].”). See also 

 “#412 Special: China - 

Smartphones and the Cloud,” Deutsche Bank, Signals to Noise (S2N), January 24, 2012, p. 5 (“Moreover, we 

did not speak with a single handset maker who said they would even consider using Atom or x86 in their 

phones, echoing the commonly held view that x86 is not power efficient for cellular. [...] Designed originally 

for PCs with ample room for fans, heat sinks and cooling elements x86, they tell us, give off far more heat than 

other processors. Cell phones have rigorous temperature specs in addition to the more widely known RF 

requirements. [...T]here is no room in a phone for a fan or heat sink [...].”). 

762 Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, May 

16, 2013. 

763 Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, May 

16, 2013. 

764 See, e.g., Ganapati, Priya, “Why Intel’s Processors Aren’t Big on Cellphones,” Wired, July 6, 2009 

(“Meanwhile, Intel rival ARM, whose chips are packaged and sold through companies such as Qualcomm, 

Samsung and Texas Instruments, has gained nearly 90 percent of the cellphone processor market. 

‘Traditionally cellphones have been designed on the ARM processor and it is not easy to change it,’ says Jack 

Gold, principal analyst with consulting firm J. Gold Associates.”). 

765 Ganapati, Priya, “Why Intel’s Processors Aren’t Big on Cellphones,” Wired, July 6, 2009 (“Add to that the 

notion that Atom is untested for mobile phones and the fact that many proprietary mobile-phone operating 

systems are not compatible with Intel’s x86 architecture [...].”). 

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318.

 

 

768

319.

 

].”770 

 

 

 

 

 

 

770 INTEL-QCOM000236289–6290 at 6289, email from Aichatou Evans, Intel, June 9, 2015. 

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320.

 

 

 The SoC business was canceled in 2016.778

b. Intel prioritized investment into WiMAX, which was ultimately not 

adopted as a standard

 

 

 

 

 

 

 

 

 

 

 

778 Hruska, Joel, “SoFIA Later: Intel Kills Upcoming Smartphone and Tablet Hardware,” ExtremeTech, April 29, 

2016 (“According to an article by Patrick Moorhead of Moor Insights & Strategy [... t]he entire SoFIA project 

is canceled, in all flavors [...]. We reached out to Intel, which confirmed the news: SoFIA 3GX, SoFIA LTE, 

SoFIA LTE2, and Broxton have all been canceled.”). 

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321. Intel invested billions of dollars in the technology as well as in the chips for the 4G WiMAX 

standard but failed to translate that investment into a product that was sufficiently attractive to 

mobile device OEMs and network carriers.779 WiMAX-based modem chip solutions were 

unable to reach a critical mass of adoption.780 There were three primary reasons why WiMAX 

failed. 

322. First, WiMAX could not offer the same breadth of coverage as could LTE, all else equal, which 

hampered WiMAX from becoming a successful interface for smartphones and other mobile 

devices. 

 WiMAX, like Wi-Fi, uses a 

higher frequency band than does LTE and other mobile wireless standards. 783 Higher 

frequencies offer, in theory, faster data rates but over shorter distances.784 Data rates were 

 

779 See, e.g., Svensson, Peter, “Sprint: No More Clearwire Devices,” USA Today, October 7, 2011 (“Sprint Nextel 

Corp. said Friday that it will stop selling phones and other devices compatible with Clearwire Corp’s [WiMAX] 

network at the end of next year, after it switches on its own higher-speed, fourth-generation data network.”). 

See also Section V.B.3.a for more discussion on the relative merits of WiMAX and other 4G standards. 

780 Reed, Brad, “LTE vs. WiMAX: When it Comes to the U.S. Handset Market, LTE has Landed a Knockout 

Blow,” Network World, November 2, 2011 (“The chief reason for WiMAX’s downfall in the consumer 

handset space is a simple one: [...] WiMAX wasn’t adopted by enough carriers to make it the de facto standard 

for 4G mobile data in the U.S.”). 

781 See, e.g., “Frequently Asked Questions about Intel WiMAX,” Intel (“What is WiMAX [:] Overview: [...] 

WiMAX is a next-generation wireless network communications technology. The technology is similar to Wi-Fi 

but provides high-speed, broadband access over a larger area with less interference.”). See also 

782

 

 

”). 

784 Ray, Bill, “WiMax Has ‘Failed Miserably,’” The Register, March 26, 2008 (“The lack of in-building 

penetration is a result of using high frequencies, which can carry lots of data but have shorter ranges and can’t 

get into buildings, as anyone using a 3G network will testify. There has been a hope, in the industry, that 

WiMAX would magically solve these problems but radio frequency physics remain problematic.”). 

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limited by the difficulties WiMAX had traveling sizable distances and in penetrating barriers 

such as walls.785 

323. Second, although WiMAX development started with a multi-year lead over LTE, 786

development of a mobile WiMAX network was delayed.787 According to an employee at 

GlobalFoundries, a semiconductor foundry, WiMAX backers squandered their development 

lead by focusing first on fixed (non-mobile) applications of WiMAX before working on 

mobility solutions.788 This lost time allowed those companies that backed LTE to catch up.789 

324. Finally, WiMAX failed to achieve widespread adoption by network carriers. While Sprint 

initially supported the WiMAX standard, 790 carriers such as Verizon and AT&T instead 

supported LTE.791 The number of phone users on LTE networks grew quickly, surpassing 

 

785 Segan, Sascha, “WiMAX vs. LTE: Should You Switch?,” PCMag, May 16, 2012 (“Sprint’s WiMAX system 

has always been challenged by being on the very high frequency 2.6 GHz band. The band can support a lot of 

users, but it has trouble with distance and wall penetration.”). 

786 Hamblen, Matt, “WiMAX vs. Long Term Evolution: Let the Battle Begin,” Computerworld, May 14, 2008 

(“Still, as of now, LTE is not even a set standard. [...] The IEEE [...] picked 802.16e as its mobile WiMAX 

standard in late 2005 [...]. Intel executives still believed that WiMAX had a 2-3 year lead on LTE as of 2008. 

See, e.g., “WiMAX and LTE – Our View,” Intel, June 6, 2008 (“Insatiable demand for the Mobile Internet 

continues to grow. WiMAX is here now to meet that demand. LTE is at least 2-3 years away.”). 

787 See, e.g., “WiMAX Delay Shakes Investor Confidence: Realistic Deadlines Required,” The Register, January 

21, 2005 (“Many WiMAX Forum members had expected public interoperability testing or ‘plugfests’ to start 

this month with fully certified equipment to be available from vendors by mid-year. Now, conformance testing, 

which matches specific equipment’s compatibility with the system profiles, will start in June, with plugfest 

beginning a month later and fully certified equipment appearing around the end of the year.”). See also 

Gardiner, Bryan, “Sprint Delays WiMAX Rollout, Again,” Wired, April 4, 2008 (“WiMax, of course, is 

perhaps best characterized by its amazing ability to *not* appear here in the U.S. – at least not in a commercial 

sense. The latest delay comes only a few months after Sprint assured CES attendees that it would begin rolling 

out the next-gen wireless network in April. While not giving a specific date for the new launch window 

(perhaps a wise move), analysts do expect the service to now appear sometime this summer. Maybe.”). 

788 APL-QC-FTC_37372708–2709 at 2708, email from Amitabh Kumar, GlobalFoundries, November 3, 2014 

(“WiMAX needed to go after the mobility market earlier and grab the time to market advantage. The decision 

of the WiMAX backers to first focus on [...] fixed play [...] and delay mobility play [...] provided additional 

time for LTE backers to catch up[.]”). 

789 APL-QC-FTC_37372708–2709 at 2708, email from Amitabh Kumar, GlobalFoundries, November 3, 2014 

(“The decision of the WiMAX backers to first focus on [...] fixed play [...] and delay mobility play [...] 

provided additional time for LTE backers to catch up[.]”). 

790 Reed, Brad, “LTE vs. WiMAX: When it comes to the U.S. handset market, LTE has landed a knockout blow,” 

Network World, November 2, 2011 (“The other reason that WiMAX never caught on in the United States is that 

the only carrier to adopt it early on happened to be Sprint.”).

791 See, e.g., Reed, Brad “LTE vs. WiMAX: When it comes to the U.S. handset market, LTE has landed a knockout 

blow,” Network World, November 2, 2011 (“Once Sprint gets its LTE network up and running, it will mean 

that all three major wireless carriers in the United States support LTE, as both Verizon and AT&T already 

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those on WiMAX in 2011.792 In October 2011, Sprint announced that it would stop selling 

phones compatible with its WiMAX network,793 leaving LTE the de facto 4G standard.794 

 

 

 commercially deployed LTE in various markets.”). See also “LTE: The Future of Mobile Broadband 

Technology,” Verizon, 2009, p. 3 (“Verizon Wireless chose LTE over WiMAX as the technological foundation 

for its 4G wireless broadband network.”). 

792 See, e.g., Lam, Wayne, “Global LTE Subscribers Set to More Than Double in 2013 and Exceed 100 million,” 

IHS Markit, January 22, 2013 (“Since being adopted in 2010 with just 612,000 users, the 4G next-generation 

wireless technology has grown by leaps and bounds, surging by an astounding factor of 22 to 13.2 million 

subscribers in 2011 [...].”). See also Exhibit QX74, Keddy Deposition, Intel, INTEL-QCOM008124586, p. 61 

(Slide contains a graph of ‘worldwide mobile subscriptions” in millions for LTE and WiMAX, demonstrating 

that WiMAX had more subscribers than LTE from 2007 through part of 2011. Then the graph shows that LTE 

overtook WiMAX in terms of mobile subscriptions in 2011, stating “WiMAX first to market but quickly 

overtaken by LTE[.]”). 

793 Svensson, Peter, “Sprint: No More Clearwire Devices,” USA Today, October 7, 2011 (“Sprint Nextel Corp. 

said Friday that it will stop selling phones and other devices compatible with Clearwire Corp’s [WiMAX] 

network at the end of next year, after it switches on its own higher-speed, fourth-generation data network.”). 

794 Reed, Brad, “When it comes to the U.S. handset market, LTE has landed a knockout blow,” Network World, 

November 2, 2011 (“The chief reason for WiMAX’s downfall in the consumer handset space is a simple one: 

the tech industry likes uniformity and WiMAX wasn’t adopted by enough carriers to make it the de facto 

standard for 4G mobile data in the U.S. [...] ‘WiMAX has suffered significantly in the past two years as LTE 

has been adopted by more and more commercial operators around the world,’ writes wireless analyst Andy 

Seybold. ‘It should be clear to everyone by now that LTE will be the 4G technology of choice for worldwide 

deployment [...].’”). 

795 

 

 

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203 

 

 

 

 

c. Intel failed to offer features that were widely demanded

326. Intel did not align its product offerings with the features often demanded by mobile device 

OEMs. As sales of Intel’s thin modems declined in the mid-2010s,801 customers left Intel in 

favor of its competitors’ product offerings.802 

327. In 2011, Intel acquired Infineon in order to re-enter the mobile communications space. 

 

797 Exhibit QX74, Keddy Deposition, Intel, INTEL-QCOM008124586, p. 61. 

798 See, e.g.,

 

 also Exhibit V.B.7. 

799 Exhibit QX75, Keddy Deposition, Intel, INTEL-QCOM001145202 at 5202. 

800 See, e.g.,

Exhibit V.B.7.; Exhibit V.B.8 

801 See, e.g., Exhibit V.C.2. See also

802 See, e.

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 See also Section V.C.1 for further discussion on Infineon’s product portfolio its support for 2G 

and 3G wireless standards. 

805 See, e.g., “Intel Unveils the XMM 7560 Modem – Enabling the Next Generation of LTE Advanced Devices,” 

Intel Press Release, February 21, 2017 (“Six mode operation, including [...] CDMA/EVDO for markets 

worldwide.”). See also 

 

806 

 See also Exhibit V.B.1. 

 

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811

 

808 See Section V.B.1.c for a discussion of industry-wide uncertainty regarding the future of CDMA. See also 

 

 

 

 

 

 

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 Intel did not take concrete steps to deliver on CDMA 

until 2015. Intel’s acquisition of the CDMA assets of VIA Telecom was only finalized in 

2015.815 

.

816 Intel’s integration of VIA Telecom’s 

technology is ongoing, but appears to be proceeding smoothly thus far.817 Intel modem chips 

that have integrated VIA Telecom’s CDMA technology will be released in 2018.818 

 

 

 

 

 

815 “Via Telecom Completes Sale of Part of Assets to Intel Corporation,” VIA Technologies Press Release, 

October 1, 2015 (“VIA Technologies, Inc. announced that VIA Telecom had completed the sale of part of its 

assets to Intel Corporation.”). 

 

Intel have been technically capable of integrating CDMA capability 

into the XMM 7480? A. I believe so.”) 

 

 

818 See, e.g., “Intel Unveils the XMM 7560 Modem – Enabling the Next Generation of LTE Advanced Devices,” 

Intel Press Release, February 21, 2017 (“Six mode operation, including [...] CDMA/EVDO for markets 

worldwide[.]”). See also Lindner Deposition, Intel, p. 60 (“Q. All right. So we are sitting here in March 2018. 

Will the XMM 7560 modem platform ship for commercial use later this year? A. Yes. Q. And will the XMM 

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330.

 

 

821,822 

331. Intel also has not offered competitive SoCs, instead focusing on thin modems.

 

 

 7560 include CDMA capability? A. That’s the plan.”); Evans Deposition, Intel, p. 316 (“Q. The XMM7560 

that will be available this year will include CDMA capability, won’t it? A. Yes.”). 

819 

820 

821 

 

 

 

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332. Intel finally achieved technical success with the SoFIA 3G and 3G-R in 2015.826 However, 

the SoFIA 3G was viewed by some to be an inferior product, as it only offered 3G rather than 

4G support Rather than 

investing in and completing development of LTE SoCs, Intel discontinued the SoFIA line in 

2016.828 

 

 

 

 

826 Eassa, Ashraf, “Intel Corporation’s Most Disappointing Product in 2015,” The Motley Fool, December 22, 

2015 (“The only integrated applications processor and modem products that Intel brought to market this year 

were chips known as SoFIA 3G [...] and SoFIA 3G-R [...].”). 

827 Eassa, Ashraf, “Intel Corporation’s Most Disappointing Product in 2015,” The Motley Fool, December 22, 

2015 (“The only integrated applications processor and modem products that Intel brought to market this year 

were chips known as SoFIA 3G -- a very weak, undifferentiated applications processor with support for only the 

3G cellular standard -- and SoFIA 3G-R in collaboration with Rockchip, a slightly less-bad applications 

processor still with only 3G support.”). See also

 

 

828 See, e.g.,

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.”829 The lack of an SoC offering, and the decision not to target customers 

besides Apple and a few others, has limited the potential scale available to Intel, as few mobile 

device OEMs other than Apple utilize thin modems.830 However, after the cancellation of the 

SoFIA product line, Intel has experienced major socket wins with Apple’s iPhones.831 

 

d. Intel’s recent efforts to learn from network carriers and mobile device 

OEMs have been successful in allowing it to win sockets and position 

itself well for 5G 

333. Intel has used previous discussions and product engagements with network carriers and mobile 

device OEMs to guide and test its product development – even where those engagements did 

 

 See also Hruska, Joel, “SoFIA Later: Intel Kills Upcoming 

Smartphone and Tablet Hardware,” ExtremeTech, April 29, 2016(“According to an article by Patrick Moorhead 

[...] of Moor Insights & Strategy [... t]he entire SoFIA project is canceled, in all flavors [...]. We reached out 

to Intel, which confirmed the news: SoFIA 3GX, SoFIA LTE, SoFIA LTE2, and Broxton have all been 

canceled.”) 

829 

830 “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 51 (“There seem to be 

only a few high-volume designs that utilize stand-alone cellular modems (the largest of which is the iPhone), 

and unless Intel can win one or more of them, it probably won’t be able to bring in substantial revenue and 

profit dollars with [the XMM7360] (or future stand-alone modems).”). 

831 See, e.g., Apple Exhibit 1, Wolff Deposition, Intel, INTEL-QCOM000573628–3632 at 3632 (“This week Intel 

and Apple officially entered into a long-term partnership for Intel’s LTE modem and other wireless 

technologies to be used in Apple products. The first intersection point being Intel’s XMM7360 chipset (3rd

generation LTE modem) to be delivered into Apple’s iPhone and iPad projects for the 2016 launch.”). 

 

 

 

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not result in sales to the OEM. 

 

 

 

 

 

834 

 

 

 

 

 

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334. This collaborative work with OEMs and network carriers allowed Intel to refine and improve 

its chip offerings. In the wake of these collaborative partnerships, Intel secured Apple’s iPhone 

socket in 2016 with its XMM7360.840 As shown in Exhibit V.C.14a, between 2016 and 2017, 

Intel has won Apple’s modem chip business at the expense of Qualcomm.841 This set the stage 

for Intel to win the most, if not all of, Apple socket over Qualcomm for the 2018 iPhone 

products.842

335. 

 

 

839 

See also my discussion of 

“pipe cleaners” in Section III.E. 

840 Wolff Deposition, Intel, pp. 168–169 (“Q. Do you consider the XMM7360 to have been a commercial success? 

A. Yes. Q. And among others, this was included in the Apple iPhone 7 in 2016; right? A. Yes.”). 

841 See Exhibit V.C.14a. 

842 Blevins Deposition, Apple, p. 76 (“Q. What is the procurement decision for the flagship iPhones to be launched 

in in 2018? A. [...Intel] has been chosen as the baseband provider for our 2018 product launch. Q. The only 

baseband provider for the 2018 product launches? A. Correct. [...]. Q. Is that true across all products, not just 

iPhones? [...] A. I was referring to iPhone specifically.”). See also Diaconescu, Adrian, “Apple Now Tipped 

to Retain Qualcomm as Backup Modem Supplier for Dual SIM 2018 iPhones,” PocketNow, November 20, 

2017 (“[Mind-Chi Kuo, KGI Securities analyst] believes Intel will be able to supply Apple with between 70 and 

80 percent ‘or more of required baseband chips’ for direct iPhone X and 8 sequels. The rest should still come 

from [...] Qualcomm [...]”). 

843 

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 5 Furthermore, Intel has identified China as “an important market at the 

forefront of 5G” and, through its partnership with Chinese modem chip suppliers Spreadtrum 

and RDA,846 has announced a “strategic collaboration” on a 5G mobile platform that combines 

an Intel thin modem with Spreadtrum AP technology.847 Intel’s official press release described 

the goal of this collaboration as “making a 5G smartphone experience a compelling reality for 

consumers in China.”848

336. In addition to developing 5G technologies, Intel continues to expand the applications of its thin 

modems. 

 

 

844 

845 

846 Shih, Gerry and Noel Randewich, “Intel to Invest up to $1.5 Billion in Two Chinese Mobile Chipmakers,” 

Reuters, September 25, 2014 (“Intel will acquire the stake in Spreadtrum Communications and RDA 

Microelectronics [...].”). See also Section V.C.10 for further discussion on Spreadtrum and the IntelSpreadtrum relationship. 

847 “Intel and UniGroup Spreadtrum & RDA Announce 5G Strategic Collaboration,” Intel Press Release, February 

22, 2018. 

848 “Intel and UniGroup Spreadtrum & RDA Announce 5G Strategic Collaboration,” Intel Press Release, February 

22, 2018. 

849 

 

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 in machine-to-machine communication 

and the Internet of Things.854 

 

850 

851 

852 

853 

854 Evans Deposition, Intel, pp. 28–30 (“Q. And is ‘IoT’ the ‘Internet of Things’? A. Yes. Q. And is the Internet 

of Things an example of what you call ‘machine-to-machine communication’? A. It’s the beginning of that. 

[...] Q. Do you envision the Internet of Things will be an increasingly common [use for] what you refer to as 

‘premium baseband processors’? A. I think, over the next [...] 20 or 30 years with [...] the advancements that 

we are seeing around what we call the machines from robots to autonomous-driven cars, and so on, and AI. 

Some of those segments will require a premium baseband chipset.”). 

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.

855 In addition, Sprint has announced an 

agreement to sell “Intel-based 5G connected PCs” in its stores in 2019.856

ii. Investment 

337. Intel has invested billions of dollars in acquiring companies with modem chip products and in 

its own mobile wireless R&D.857 Moreover, Intel’s spending on new product development has, 

at times, eclipsed that of other technology firms.858 As discussed in Section V.C.1, Intel also 

acquired Infineon’s Wireless Solutions Division in 2011 and invested a considerable amount 

in order to transform Infineon from a fast follower into a technological leader.859,860 

 

855 See, e.g., 

 

856 Abazovic, Fuad, “Sprint in Bed with Qualcomm and Intel,” Fudzilla, June 5, 2018. 

857 See, e.g., “Intel to Acquire DSP Communications, Inc. for Approximately $1.6 Billion in Cash,” Intel Press 

Release, October 14, 1999 (“Intel Corporation and DSP Communications, Inc. [...] today announced the 

companies have entered into a definitive agreement under which Intel would acquire DSP Communications 

[...]. DSPC is a leading supplier of solutions for digital cellular communications products.”). See als 

 

858 Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?” The Atlantic, May 

16, 2013 (“But Paul Otellini’s Intel spent $19.5 billion on R&D during 2011 and 2012. That’s $8 billion more 

than Google. And a substantial amount of Intel’s innovation comes from its manufacturing operations, and Intel 

spent another $20 billion building factories during the last two years. That’s nearly $40 billion dedicated to 

bringing new products into being in just two years[.]”). 

859 See, e.g., Leske, Nicola, and Noel Randewich, “Intel Buys Infineon Unit and Expands Wireless Offer,” Reuters, 

August 30, 2010 (“U.S. chipmaker Intel Corp unveiled a deal on Monday to buy German chipmaker Infineon 

Technologies AG’s wireless unit for $1.4 billion [...].”). See also “Intel Completes Acquisition of Infineon’s 

Wireless Solutions Business,” Intel Press Release, January 31, 2011. 

860 

 

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 The acquisitions of assets from Infineon and VIA 

Telecom helped Intel achieve this goal.864 Now, Intel’s modems support GSM, WCDMA, TDSCDMA, LTE, and as of 2018, also CDMA customers.865

338. Intel has strategically invested in and pursued partnerships with a few Chinese modem chip 

suppliers, including Spreadtrum and RDA.866 In 2014, it was reported that Intel paid up to 

$1.5 billion for a minority stake in both firms.867 The deal was intended to strengthen Intel’s 

position in China, while simultaneously granting Spreadtrum access to Intel’s proprietary x86 

architecture.868 In 2017, Spreadtrum announced that it had created an SoC that relied on the 

 

861 Goldstein, Phil, “Intel Continues to Pare Mobile Losses, Buys CDMA Modem Assets from VIA Telecom,” 

FierceWireless, October 14, 2015 (“Intel spokeswoman Stephanie Matthew confirmed to FierceWireless that 

the company had purchased VIA’s CDMA modem assets.”). 

 

 

 

864 Infineon’s Wireless Solutions Business sold GSM and WCDMA modem chips. See Section V.C.1. 

865 “Intel Mobile Modem Solutions,” Intel (Column titled “Protocols” lists the wireless standards that each 4G 

LTE, 3G, and 2G Intel modem supports, including GSM, HSPA+, TD-SCDMA, LTE, and CDMA.). 

866 Shih, Gerry and Noel Randewich, “Intel to Invest Up to $1.5 Billion in Two Chinese Mobile Chipmakers,” 

Reuters, September 25, 2014 (“Intel will acquire the stake in Spreadtrum Communications and RDA 

Microelectronics [...].”). 

867 Shih, Gerry and Noel Randewich, “Intel to Invest up to $1.5 Billion in Two Chinese Mobile Chipmakers,” 

Reuters, September 25, 2014 (“Intel Corp INTC.O said it will pay as much as $1.5 billion for a 20 percent stake 

in two mobile chipmakers with ties to the Chinese government [...].”). 

868 “Intel and Tsinghua Unigroup Collaborate to Accelerate Development and Adoption of Intel-Based Modem 

Devices,” Intel Press Release, September 25, 2014 (“The purpose of the agreements is to expand the product 

offerings and adoption for Intel-based mobile devices in China and worldwide [...].. [...] Under the terms of 

the agreement, Spreadtrum Communications, Inc. will jointly create and sell a family of Intel Architecturebased system-on-chips (SoCs).”). 

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x86 architecture,869 though industry analysts believed that the “processor cores are quite slow” 

and “seriously doubt[ed] that [the SC9861G-IA] chip [would] find significant success.”870

339. Although Intel has invested a comparable amount to Qualcomm in R&D, as of 2015 

Qualcomm’s investments had generally been more efficient and effective. 

 

 

 

 Qualcomm’s engineers produced 

roughly double the number of chip designs and SKUs per person.875 Where Intel’s strategy 

required it to invest in many architectures, Qualcomm efficiently reused IP across products. 

 

869 Eassa, Ashraf, “Spreadtrum Announces Intel-Made Mobile Chip,” The Motley Fool, March 6, 2017 (“At 

Mobile World Congress, China-based mobile chip vendor Spreadtrum announced a new chip dubbed the 

SC9861G-IA [...]. The chip is unique for a couple of reasons. The first is that it uses eight 

of Intel’s (NASDAQ:INTC) Atom-based processor cores codenamed Airmont. The second is that it is built by 

Intel using its 14-nanometer chip manufacturing technology.”). 

870 “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 86. 

871 

872

873 See, e.g., 

874 . 

875 

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340. These marked differences in R&D efficiency, experienced over a multi-year period, had a large 

impact on Intel’s performance relative to Qualcomm’s, especially when considered as a 

function of R&D investment. Though Intel’s recent LTE offerings have achieved commercial 

success,876

.

877 

341.

”878 In fact, a 2017 press release about 5G Intel stated that “early investments in the 

cloud and core network technologies have resulted in significant developments in the next 

generation of connectivity and the next-generation core.”879 Furthermore, 5G is one initiative 

in which Intel has leveraged its investments in Chinese firms Spreadtrum and RDA. In 2018 

Intel announced that the “companies plan to develop a 5G smartphone platform for the China 

market that will feature an Intel 5G modem and will be targeted to coincide with 5G network 

deployments [in China] in 2019.”880

 

876 See, e.g., Wolff Deposition, Intel, pp. 167–169 (“Q. [...W]as the 7160 platform commercially successful or 

not? A. It achieved the targeted quantities and the targeted revenue. [...] Q. [...] And in your view, the sales 

volume for the 7260 was a success? A. The 7260 was a success, big success. [...] Q. Would you consider the 

7262 to have been successful? A. It was a development vehicle to get TD-SCDMA commercially launched, 

like 7160 was for LTE. And all these assets have been combined successfully in 7360 and are shipping in 

highest volume today. Q. Do you consider the XMM7360 to have been a commercial success? A. Yes.”). 

877 See, e.g.,

878 

 

879 “Intel is Accelerating the 5G Future,” Intel Press Release, February 21, 2017. 

880 “Intel and UniGroup Spreadtrum & RDA Announce 5G Strategic Collaboration,” Intel Press Release, February 

22, 2018. 

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iii. Execution 

342. Intel’s executives have noted that Intel has at times bogged down its efficient execution in the 

mobile communications space. For example, reflecting on Intel’s earlier endeavors, former 

CEO Paul Otellini stated that while he recognized the emergence of low-end mobile devices, 

he “wasn’t able to get the Intel machine turning fast enough” and, consequently, Intel “[wasn’t] 

able to get [its] arms around [the explosion of low-end devices] early enough.”881

343. Before entering the mobile communications space, Intel possessed considerable technical 

expertise from its computing products. Although Intel’s x86 architecture was successful in 

laptops and PCs, it was not as well suited for mobile applications as the ARM architecture 

because x86 was an older design for desktop processors.882 Intel’s early attempts to use x86 

in mobile products resulted in power-inefficient modem chips that became too hot to use in 

 

881 Madrigal, Alexis, “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?” The Atlantic, May 

16, 2013. 

882 See, e.g., “#412 Special: China - Smartphones and the Cloud,” Deutsche Bank, January 24, 2012, p. 5 (“[...W]e 

did not speak with a single handset maker who said they would even consider using Atom or x86 in their 

phones, echoing the commonly held view that x86 is not power efficient for cellular. [...] Designed originally 

for PCs with ample room for fans, heat sinks and cooling elements[,] x86, they tell us, give[s] off far more heat 

than other processors. Cell phones have rigorous temperature specs in addition to the more widely known RF 

requirements. [...T]here is no room in a phone for a fan or heat sink [...].”). See also Ganapati, Priya, “Why 

Intel’s Processors Aren’t Big on Cellphones,” Wired, July 6, 2009 (“Intel’s low-power processor has fast 

become the silicon of choice for tiny computers – but not cellphone makers. [...] ‘Traditionally cellphones 

have been designed on the ARM processor and it is not easy to change it,’ says Jack Gold, principal analyst 

with consulting firm J. Gold Associates. ‘And cellphone makers don’t want to. ARM-based chips have a 

significant advantage over the current generation Atom processors for quite a few reasons.’ [...] The current 

generation of Atom processor was never meant to go on cellphones, says Pankaj Kedia, a director in Intel’s ultra 

mobility group. [...] ‘Atom today is not suitable for cellphones,’ acknowledges Kedia. [...] [A]nalysts are 

clear that ARM right now ranks much well ahead of Intel Atom.”); Evans Deposition, Intel, p. 23 (“Q. [...] 

Does the Atom core use what is known as ‘Intel architecture’? A. Yes. Q. What is ‘Intel architecture’? A. I 

mean, my definition of ‘Intel architecture’ is something that has – an IP that has the X86 instruction set, 

native.”). 

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smartphones.883 While Intel started development of its x86-based solutions in 2008, it was still 

working to resolve these power issues in 2012.884

344. Additionally, the acquisition of Infineon presented a failed opportunity for Intel to develop 

integrated chips. 

.

885 These problems 

limited Intel’s revenue opportunities, since mobile device OEMs increasingly demanded 

SoCs.886 Intel launched its Atom-based SoC, called SoFIA, in 2015 and for 3G standards 

 

883 See, e.g., “S2N #406 - Notes from the Week,” Deutsche Bank, November 18, 2011, p. 3 (“Our checks continue 

to indicate that handset makers are reluctant to use x86 for phones due to concerns over power consumption and 

thermal footprint.”). See also Ganapati, Priya, “Why Intel’s Processors Aren’t Big on Cellphones,” Wired, July 

6, 2009 (“Consider these numbers for a moment (from ARM). For a 1000 mAH battery, the Intel Atom Z500 

Atom processor running at 800 MHz offers 19 hours of sleep time and overall battery life of 7 hours. An ARM 

Cortex-A8 at 800 MHz offers weeks of sleep time and 6.9 days of average battery life – an order of magnitude 

greater.” ). 

884 See, e.g., “Intel Announces Intel Atom Brand for New Family of Low-Power Processors,” Intel Press Release, 

March 2, 2008 (“The Intel AtomTM processor will be the name for a new family of low-power processors 

designed specifically for mobile Internet devices [...] arriving later this year.”). See also “Cellular Handset & 

Tablet Chip Markets,” Forward Concepts, 2012, p. 93 (“Intel has been pushing hard for Smartphone vendors to 

use their Atom processor, via the upcoming Medfield variant. [...] In this path the industry still harbors 

concerns that Intel’s x86 architecture consumes too much power.”); “Comprehensive Cellphone & Tablet Chip 

Markets,” Forward Concepts, 2013, p. 178 (“Intel has struggled to reduce the power consumption of its Atom 

chips to mobile handset levels [...].”). 

885 See, e.g.,

. See also 

Cunningham, Andrew, “Intel Chases Cheap Android Tablets, Lets Another Company Use Its CPU Cores,” Ars 

Technica, May 27, 2014 (“All SoFIA parts are being manufactured at TSMC, which already manufactures the 

stand-alone versions of Intel’s modems—Intel’s Mobile Communications division was once a third party called 

Infineon, and Infineon’s designs were made for TSMC’s manufacturing processes.”). 

886 See, e.g., “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, pp. 64–65 (“There 

seem to be only a few high-volume designs that utilize stand-alone cellular modems (the largest of which is the 

iPhone), and unless Intel can win one or more of them, it probably won’t be able to bring in substantial revenue 

and profit dollars with this part (or future stand-alone modems). Intel’s Atom ‘Sofia’ X3 is Intel’s best hope for 

the smartphone market, as the SoC contains an integrated 3G radio along with an application processor.”). 

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only.887 This release of SoFIA came years after Intel’s competitors offered similar products 

and coincided with potential customers’ adoption of 4G LTE.888 Intel discontinued the line in 

May 2016.889

345.

 

 

887 Eassa, Ashraf, “Intel Corporation’s Most Disappointing Product in 2015,” The Motley Fool, December 22, 

2015 (“The only integrated applications processor and modem products that Intel brought to market this year 

were chips known as SoFIA 3G [...] and SoFIA 3G-R [...].”). 

888 See Exhibit V.B.1 and V.B.7. 

889 See, e.g., Shah, Agam, “Intel Isn’t Done with x86 Smartphone Chips Yet,” PCWorld, February 27, 2017 (“The 

chip maker last May stopped making its Atom smartphone chips after a failed effort to break into the handset 

market. Intel started focusing on new areas like IoT, data centers, memory, gaming PCs and virtual reality.... 

Intel struck a partnership with Spreadtrum in 2014 to make variants of Atom smartphone chips for the Chinese 

market. Intel also struck a similar deal with Rockchip, and said it would continue to honor those 

partnerships.”). See also Hruska, Joel, “SoFIA Later: Intel Kills Upcoming Smartphone and Tablet Hardware,” 

ExtremeTech, April 29, 2016 (“According to an article by Patrick Moorhead of Moor Insights & Strategy [... 

t]he entire SoFIA project is canceled, in all flavors [...]. We reached out to Intel, which confirmed the news: 

SoFIA 3GX, SoFIA LTE, SoFIA LTE2, and Broxton have all been canceled.”). 

890 See, e.g.,

 Eassa, Ashraf, “Intel Corporation Kills SoFIA and Broxton,” The Motley Fool, May 2, 2016 

(“Unfortunately, Intel did not execute well to this roadmap. [...] SoFIA LTE didn’t arrive in 2015 (it was 

pushed to 2016 and now, apparently, cancelled). SoFIA LTE 2 was pushed into mid/late 2017 before it, too, got 

the ax. It is likely that Intel realized that these unacceptably delayed products would not do well in the 

marketplace by the time they made it out, leading to the decision to ax them.”). 

891 See, e.g.,

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.”894

346. Intel does not currently offer LTE SoCs,895 which limits its ability to compete for sales to the 

majority of OEMs other than Apple. However, 

 

892

893 See, e.g., 

 

894 

895 While Intel halted the production of its SoC lines in 2016, its agreements allowed Spreadtrum and Rockchip to 

continue using the Atom x86 architecture for their own SoCs. Spreadtrum launched an integrated LTE SoC 

using an Atom-based architecture known as Airmont in 2017. This chip does not carry the Intel brand and Intel 

is uninvolved with marketing or helping OEMs integrate Spreadtrum’s product into mobile devices. See, e.g. 

Shah, Agam, “Intel Isn’t Done With x86 Smartphones Yet,” PCWorld, February 27, 2017 (“Smartphones with 

Intel-based x86 chips aren’t dead yet. Intel may have stopped making Atom chips for smartphones, but a 

partner is keeping that effort alive. Chinese chip maker Spreadtrum is still making x86 smartphone chips based 

on the Atom architecture named Airmont. [...] Intel struck a partnership with Spreadtrum in 2014 to make 

variants of Atom smartphone chips for the Chinese market. Intel also struck a similar deal with Rockchip, and 

said it would continue to honor those partnerships. Rockchip is making Atom chips for IoT devices [...].”). 

See also Eassa, Ashraf, “Spreadtrum Announces Intel-Made Mobile Chip,” The Motley Fool, March 6, 2017 

(“At Mobile World Congress, China-based mobile chip vendor Spreadtrum announced a new chip dubbed the 

SC9861G-IA [...]. The chip is unique for a couple of reasons. The first is that it uses eight 

of Intel’s (NASDAQ:INTC) Atom-based processor cores codenamed Airmont. The second is that it is built by 

Intel using its 14-nanometer chip manufacturing technology.”); Shilov, Anton, “Spreadtrum SC9861G-IA: An 

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;

 

898

3. MediaTek 

a. Background 

347. MediaTek is a Taiwanese fabless semiconductor design firm, spun off from United 

Microelectronics Corporation in 1997.899 While the company initially designed and sold 

optical drives in China, it later expanded into the modem chip industry.900 MediaTek started 

 Intel Atom Octocore Smartphone SoC on 14nm with LTE,” AnandTech, March 15, 2017 (“The chip will not 

carry the Intel Atom brand, and thus Intel will not help makers of devices to integrate it or make any other 

incentives to popularize the platform. It will also not invest in its advertising.”). 

896 See, e.g., 

897 See, e.g., Evans Deposition, Intel, p. 316 (“Q. The XMM7560 that will be available this year will include 

CDMA capability, won’t it? A. Yes. Q. Now are you aware – A. For the first time ever. Q. At Intel? A. 

Yes.“). See also Schafer Deposition, Apple, pp. 292–293 (“Q. It wouldn’t be possible to use 100 percent Intel 

baseband processors unless Intel could be providing a CDMA-compliant multimode LTE baseband. Isn’t that 

right? A. Yes.”); Blevins Deposition, Apple, p. 76 (“Q. What is the procurement decision for the flagship 

iPhones to be launched in 2018? A. [...Intel] has been chosen as the baseband provider for our 2018 product 

launch. Q. The only baseband provider for the 2018 product launches? A. Correct. [...] Q. Is that true across 

all products, not just iPhones? [...] A. I was referring to iPhone specifically.”); See also Diaconescu, Adrian, 

“Apple Now Tipped to Retain Qualcomm as Backup Modem Supplier for Dual SIM 2018 iPhones,” 

PocketNow, November 20, 2017 (“[Mind-Chi Kuo, KGI Securities analyst] believes Intel will be able to supply 

Apple with between 70 and 80 percent ‘or more of required baseband chips’ for direct iPhone X and 8 sequels. 

The rest should still come from [...] Qualcomm [...]”). 

898

. 

899 See, e.g., “Overview,” MediaTek. See also Kwong, Robin, “MediaTek Breaks Out into Mobile Phones,” 

Financial Times, March 16, 2011. 

900 See, e.g., Kwong, Robin, “MediaTek Breaks Out Into Mobile Phones,” Financial Times, March 16, 2011 (“In 

its early years, MediaTek made chips for CD and DVD drives in computers, and later chips for home DVD 

players and digital TV sets.”). 

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investing in R&D for the modem chip industry in 2001 and sold its first GSM modem chips in 

2004.901 In its first few years in the modem chip industry, MediaTek had limited global 

presence and mainly targeted low-end Chinese mobile device OEMs.

902 It pursued a relatively 

novel strategy of providing OEMs with software solutions and reference designs, allowing 

even resource-constrained OEMs to produce handsets quickly and cheaply. By lowering 

barriers to entry in the mobile device industry, MediaTek was able to secure a broad set of 

customers and experienced significant growth.903

348. In 2008, MediaTek acquired the wireless chip division of Analog Devices, gaining access to 

both its TD-SCDMA technology and its relationships with major OEMs such as LG. 904 

Toward the end of the decade, MediaTek began to pursue WCDMA technologies and 

smartphones, releasing its first standalone WCDMA chip in 2010 and its first WCDMA 

modem chip with an integrated AP in 2011.905 Targeting the fast-growing but “un-served” 

low-end smartphone segment, MediaTek’s WCDMA sales grew rapidly through the early 

 

901 See, e.g., BAIN00002230, p.14, presentation titled “Wireless Semicon Market Overview,” Bain, March 2011 

(“Initial investment in handset R&D in 2001 [...].”). See also MediaTek 2007 Annual Report, p. 6 (“Jan. 

2004[:] Launched GSM Mobile Phone Chipsets[.]”). 

902 BAIN00002230, p. 10 (“MediaTek focuses on low-end Chinese ODMs [original device manufacturers]”). 

MediaTek’s chips were also widely used among Chinese grey-market phone manufacturers. See, e.g., “Cellular 

Handset & Tablet Chip Markets,” Forward Concepts, 2011, p. 261 (“Many of the non-Smartphones in the 

Shanzhai [Chinese imitation and pirated brands and goods] Phone market are powered by a MediaTek chipset 

[...].”). See also “Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 151 (“MediaTek’s baseband 

solutions [...] are widely used by many nonlicensed handset manufacturers in 2005.”). . 

903 BAIN00002230, p. 14 (“Major growth from wireless as Chinese grey-market and low-tier ODM/OEMs explode 

[...]. By 2005, >50% penetration of low-tier players worldwide.”). 

904 See, e.g., Moynihan Deposition, MediaTek, p. 14 (“A. [...] MediaTek did not have a TD-SCDMA solution, 

ADI did. [...] Q. Did you come to understand why MediaTek acquired the Analog Devices wireless business? 

A. I mean, what was conveyed to us at the time from management of MediaTek was it 

, and target more global Tier 1 

OEMs.”). See als

. 

905 See Exhibit V.B.5. 

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224 

2010s.906 In 2010, MediaTek overtook TI and Qualcomm to become the world’s largest 

supplier of modem chips, and it has remained the second largest supplier since 2011.907

349. Pursuing the strategy of being a fast follower,908 MediaTek released its first standalone and 

AP-integrated LTE chips in 2014, a few years after some of its competitors.909 More recently, 

MediaTek targeted mid- to high-end mobile devices with its Helio X and P series LTE SoCs, 

first released in 2015.910 MediaTek also incorporated support for CDMA into its chips starting 

in 2015.911 This allowed the company to strengthen its position in China and gain design wins 

in new geographies such as the U.S.912 

 

906 See, e.g., MTK_00115960–5961, p. 17, email from CC Lien, MediaTek, April 6, 2011, with attached 

presentation titled “2010 Long Term Plan WCP2,” July 29, 2010 (“Emerging Market Smartphones growing 

faster than Developed Markets[:] CAGR of 30.4% in Emerging vs 18.5% in Developed Markets (2010 - 

2015)[;] Emerging Market Volumes exceed Developed Markets by 2013[;] [...L]ower cost of entry due to 

open-source SW & increasing capability of Chinese OEM/ODMs should drive increased Smartphone adoption - 

especially low-cost smart phones”) and p. 19 

 also Exhibit V.C.3. 

907 See Exhibit III.D.3. 

908 Moynihan IH, MediaTek, pp. 221–222 (“Q. Was MediaTek’s model to this point to follow the technological 

standard? A. [...] We certainly weren’t the first into the chipset business for mobile phones. And if there is 

such a thing, the way MediaTek tends to approach these markets is we tend to come with very complete 

solutions, very complete reference designs. If we’re not coming into the market first, we do tend to start as a 

follower. That’s fair. [...] We try to be a fast follower.”). 

909 See Exhibit V.B.7. 

910 See, e.g., Sima, Claudiu, “MediaTek Unveils the Helio Range of SoC; 64-bit Units with 480fps Slow-Motion 

Videos Support,” GSMDome, March 30, 2015 (“Today, MediaTek, a pretty important player on the SoC 

market, announced the launch of a new range of processors that will arrive on high-end smartphones. The new 

products from this range are called Helio X and Helio P [...].”). See also Wang, Lisa, “MediaTek Looks to 

Regain Market Share,” Taipei Times, December 28, 2017 (“Helio P series [...] target smartphones with a price 

tag of 1,500 yuan to 3,000 yuan (US$230 to US$460) [...] the Helio X series [...] is used in premium phones.”). 

911 See Exhibit V.B.2. 

912 See, e.g., “Baseband/Modem & Smartphone Market,,” Forward Concepts, 2017, p. 76 (“China Telecom on the 

other hand was not an addressable market [for MediaTek] even in China until [...] they added CDMA 2000 and 

EVDO RA modes of operation [...].”). See also “First MediaTek-Powered Smartphone Introduced by Sprint,” 

MediaTek Press Release, September 16, 2016 (“The first MediaTek-enabled smartphone for Sprint launched 

today, breaking new ground for MediaTek in the U.S. market.”); Moynihan Deposition, MediaTek, pp. 115–116 

(“Q. [...] Have you been able to observe that [MediaTek’s acquisition of CDMA capability] did, in fact, lead to 

increased sales? A. I mean, I can certainly point to a few isolated specific cases where, without having CDMA, 

we would not have won those slots. Yes. Q. And what slots come to mind? A. One design win with LG for a 

slot at Verizon and around the same time one at Sprint that probably led to a few more designs after that, also 

with LG.”). 

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b. Analysis 

350. Throughout its history, MediaTek has generally shown strong foresight, well-targeted 

investments, and at times lagging but overall solid execution. MediaTek has effectively 

aligned its modem chip offerings with segments experiencing growing demand and has 

leveraged its experience obtained from working with a wide array of OEMs to increase the 

competitiveness of its future products. The company has strategically used technology 

acquisitions to gain access to new customers and geographic regions and has demonstrated the 

ability to compete at progressively higher-end tiers. 

 

913 See, e.g., 

 

914 

915 Weinstein, Austin, “Intel Blows Keep Coming as Apple Modem Contract May Be at Risk,” Bloomberg, June 

27, 2018, https://www.bloomberg.com/news/articles/2018-06-27/intel-blows-keep-coming-as-apple-modemcontract-may-be-at-risk (“MediaTek Inc., which manufactures modems, might displace Intel for the product at 

Apple, which he says has been rumored to be working on their own modem.”). 

916 . 

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351. Foresight: Four strategic decisions have largely defined MediaTek’s success over the years. 

First, upon entering the modem chip industry, MediaTek exploited an opportunity to expand 

sales of mobile devices in emerging markets by lowering OEMs’ barriers to entry. MediaTek 

targeted its R&D investments into providing software solutions and detailed reference designs, 

which considerably shortened OEMs’ design and production cycles, from 18 months to six 

according to its own estimate,917 and reportedly enabled OEMs with no experience and fewer 

than 10 staff to design mobile devices.918

352. Second, after being slow to supply WCDMA products, and facing increased competition from 

other low-cost suppliers such as Spreadtrum,919 MediaTek created an opportunity for renewed 

sales by focusing on low-end smartphones. MediaTek did not start developing WCDMA 

modem chips until 2005, six years after the standard was released.920 As a result of its delayed 

start and other execution issues discussed below, MediaTek did not release its first WCDMA 

chip until 2010, well after most firms in the industry.921 Responding to its challenging position, 

MediaTek attempted to “democratiz[e] smartphones” by bringing high end features to low-end 

mobile devices. 922 MediaTek introduced WCDMA modem chips, 

 

917 Tilley, Aaron, “MediaTek’s Plan to Take on Qualcomm and Move Up in the Cut-Throat World of Mobile,” 

Forbes, June 3, 2015 (“MediaTek’s talent lies in getting smartphone makers up and running, fast. It provides 

reference designs--blueprints that new manufacturers can follow quickly to put together their own phones. ‘We 

reduce the whole phone-design, mass-production cycle from one and a half years to six months,’ says 

MediaTek’s senior vice president, Jeffrey Ju.”). 

918 Kwong, Robin, “MediaTek Breaks Out Into Mobile Phones,” Financial Times, March 16, 2011 (“Instead of just 

offering a chip to power the phone, MediaTek also provided its customers with reference designs and a suite of 

‘turnkey software solutions.’ By making these available, the company drastically lowered the entry barrier to 

the mobile phone manufacturing industry. The relative ease with which a phone could be made using 

MediaTek’s solution was highlighted by the company’s early customers, who typically had no previous 

experience in the phone industry and sometimes fewer than 10 staff.”). 

919 See, e.g., So, Sherman, “Battered MediaTek Rearms with Android,” Asia Times, April 5, 2011 (“‘[...I]ts rival, 

Spreadtrum, after years of trial, finally, came up with a chip that is stable enough for phone manufacturers,’ said 

an industry insider, ‘With a price about 10-15% lower than MediaTek’s, the Spreadtrum product quickly gained 

market share.’”). 

920 MTK_00533746, p. 3, presentation titled 

921 See Exhibit V.B.5. 

922 MTK_00748746, p. 12, presentation titled “MWS All-Hands Meeting,” MediaTek, November 28, 2012. 

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,

923 that would be cost-competitive to serve the rapidly growing 

emerging-market smartphone segment.924 As a result of this as well as its good execution 

discussed below, MediaTek’s WCDMA sales grew swiftly.925

353. Third, building upon its success serving low-cost device OEMs, MediaTek continued 

expanding over time into supplying modem chips for medium and higher-tier mobile devices. 

In early 2015, MediaTek announced two SoC series, Helio X and P, targeted at mid-tier to 

high-end devices.926 

.

927 Having identified a growing “new premium” trend of consumers wanting 

high-end features at more affordable prices, MediaTek in 2017 incorporated some of the highend features of the Helio X series into the lower-priced Helio P series.928 Making the Helio P 

 

923 . 

924 See, e.g., “MediaTek Launches MT6575 Android Platform,” MediaTek Press Release, February 13, 2012 

(“MediaTek [...] today announced the availability of the MT6575, its 3rd generation platform for mid and 

entry-level Android smartphones. [...] ‘We expect significant growth in entry and mid-level smartphones, with 

wholesale prices under US$190, over the coming years. We forecast that this segment will almost triple in size 

from 191 million shipments in 2012 to 551 million by 2016. At that time, we also expect approximately 75% of 

those entry and mid-level smartphones to ship to emerging markets’ said Neil Mawston, Executive Director, 

Global Wireless Practice, at Strategy Analytics. The MediaTek MT6575 platform is ideally suited to cater to a 

wide range of smartphone devices that target this growing segment in multiple markets around the world.”). 

925 See Exhibit V.C.3. 

926 While the Helio X series targeted “extreme” performance, the Helio P series balanced performance with price 

and power consumption. See, e.g., Moynihan Deposition, MediaTek, p. 66 (“A. The way we positioned it was 

that the Helio X line was the high-end line. X was sort of, I think, associated with extreme. P was positioned 

below that, and, like I said, we've always sort of tried to talk about power -- a balanced power, performance, 

price dimension.”). 

927 

”). 

928 See, e.g., MTK_00450489–0491 at 0490, email from Kevin Keating, MediaTek, November 8, 2017 (“[...W]e 

are focused on the P series because that is where the demand is in the market. Plus the fact we have pulled 

higher end features down into the P series to meet this new premium trend of consumers wanting more for 

less.”). See also Moynihan Deposition, MediaTek, p. 286 (“Q. Sorry. Would you say, though, that MediaTek 

is competing in the high-end segment? A. [...] I think with the new Helio P products that we just announced, 

we start to move into a slightly higher tier than we’ve been in. [...E]xternally we call this the new premium 

tier. [...] Q. And how would you characterize how the new premium tier compares with the flagship segment? 

A. Slightly lower features, slightly lower price.”). 

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series the focus of its development efforts led to several design wins.929

30 

354. Fourth, MediaTek has also demonstrated foresight by leveraging the learning accumulated by 

working with a diverse set of OEMs in order to increase the future competitiveness of its 

products. 

31 Similarly, MediaTek has used its relationships with region-specific OEMs 

such as Alcatel, ZTE, Lenovo, Huawei, and Coolpad to develop modem chips that cater to the 

demands of network carriers in certain geographies.932 In addition, working with customers 

such as has enabled MediaTek to improve its chip design for high-

 

929 Wang, Lisa, “MediaTek Looks to Regain Market Share,” Taipei Times, December 28, 2017 (“The change [to 

focus on the Helio P series] has borne fruit, with the Helio P series processors being adopted by some of the 

world’s top five mobile phone brands, including China’s tier-one mobile brands Huawei Technologies Inc [...], 

Oppo Mobile Telecommunications Corp [...] and Vivo Electronics Corp [...].”). 

930 As discussed in Sections III.E.1.b and IV.A, 

See, e.g., 

931 

932 

and pp. 89–91 (“Q. And with respect to the transition from 3G to 4G, who 

are the important teaching customers? A. [...] And then for the early phases for our LTE, the other ones that 

would have been important were Alcatel and ZTE. 

 [...] And we’d have had a few more for China, so for the deployment of LTE in China we 

might have relied on people like Lenovo, Huawei, for example, Coolpad.”). 

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end devices. 933

.

934

355. Investment: MediaTek has invested in R&D consistently throughout its history, but, in keeping 

with its strategy of being a fast follower, it has typically only invested a fraction of the amount 

spent by industry leaders.935 According to UBM TechInsights analysis from 2010, MediaTek’s 

R&D investment was “primarily focused on integration and reducing cost;” as such, MediaTek 

did not “publicly demonstrate any particular core technology,” and much of the IP it owned 

had originated at other companies.936 Instead, MediaTek used technology acquisitions as a 

means of bolstering its existing product lines and quickly gaining access to new customers and 

technologies. To strengthen its software solutions and chip integration, between 2004 and 

2006 MediaTek aggressively bought technology from several smaller firms.937 In January 

 

933 See, e.g., Moynihan IH, MediaTek, pp. 34–35 (“Q. Who are the teaching customers? A. [...] And then I would 

think some of these other brands, like , have probably helped more with some of the 

higher-tier multimedia features. Again, as I mentioned, their devices tend to be higher tier in feature set, higher 

price maybe than some of the other customers. Therefore, they’re driving more advanced displays, more 

advanced cameras, more advanced user features, and so, you know, those are probably the customers that are 

pushing us on things like camera features, which is an important feature for a lot of these devices right now.”). 

934 Senior technical MediaTek representatives have visited Apple on numerous occasions to discuss its mobile 

 

935 See Exhibits III.E.1 and III.E.2. 

936 McGrath, Dylan, “Feeling the Heat, MediaTek Seeks a Comeback,” EE Times, December 20, 2010 (“The 

TechInsights study found that MediaTek owns roughly 3,000 patents and patent applications worldwide, with 

the majority in the U.S., China and Taiwan. Many of those patents and applications were transferred to 

MediaTek from other companies, including about 225 that were originally owned by IBM.”). 

937 See, e.g., “Taiwan’s Top Chip House Stretches Beyond Optical Storage,” EE Times, April 11, 2005 

(“[MediaTek] has bought Pixtel Communications Inc., a handset software specialist for man-machine interfaces 

that once did contract work for Motorola Inc. It came with a 70-man team in India, which will allow Mediatek 

to offer strong software support, especially for Chinese handset OEMs that are still weak in that area.”). See 

also Nystedt, Dan, “MediaTek Expands Mobile Phone Business,” IDG News Service via InfoWorld, October 

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2008, MediaTek obtained access to TD-SCDMA technology and relationships with major 

OEMs such as LG through its acquisition of Analog Devices’ wireless chip division. In order 

to boost its development of 4G products, MediaTek also signed a software licensing agreement 

with NTT DoCoMo for the Japanese firm’s LTE technology.938 

356. In October 2013, MediaTek licensed CDMA technology from VIA Telecom. 939 While 

MediaTek had previously specified the use of standalone VIA Telecom modem chips in its 

reference designs, this collaboration allowed MediaTek to integrate CDMA capability into its 

chips, which the company claimed reduced power consumption and device manufacturing 

costs.940 This helped MediaTek sell backward-compatible LTE chips to carriers such as China 

Telecom, Verizon, and Sprint that operated CDMA networks, leading to its first design wins 

in the U.S. in 2016.941 

 30, 2006 (“Taiwanese chip designer MediaTek Inc. said it paid US$13 million for a number of mobile phone 

software applications in a bid to expand the acceptance of its communications chips. The deal with Beijing 

software developer Pollex Mobile Software Co Ltd. comes at a time other companies are shying away from the 

mobile phone market due to intense competition.”); “Cellular Handset & Chip Markets,” Forward Concepts, 

2007, p. 183 (“MediaTek has bought a 31.55% stake in Airoha Technology from BenQ Group for US$18.6M, 

making MediaTek the largest shareholder. Airoha develops RF solutions in WLAN market segment and has 

also been attempting to enter the GPRS market as well.”). 

938 “MediaTek Signs LTE Licensing Agreement with NTT DOCOMO,” MediaTek Press Release, July 27, 2010 

(“MediaTek Inc. [...] announces it has entered into a licensing agreement with NTT DOCOMO, INC. regarding 

‘LTE-PF,’ a mobile-terminal platform based on Long Term Evolution (LTE). Upon the completion of the LTEPF licensing agreement with DOCOMO, MediaTek plans to integrate this LTE technology with its 2G and 3G 

technologies to provide solutions for Japan and global markets.”). 

939 See, e.g., Loh Deposition, MediaTek, p. 102 (“Q. Are you aware that in October 2013, MediaTek entered a 

CDMA technology license with VIA Telecom? A. Yes, I know that.”). 

940 “MediaTek Adds CDMA2000 and Unveils Plans for WorldmodeTM Mobile Chipsets,” MediaTek Press Release, 

January 6, 2014 (“MediaTek already uses VIA Telecom baseband processors as a discrete part in its existing 

mobile reference designs, and now, incorporating CDMA2000 technology into new SOC designs will 

significantly reduce manufacturing costs and power consumption for mobile devices.”). 

941 See, e.g., “Baseband/Modem & Smartphone Market,,” Forward Concepts, 2017, p. 76 (“China Telecom on the 

other hand was not an addressable market [for MediaTek] even in China until [...] they added CDMA 2000 and 

EVDO RA modes of operation [...].”). See also “First MediaTek-Powered Smartphone Introduced by Sprint,” 

MediaTek Press Release, September 16, 2016 (“The first MediaTek-enabled smartphone for Sprint launched 

today, breaking new ground for MediaTek in the U.S. market. This marks MediaTek’s first premium chipset 

offered in a device on a major U.S. carrier network. [...] MediaTek helio P10 offers high-performance 4G 

LTE octa-core processors as well as the older modems, such as, CDMA2000, WCDMA, HSPA+ and GSM.”); 

“First MediaTek-Powered Smartphone Launched by Verizon Wireless,” MediaTek Press Release, October 20, 

2016 (“MediaTek today announces the launch of the first-ever MediaTek-powered CDMA/LTE smartphone by 

Verizon Wireless. The LG StyloTM 2 V marks MediaTek’s debut as a certified smartphone chipset provider to 

Verizon Wireless.”). 

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.

943

357. Execution: MediaTek has demonstrated the ability to consistently execute in product 

development, despite roadblocks and initially unfavorable positions. MediaTek did not start 

developing its first WCDMA chip until 2005, by which point several competitors including 

Qualcomm, TI, and Ericsson Mobile Platforms (EMP) had already developed and released 

WCDMA chips. 944 Following its acquisition of the Analog Devices wireless division, 

MediaTek did not ship its first WCDMA modem chips until 2010, in part because it decided 

to integrate Analog Devices’ RF transceiver with its WCMDA modem chip.945 

358. Another reason for the delayed development of its WCDMA modem chip was understaffing, 

as MediaTek was simultaneously also developing its first SoC for a smartphone.946 Despite 

 

942 

943 See, e.g.,

944 See Exhibit V.B.5. 

945 Moynihan Deposition, MediaTek, pp. 24–25 (“Q. Do you recall that there were delays that were encountered in 

integrating these Othello RF transceivers with the existing MediaTek W-CDMA baseband development 

process? A. [...] I think there was probably work that had to be done to -- typically these are two separate chips 

anyway. There’s probably some work to do on the interfacing that maybe had to be redone or had to require 

some extra work, but that is sort of part of the normal development.”). 

946 See, e.g., MTK_00601420, p. 11, presentation titled “All Hands Communications MediaTek USA, Inc.,” 

MediaTek, January 15, 201

 See also Loh Deposition, 

MediaTek, pp. 27–28 (“Q. And when did MediaTek start selling SoCs for smartphones? [...] A. I can’t 

remember. Q. Do you remember a general time frame? A. 2010, 2011.”). 

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these hurdles, MediaTek was eventually able to execute and create successful WCDMA 

products. In 2012, MediaTek released the MT6575 and MT6577 AP-integrated WCDMA 

chips that targeted smartphones in emerging markets with a device price point below $200.947 

.

948 Due in part to its foresight in targeting this segment and its 

execution in creating high-performing chips tailored for it, MediaTek became the world’s 

second-largest supplier of WCDMA chips in 2013.949

359. More recently, MediaTek has been making headway in the execution of chip development for 

use in medium and higher-end products, again overcoming an initially difficult position to 

reach competitiveness. , debuted in 2015 to target 

mid-tier to high-end mobile devices, 

 

947 See, e.g., “MediaTek Set to Break Price Barrier for Mid-Entry Smartphones with MT6577 Powered Handsets 

From Micromax & Spice,” MediaTek Press Release, September 13, 2012 (“The MT6577 features a dual 1GHz 

CortexTM-A9 application processor from ARM, [...] MediaTek’s proven 3G/HSPA modem, and runs the latest 

Android 4.0 ‘Ice Cream Sandwich’ (ICS) operating system. [...] Developed specifically for the fastest growing 

sub-$200 smartphone segment [...].”). See also “MediaTek Launches MT6575 Android Platform,” MediaTek 

Press Release, February 13, 2012 (“MediaTek Inc. [ ...] today announced the availability of the MT6575, its 

3rd generation platform for mid and entry-level Android smartphones. The MT6575 platform offers a 1GHz 

ARM® CortexTM-A9 processer, a proven 3G/HSPA modem and runs the latest ‘Ice-Cream Sandwich’ 

Android 4.0 release. ‘We expect significant growth in entry and mid‐level smartphones, with wholesale prices 

under US$190, over the coming years. We forecast that this segment will almost triple in size from 191 million 

shipments in 2012 to 551 million by 2016. At that time, we also expect approximately 75% of those entry and 

mid‐level smartphones to ship to emerging markets’ said Neil Mawston, Executive Director, Global Wireless 

Practice, at Strategy Analytics.”). 

948 

. See, e.g., Wyatt Deposition, Qualcomm, Exhibit 

CX5760, at CX5760-017 

and at CX5760-018 

). See also Rosgani, “Understanding MediaTek MTK MT6577 Chipset,” 

GizmoChina, July 20, 2012 (“MTK platform’s first dual-core MT6575T, because of the importance of this dualcore, it changed its name to MT6577.”). 

949 In 2013, MediaTek sold over 118 million chips for which WCDMA was the highest standard, which was 

second only to Qualcomm. See Exhibit V.B.6. 

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.

950 However, with these chips, one 

MediaTek executive believed that its gap in LTE technology with Qualcomm was 

“narrowing.”951 Similarly, after MediaTek focused on the Helio P series in 2017, it displayed 

strong execution, and, according to the testimony of a MediaTek employee, the Helio P60 

substantially narrowed the gap in quality with the similarly targeted Qualcomm Snapdragon 

600 series.952 MediaTek has recently secured sales for Helio P series SoCs at Samsung, 

 This execution prowess in creating progressively higher-performing modem chips 

has also enabled MediaTek to shed an initially poor reputation for supplying low-performance 

chips to grey-market OEMs and join the set of modem chip suppliers considered for leading 

smartphones 

 

950 See, e.g., QNDCAL03572280, p. 8, email from Will Wyatt, Qualcomm, February 2, 2016, with attached 

presentation titled “FY16 Strat Pricing” 

 See also

951 See, e.g., Fried, Ina, “MediaTek Tried 10-Core Chip in Latest Bid to Crack High-End Phone Market,” Recode, 

May 12, 2015 (“‘We are certainly moving away from the whole image of being a low-cost provider,’ Bhushan 

said. Bhushan acknowledged Qualcomm still has an edge in LTE modem technology, but he said the gap is 

narrowing.”). See also Moynihan Deposition, MediaTek, p. 283 (“Q. Do you believe that MediaTek has closed 

the gap a lot on Qualcomm on the modem technologies? [...] A. Yes. I think the gap is probably a little bit 

shorter today than it was in 2010.”). 

952 See, e.g., Moynihan Deposition, MediaTek, pp. 53–55 (“Q. Is it your view, sir, that the Helio P60 will be -- will 

have as good a CPU as the Qualcomm Snapdragon 600 series? [...] A. [...] I do take the view that the Helio 

P60 probably presents to customers a CPU performance that may be in the ballpark of comparison with some of 

the products of the Snapdragon 600 family. [...] Q. Do you believe that the Helio P60 has multimedia 

capabilities comparable to those of the Qualcomm Snapdragon 600 series? A. Comparable is probably a good 

word. Yes.”) and p. 103 (“A. I think the, you know, the new Helio P product, that P60 product that we just 

announced, probably does start to compete with the Snapdragon 600 series.”). 

953 See, e.g., Exhibit V.C.14c. See also “Samsung Galaxy On Max with Helio P25 in India,” MediaTek, July 27, 

2017 (“Powered by the MediaTek Helio P25, the Samsung Galaxy On Max brings pictures alive, even in lowlight conditions [...].”). 

954 SFT-2366213–6219 at 6214, Samsung internal analysis of MediaTek 

955 

 

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4. Samsung / Samsung S-LSI 

a. Background 

360. Samsung has been involved in the semiconductor industry since the 1970s, and since the late 

1980s, telecommunications and semiconductor products have been among its core business 

lines.956 Samsung’s S-LSI division, designs modem chips and has provided foundry services, 

including services for outside chip suppliers.957 In 2017, Samsung reorganized its business 

units and separated foundry operations from the Samsung S-LSI unit.958 As of 2017, Samsung 

is the largest mobile device OEM, which also makes it the largest vertically integrated mobile 

device OEM.959 

361. .

960 By 1999, it was 

producing CDMA chips for its own devices.961 

 

956 Samsung first entered the Semiconductor industry in 1974 with the acquisition of Hankook Semiconductor. 

Samsung then made telecommunications and semiconductors part of its core business in 1988, when Samsung 

Semiconductor & Telecommunications Co. merged with Samsung Electronics. See, e.g., “Planting the Seeds,” 

Samsung. See also “History 1989-1980,” Samsung. 

957 See, e.g., Kim Deposition, Samsung, pp. 23–24 (“Q. And what does [Samsung S-LSI] do? A. They engaged in 

manufacturing their own products within that business division, System LSI, and also responsible for selling 

those. Q. And is one of those products modem chips for cellular devices? A. Yes, it is one of those.”). See also 

Kang Deposition, Samsung, p. 193 (“While you were at Samsung Mobile, were you aware that Samsung had a 

foundry business? A. Yes. I was. Q. What business unit within Samsung was responsible for the foundry 

business? A. Samsung LSI. Q. And were you aware, during your time at Samsung Mobile, of whether SLSI 

produced any chips for Qualcomm as part of the Samsung’s foundry business? A. Yes, I was.”). 

958 See, e.g., “About Us,” Samsung. See also “Samsung Electronics Finally Splits Foundry Business out of System 

LSI Division,” The Korea Economic Daily, May 12, 2017 (“Samsung Electronics will spin off its foundry 

operation from the System LSI division to create an independent business unit.”) 

959 Samsung sold almost 370 million mobile devices globally in 2017, the largest of any mobile device OEM. See 

Exhibit III.D.7. 

960 SFT-0016284-6296 at 6295 (translation), Samsung internal report titled “The Need to Develop In-House 

Modem,” Samsung, April 5, 2007 (“[:] August 1997: CDMA T/F was formed with 40 members (Mobile, S-LSI, 

Telecommunications Research Institute) [:] The T/F began to develop the IS-95A CDMA terminal modem as its 

in-house development objective.”). 

961 See, e.g., LaPedus, Mark, “Samsung to Develop Line of Wireless Chips,” EE Times, April 13, 1999 (“Hoping 

to lessen its dependence on Qualcomm Inc. in the wireless-chip arena, Samsung Electronics Co. Ltd. Has 

disclosed an aggressive strategy to develop components for its own CDMA-based handset lines. [...] Samsung 

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A 

 

 

362. In 2010, Samsung S-LSI was among the first suppliers to release an LTE modem chip.965 By 

2012, Samsung was using Samsung S-LSI LTE chips in some of its Galaxy S series phones, 

which had become its flagship mobile device family.966 Since that time, Samsung’s reliance 

on outside suppliers for modem chips for its devices has greatly decreased; while Samsung 

was self-supplying less than two percent of its modem chips in 2013, it was self-supplying 

almost 42 percent in 2017. 967 Additionally, in 2018 Samsung S-LSI introduced CDMA 

compatibility into at least two integrated Exynos SoCs.968 

 plans to develop its own line of digital-cellular chipsets [...]. [...] Last week Samsung said it has begun 

producing the SCom 3000 CDMA chip set [...].”). 

962 Lee Deposition, Samsung, p. 28

963 See, e.g., Q2014FTC03368158–8159 at 8158, email from Gerald Skiver, Qualcomm, October 10, 2002 (“Dr. 

Chun was previously the head of Samsung’s internal CDMA modem design team. Dr. Chun left Samsung and 

several key engineers on his team also left to form the new company, Eonex Technologies.”). See also 

Q2014FTC03369222–9223 at 9223, email from Marv Blecker, Qualcomm, October 9, 2001 (“[...] EoNex, a 

venture startup launched last April by former researchers at Samsung Electronics Co., SK Telecom and other 

firms[...].”). 

964 SFT-4857460 at 461 (translation), presentation titled “CDMA Acquisition History and Progress,” Samsung, 

January 27, 2016 (

965 See Exhibit V.B.7. 

966 See, e.g., SFT-12948733, p. 1, presentation titled “Samsung Modem Roadmap,” Samsung, July 2012 (“Galaxy 

S III LTE launched successfully with CMC221 + Pega Q combination in Korea[.]”). See also Dolcourt, Jessica, 

“Why Samsung’s U.S. Galaxy S III Has a Dual-Core Processor (and Why You Shouldn’t Care),” CNET, June 

6, 2012 (“In just a couple of weeks, the U.S. will receive its first Samsung Galaxy S III Smartphones. The 

flagship phones share most of the features of the global version of the device [...].”). 

967 See Exhibit IV.B.4. 

968 See, e.g., Frumusanu, Andrei, “Meizu Announces M6s with Exynos 7872,” AnandTech, January 17, 2018 

(“This is also the first time we’ve seen an Exynos SoC released with integrated CDMA capability [...].”). See 

also Frumusanu, Andrei, “Samsung Announces the Galaxy S9 and S9+,” AnandTech, February 25, 2018 

(“Indeed the Exynos 9810’s new modem supports CDMA.”). See also Mu-Hyun, Cho, “Samsung Boosts MidTier Exynos 7 AP with Deep Learning Image Processing,” ZDNet, March 22, 2018 (“It has a 6 mode modem 

that covers 2G DCMA to 4G LTE [...]”). See also “Mobile Processor Exynos 7 Series (7885)”, Samsung, 

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b. Analysis 

363. Samsung S-LSI displayed adequate foresight, substantial and sustained investment, and 

sufficient execution to develop and sell modem products for Samsung’s mobile devices. 

Samsung S-LSI’s LTE modem chips have recently come to be considered of high quality and 

are used extensively in its own mobile devices. However, adoption of Samsung S-LSI’s 

modem chips by other OEMs has been limited due to a lack of an integrated AP in earlier 

products as well as reported hesitation among mobile device OEMs to support and source 

modem chips from a competitor.

364. Foresight: Samsung S-LSI’s foresight has been mixed. Beginning with the release of its first 

CDMA chip in 1999, Samsung S-LSI continued developing modem chips that could eventually 

be used in Samsung’s mobile devices.969 

 

 available at http://www.samsung.com/semiconductor/minisite/exynos/products/mobileprocessor/exynos-7-

series-7885 (“The modem supports multi-modes from 2G to 4G including CDMA [...]”). 

969 See, e.g., LaPedus, Mark, “Samsung to Develop Line of Wireless Chips,” EE Times, April 13, 1999 (“Hoping 

to lessen its dependence on Qualcomm Inc. in the wireless-chip arena, Samsung Electronics Co. Ltd. Has 

disclosed an aggressive strategy to develop components for its own CDMA-based handset lines. [...] Samsung 

plans to develop its own line of digital-cellular chipsets [...]. [...] Last week Samsung said it has begun 

producing the SCom 3000 CDMA chip set [...].”). See also SFT-07563848 at 849 (translation), internal report 

titled “ Samsung, April 14, 2016 (

”). 

970 See, e.g., SFT-4857460 at 461, presentation titled “CDMA Acquisition History and Progress,” Samsung, 

January 27, 2016 

971 Kalkman Deposition, Samsung, pp. 239–240 

 

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365. Samsung S-LSI showed effective foresight in its early focus on LTE. Samsung S-LSI began 

to focus on producing LTE chips in 2006.972 By 2010, Samsung S-LSI had developed an LTE 

chip,973 and by 2013, Samsung began using its self-supplied LTE chips in the Galaxy Note 

series of mobile devices.974 

.

975 In late 2014 and early 2015, Samsung opted for an 

internally sourced non-integrated solution due to concerns over the performance of 

Qualcomm’s MSM8994 in the Galaxy S6.976 Samsung S-LSI increased the number of chips 

it supplied to Samsung every year from 2013, becoming Samsung’s largest supplier in 2017, 

when it supplied 42 percent of modem chips used in Samsung devices.977 

366. However, during this time, Samsung S-LSI’s modem chips at first did not provide certain 

features demanded by other OEMs. For example, in 2011, Samsung S-LSI had not yet 

developed an SoC solution, whereas other modem chip suppliers already had integrated 

designs, which concerned some potential customers.978 

 

972 See, e.g., SFT-4731218 at 1221 (translation), email from Jung-In Kim, Samsung, October 29, 201

973 See Exhibit V.B.7. 

974 Kang Deposition, Samsung, pp. 222–223 

. 

975 Kang Deposition, Samsung, pp. 87–89 

976 Kang Deposition, Samsung, p. 96 (“Q. And does that refresh your recollection that in late 2014 and early 2015, 

Samsung was unhappy with the performance of the MSM 8994 for the Galaxy S6 and, therefore, ultimately 

opted for an LSI two-chip solution for that phone? A. Yes, it does.”). 

977 See Exhibits IV.B.3 and IV.B.4. 

978 Kalkman Deposition, Samsung, pp. 239–24

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 Despite this, Samsung S-LSI has recently pursued efforts to expand its 

customer pool for modem chips, including via ongoing discussions with ZTE.980 Samsung SLSI has also sold components other than modem chips to outside OEMs, and in 2017, Samsung 

S-LSI announced plans to expand its contract manufacturing business in addition to growing 

its direct sales to other OEMs.981

367. Investment: Samsung has invested substantial amounts in its modem chip R&D. Although 

Samsung reportedly considered acquiring Infineon’s modem chip division in 2011,982 since the 

1990s, it has developed its products internally and largely without acquisitions. With access 

to over 20,000 engineers worldwide, Samsung spent $37 billion on all forms of R&D between 

2005 and 2010,983 and another $87 billion between 2011 and 2017.984 Samsung is expected to 

 See also Exhibits V.B.5 and 

V.B.7. 

979 See, e.g., “Customised Baseband Quarterly Market Share Tracker for Qualcomm: Parts 1 and 2,” Strategy 

Analytics, April 6, 2018. See also Kang Deposition, Samsung, pp. 152–153 

980 Lee, Joyce and Ju-Min Park, “Samsung in Talks with ZTE, Others to Supply Mobile Processor Chips: 

Executive,” Reuters, May 15, 2018 (“Samsung Electronics is in talks with several smartphone makers including 

China’s ZTE to supply mobile processor chips [...]”). 

981 See, e.g., Tibken, Shara, “Samsung Makes a Lot of Money from Chips, but Phones Struggle,” CNet, April 25, 

2018 (“[... Samsung] sells more memory chips than any other company on the planet.”). See also Deposition of 

Andrew Hong, Senior UX Program Manager at Samsung, March 7, 2018 p. 36 (Hong Deposition, Samsung,) 

 

Lee, Joyce and Se Young Lee, “Samsung 

Takes Aim at TSMC with Plans to Triple Chip Foundry Market Share,” Reuters, July 24, 2017 (“Samsung 

Electronics plans to triple the market share of its contract chip manufacturing business within the next five years 

by aggressively adding clients, a senior company executive said, as it targets new growth drivers for the chips 

business.”). 

982 “Samsung Electronics,” Macquarie Equities Research, November 17, 2011, p. 22 (“We understand that 

Samsung is keen on developing a baseband chip (modem chip) solution. In fact, many industry watchers 

believed that SEC was highly interested in Infineon’s baseband chip division (Wireless Solutions Business), 

which was later sold to Intel for US$1.4bn.”). 

983 Fried, Ina, “Samsung: Apple Didn’t Invent the Rectangle,” AllThingsD, July 31, 2012 (“They’ve spent $35 

billion in R&D from 2005 to 2010. Over 20,000 engineers working on R&D worldwide with more than 1,000 

designers.”). 

984 See Exhibit III.E.2 and associated backup. 

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participate in the development of 5G technology, and its R&D efforts have already yielded 

many related patents.985 

368. Execution: Samsung S-LSI’s effective execution allowed it to continue Samsung’s strategy of 

producing CDMA chips for its own devices through 2005.986 Samsung S-LSI released its first 

LTE chips by 2010, around the same time as other modem chip suppliers such as Qualcomm,987

though its chips trailed Qualcomm’s in features in the early 2010s. For example, Samsung SLSI’s early LTE chips did not have an integrated AP or backward compatibility with 3G 

standards, while Qualcomm released the MSM8960 modem chip, which had such features, in 

2012.988 Samsung S-LSI’s LTE chips continued to advance to the point that in 2014 Samsung 

started using its own Exynos chips rather than Qualcomm chips in some versions of its flagship 

Galaxy S phones.989 In 2015, Samsung S-LSI announced the Exynos 8 chip, which was its 

first LTE SoC.990 In 2016, a Bain presentation to Intel suggested that Samsung S-LSI would 

be one of the top four suppliers of SoCs by 2020,991 and in 2017, Samsung S-LSI announced 

 

985 “Top Companies Leading 5G Development,” Netscribes, November 9, 2017 (“What’s more interesting is that 

31% of 5G patents are assigned to only six companies. Samsung has a major share with over 600 patents and is 

followed by other large corporations such as Intel, Nokia, Huawei, Ericsson, and ZTE.”). 

986 See, e.g., SFT-07563848 (translation), internal report titled

987 See Exhibit V.B.7. 

988 “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 60 (“Qualcomm, Renesas 

Mobile, and Nvidia-Icera were the sole suppliers of multimode (MM) 3G and Cat 3 FDD-LTE basebands 

during 2012. Both GCT and Samsung shipped single-mode Cat 3 LTE basebands which, when paired with a 

3G baseband, offered equivalent functionality.”). See also Exhibit V.B.7. 

989 Kang Deposition, Samsung, p. 96 (“Q. And does that refresh your recollection that in late 2014 and early 2015, 

Samsung was unhappy with the performance of the MSM 8994 for the Galaxy S6 and, therefore, ultimately 

opted for an LSI two-chip solution for that phone? A. Yes, it does.”). See also “Galaxy S6 32GB (Verizon),” 

Samsung (“[...] while the lightning-fast Samsung Exynos 7420 Octa-core 64-bit processor delivers the most 

power and speed we’ve ever put in a smartphone.”). 

990 Cunningham, Andrew, “Samsung’s New Exynos 8 SoC Includes an LTE Modem and Its First Custom CPU”, 

Ars Technica, November 12, 2015 (“[...T]oday Samsung has announced its next-generation Exynos 8 SoC, the 

Octa 8890 [...] Samsung is integrating an LTE modem into the chip for the first time [...].”). 

991 

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the launch of the Exynos 8895, which Computerworld deemed “as good as [Qualcomm’s] 

Snapdragon 835, and better than MediaTek’s Helio X30.”992

5. HiSilicon 

a. Background 

369. HiSilicon Technologies (HiSilicon) is a fabless semiconductor vendor and a wholly owned 

subsidiary of Huawei, a Chinese company that is the world’s third-largest smartphone OEM 

and the second-largest network infrastructure supplier.993 Huawei established its internal chip 

design center in 1991 and founded HiSilicon in 2004 as a subsidiary from this design center.994

370. Aside from some early grey-market sales of its K3 reference design,995 HiSilicon has focused 

entirely on selling modem chips to Huawei.996 

 HiSilicon launched its first modem chip in 2006.998 In 2009, HiSilicon released the 

 

992 Shah, Agam, “Beyond Smartphones, Samsung Wants Its Exynos 9 Chip in VR Headsets,” Computerworld, 

March 1, 2017. 

993 See, e.g., “Company Overview,” HiSilicon. See also Huawei 2016 Annual Report, p. 60 (“Huawei Investment 

& Holding Co., Ltd. [...] is a limited liability company established in Shenzhen in the People’s Republic of 

China [...].”) and p. 95 (“Name of subsidiaries[:] [...] HiSilicon Technologies Co., Ltd. [...] Proportion of 

ownership interest[:] [...] 100% [...] Principal activities[:] [...] Development and sale of semiconductors.”); 

“Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 42 (“Huawei is the #3 

smartphone OEM and that helps HiSilicon achieve the scale needed to sustain expensive mobile chipset 

development. Further, Huawei is the second largest mobile infrastructure equipment supplier as well.”). 

994 Clarke, Peter, “HiSilicon Extends ARM Licenses for 3G/4G Comms,” EE Times, August 2, 2011 (“HiSilicon, 

formed in 2004 and previously Huawei’s ASIC design center since 1991, provides ASICs and applicationspecific standard products for communication networks and digital media.”). 

995 See, e.g., “Cellular Handset & Tablet Chip Markets,” Forward Concepts, 2012, p. 159 (“Many of the nonSmartphones in the Shanzhai [Chinese imitation and pirated brands and goods] Phone market are powered by a 

MediaTek chipset [...]. [...] Much of the Shanzhai Smartphone market activity has been dominated by 

Huawei’s HiSilicon K3 (Hi3611) Windows Mobile 6.1 reference solution.”). See also Jingjing, Zhou, “The 

History of China’s Chip Ups and Downs: China’s Star Market has Accounted for 60% of the Market, Huawei 

Carried the Banner,” China IT News, April 25, 2018 (“In 2009, Huawei launched the first K3 processor for the 

open market. Positioning competed with Spreadtrum and MediaTek to compete in the Shanzhai market. [...] 

Huawei did not use [K3] in its own products.”). 

996 See, e.g., “2015 LTE Baseband Competition Hotting up, Qualcomm’s Lead Shrinking,” Strategy Analytics, 

January 12, 2015, p. 5 (“HiSilicon and Samsung currently supply basebands to their respective in-house 

customers Huawei and Samsung Mobile only.”). 

997 

998 “Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 112. 

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K3, which supported Windows Mobile and combined its own AP with a modem from 

Spreadtrum or Infineon.999 By this time, HiSilicon also had a team of more than 1,200 

engineers focused on developing technologies such as LTE modem chips.1000 Reflecting this 

engineering effort, HiSilicon released LTE modem chips of increasing complexity: a singlemode LTE modem chip in 2011,1001 a multi-mode LTE/WCDMA modem chip in 2012,1002

and an LTE SoC in 2014.1003

371. After internally developing CDMA technology, HiSilicon added CDMA support to its multimode modem chips starting with the Kirin 960, released in 2016.1004 While HiSilicon provided 

chips for 45 percent of Huawei’s handsets in 2017 and has been Huawei’s largest chip supplier 

since 2016,1005 the company faced a recent setback when a Huawei deal to sell smartphones in 

the U.S. fell through. 1006 Despite this setback, HiSilicon’s year-over-year growth in the 

 

999 “HiSilicon Introduces Solution for Windows-based Smart Phone,” Free Online Library, July 7, 2009 (“Hisilicon 

announced its ‘Hisilicon K3’ solution in March this year. The solution is composed of a Hisilicon-designed 

application processor and a modem chip supplied by Spreadtrum [...] or Infineon [...]. Their modem chips 

support Windows Mobile 6.1 OS.”). 

1000 “Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 112 (“[HiSilicon] is also developing 

technologies such as long-term evolution (LTE) [...]. The company has dedicated a 1,200-strong R&D team to 

the segment, spread across centers located in China, India, Sweden and the US.”). 

1001 HiSilicon’s LTE modem was commercially sampled in Q4 2010 and available in mobile devices beginning in 

Q2 2011. See, e.g., Q2014FTC04417597, p. 30 (“Huawei[:] [...] Hi6910[:] CS Date[:] Q4’10[;] Modem[:] 

LTE only[;] 1st End Product Available[:] Fixed CPE device Q2’11”). 

1002 “HiSilicon Releases Leading LTE Multi-mode Chipset,” HiSilicon Press Release, February 27, 2012 

(“HiSilicon Technologies today releases Balong 710, the world’s first multi-mode chipset supporting 3GPP 

Release 9 and LTE Category 4 [...]. [...] Some leading features of Balong 710 are as following: LTE FDD 

mode [...] TD-LTE mode [...] WCDMA Dual Carrier with MIMO [...].”). 

1003 “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 221 (“HiSilicon, 

Huawei’s in-house silicon business unit, has launched its first LTE-integrated applications processors Kirin 910 

and Kirin 920 in 2014.”). 

1004 See, e.g., Cutress, Ian and Andrei Frumusanu, “Huawei Announces the HiSilicon Kirin 960: 4xA73 + 4xA53, 

G71MP8, CDMA,” AnandTech, October 19, 2016 (“Currently three smartphone modem providers have CDMA 

solutions (Qualcomm in integrated and discrete modems, Intel with discrete, Mediatek with VIA-based 

integrated), and we spoke with HiSilicon to confirm that this is a brand new custom CDMA solution, rather than 

a licensed platform.”). See also Triggs, Robert, “HiSilicon’s Kirin 960 is Ready to Take on Samsung and 

Qualcomm,” Android Authority, October 31, 2016 (“Huawei has boosted the performance of its latest LTE 

modem and has also introduced support for CDMA technology [...]. [...] HiSilicon has created its own custom 

CDMA solution.”). 

1005 See Exhibits IV.B.3 and IV.B.4. 

1006 See, e.g., Mozur, Paul, “AT&T Drops Huawei’s New Smartphone Amid Security Worries,” The New York 

Times, January 9, 2018 (“AT&T walked away from a deal to sell the Huawei smartphone, the Mate 10, to 

customers in the United States just before the partnership was set to be unveiled [...]. [...L]ast month, a group 

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number of modem chips sold has outpaced most modem chip suppliers over the 2014–2017 

period.1007 

b. Analysis 

372. HiSilicon’s success has been due to its strong foresight, substantial and strategic investments, 

and consistent ability to execute its chip development and design. HiSilicon gained experience 

from supplying modem chips for a broad variety of Huawei mobile devices and internally 

developed its own CDMA technology, thus unlocking new potential sales in multi-mode LTE 

chips. HiSilicon has invested heavily in developing technology, including through a large team 

of engineers, and has reliably brought new products with demanded features to market year 

after year. 

373. Foresight: Since its formation, HiSilicon has shown strong foresight that has helped to sustain 

and grow its business. First, HiSilicon showed foresight by providing Huawei with modem 

chips that fit Huawei’s needs. 

1008 In addition to supplying Huawei’s flagship mobile devices with its 

900-series Kirin SoCs,1009

 of lawmakers wrote a letter to the Federal Communications Commission expressing misgivings about a 

potential deal between Huawei and an unnamed American telecommunications company to sell its consumer 

products in the United States.”). See also Stolyar, Brenda, “U.S. lawmakers reportedly pressure AT&T to 

completely cut ties with Huawei,” Digital Trends, January 16, 2018 (“The news comes after AT&T was 

reportedly pressured into dropping the deal earlier this month − due to a letter written by a group of lawmakers 

to the Federal Communications Commission expressing their concerns over Huawei’s plans to sell its products 

through a U.S. carrier [...]. The letter specifically cited Huawei’s ties to the Chinese government − a concern 

that has caused the company difficulty breaking into the U.S. in the past.”). 

1007 See Exhibit IV.B.5. 

1008 

1009 See, e.g., R, Rahul, “Huawei Ascend Mate 3 Expected to Go Official on 4 September: Flagship Smartphone to 

Feature 6.1in Display and 13MP Camera,” International Business Times, August 18, 2014 (“Another aspect that 

people can look out for in the next Ascend Mate is the Huawei Kirin 920 octa-core processor, which was 

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1010 Due in part to its foresight and planning, HiSilicon has 

progressively increased the number of chips it has supplied to Huawei in each year since at 

least 2013.1011 Going forward, Huawei has indicated that it will continue to source chips from 

HiSilicon as part of a “multi-vendor strategy” that includes purchasing modem chips from 

HiSilicon, MediaTek, and Qualcomm.1012

374. More recently, HiSilicon has demonstrated foresight in its development of CDMA technology 

for use in multi-mode chips. 

.

1013 While modem chip 

 recently made official by Huawei.”). See also “Global 4G Subscriber & Smart Device Market Update,” 

Forward Concepts, 2015, p. 43 (“The Ascend Mate 8 [...] smartphone introduced October 2015 embeds the 

Kiriin930 [sic] platform. [...] The Ascend Mate 7 was among the first Huawei smartphone[s] to embed the 

earlier Kirin 925 [...] in September of 2014. The Honor 6 Plus PE embedded the chips in December of 2014 

[...].”); Humrick, Matt, “The Huawei Mate 9 Review,” AnandTech, January 27, 2017 (“Making its debut inside 

the Mate 9’s aluminum chassis is HiSilicon’s new Kirin 960 SoC.”); Cutress, Ian, “Hands-on & More with 

Huawei’s Mate 10 and Mate 10 Pro: Kirin 970 Meets Artificial Intelligence,” AnandTech, October 16, 2017 

(“[...] Huawei is taking the wraps off of their latest generation flagship smartphone, the Mate 10 series. 

Powered by subsidiary HiSilicon’s 970 SoC [...].”). 

1010 See, e.g.,

 See also Cragg, Oliver, “Huawei P Smart with 

EMUI 8.0, FullView display launches on Vodafone UK,” Android Authority, February 1, 2018 (“The Huawei P 

Smart is coming to the UK in partnership with Vodafone. The budget device, which is available on various 

contract plans or on Pay as you go for £229. [...] The UK model is powered by the Chinese giant’s octa-core 

Kirin 659 chipset [...].”); Van Camp, Jeffrey, “Review: Honor 7X,” Wired, February 22, 2018 (“[...] I was 

excited to check out the new Honor 7X, an affordable phone that promises to run fast. [...] A $200 device with 

most of the cutting-edge features is still the holy grail of the smartphone world. [...] [A]nd now Honor wants 

to join the club. [...] When you first boot it up, the 7X is snappy, running on 2016’s Android 7.0 with 

Huawei’s Emotion UI interface slapped on top, 3GB of RAM, 32GB of internal memory (with MicroSD slot), 

and a custom eight core Kirin 659 processor [...].”). 

1011 See Exhibit IV.B.4. 

1012 Tao, Li and Yingzhi Yang, “Huawei Has Been Building Its Substitute to Android for a Rainy Day. Is That Day 

Looming?,” South China Morning Post, April 27, 2018 (“[Huawei] will continue to buy chip sets from [...] 

Qualcomm and [...] MediaTek [...]. Its Kirin chips will be used on its own smartphones and not sold to 

external customers [...]. ‘We remain committed to this multi-vendor strategy, as it is critical to ensure healthy 

development of the smartphone business,’ Huawei’s rotating chairman Eric Xu said [...].”). 

1013 See, e.g.,

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suppliers such as MediaTek and Intel elected to acquire CDMA technology from another chip 

supplier, 1014 as discussed above, 

1015 Since most Chinese customers demand mobile devices that support 

all wireless standards used in China, including CDMA,1016

1017 Although 

HiSilicon’s investment in CDMA has not yet allowed HiSilicon to sell modem chips in the 

U.S. or Canada,1018 this appears to stem from geopolitical factors rather than from any issues 

 

1014 See Section V.C.2 and Section V.C.3. 

 

 

1016 

1017

1018 “Baseband/Modem & Smartphone Market,” Forward Concepts, 2017, p. 85 (“There were two models using the 

Kirin960 and supporting the CDMA EVDO RA baseband modem, but it is noted that CDMA EVDO RA usage 

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related to HiSilicon’s CDMA solution. Huawei attempted to negotiate a deal with AT&T to 

sell its smartphones in the U.S., but the deal fell through in early 2018, reportedly due to 

national security concerns voiced by U.S. lawmakers.1019

375. Investment: Although HiSilicon’s early modem chips did not achieve much commercial 

success,1020 the company’s substantial investment in LTE put it in a position to succeed with 

the new standard. As a result, the company’s Kirin LTE SoCs are now on the cutting edge of 

modem chip technology.1021 Moreover, HiSilicon receives consistent support from its parent 

company Huawei, and even though HiSilicon does not sell its modem chips to other OEMs, 

industry analysts assert that Huawei’s position as the world’s third-largest smartphone OEM 

affords HiSilicon the scale and funding necessary to continue investing in R&D.1022

 in North America requires a 9-month certification process. Huawei has little or no market in Canada or the 

United States.”). 

1019 See, e.g., Mozur, Paul, “AT&T Drops Huawei’s New Smartphone Amid Security Worries,” The New York 

Times, January 9, 2018 (“AT&T walked away from a deal to sell the Huawei smartphone, the Mate 10, to 

customers in the United States just before the partnership was set to be unveiled [...]. [...] [L]ast month, a 

group of lawmakers wrote a letter to the Federal Communications Commission expressing misgivings about a 

potential deal between Huawei and an unnamed American telecommunications company to sell its consumer 

products in the United States.”). See also Stolyar, Brenda, “U.S. lawmakers reportedly pressure AT&T to 

completely cut ties with Huawei,” Digital Trends, January 16, 2018 (“The news comes after AT&T was 

reportedly pressured into dropping the deal earlier this month − due to a letter written by a group of lawmakers 

to the Federal Communications Commission expressing their concerns over Huawei’s plans to sell its products 

through a U.S. carrier [...]. The letter specifically cited Huawei’s ties to the Chinese government − a concern 

that has caused the company difficulty breaking into the U.S. in the past.”). 

1020 See Exhibit V.C.5. 

1021 See, e.g., Triggs, Robert, “HiSilicon’s Kirin 960 Is Ready to Take on Samsung and Qualcomm,” Android 

Authority, October 31, 2016 (“[...T]he Kirin 960’s LTE modem supports Category 12 download, with 4x 

carrier aggregation, 4x4 MIMO, 256 QAM spatial stream modulation, and download speeds up to 600Mbps. 

The SoC also boasts Category 13 upload capabilities, which tops out at 150Mbps. This is right in the same 

category as the Snapdragon 820 and Exynos 8890.”). See also Real, Mark, “Kirin 970 Is the First Mobile SoC 

That Supports Cat. 18 LTE,” Android Headlines, September 18, 2017 (“Huawei’s Kirin 970 processor attained 

maximum data speeds of 1.2Gbps in a test conducted with the equipment supplier Rohde & Schwarz (R&S). 

This makes the Kirin 970 as the first smartphone chipset to formally support Category 18 LTE. In contrast, 

Qualcomm’s current flagship product, the Snapdragon 835, supports Category 16 downlink LTE, and can 

achieve maximum download speeds of 1Gbps.”). 

1022 See, e.g., “Global 4G Subscriber & Smart Device Market Update,” Forward Concepts, 2015, p. 42 (“Huawei 

sees HiSilicon as a strategic investment and has been supporting it consistently. First Huawei is the #3 

smartphone OEM and that helps HiSilicon achieve the scale needed to sustain expensive mobile chipset 

development.”). See also Tao, Li and Yingzhi Yang, “Huawei Has Been Building Its Substitute to Android for 

a Rainy Day. Is That Day Looming?,” South China Morning Post, April 27, 2018 (“Huawei has one of the 

largest research budgets in technology, spending US$14.2 billion [in 2017] on research and development [...]. 

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376. Execution: HiSilicon has shown a consistent ability to execute in its chip development. 

HiSilicon has steadily improved the quality of its chips to the point where its 2016 and 2017 

Kirin 900-series offerings, the Kirin 960 and Kirin 970, respectively, were considered by 

industry analysts to be competitive with any other available modem chip.1023 HiSilicon’s 

development of CDMA technology also illustrates its strength in execution; 

6. ST-Ericsson / Ericsson 

a. Background 

377. ST-Ericsson was created in 2009 as a 50/50 joint venture between Swedish network 

infrastructure provider Ericsson and French/Italian semiconductor company 

STMicroelectronics. 1025 ST-Ericsson was the culmination of several modem chip-related

acquisitions and joint ventures by its parent firms:1026 

a. In 2001, Ericsson and Sony merged their mobile device businesses (with the 

exception of Ericsson’s mobile platform unit) to form the Sony Ericsson joint 

 [...] As a result of that spending, Huawei’s HiSilicon unit, a Shenzhen-based semiconductor company, was 

able to develop the Kirin chip, which has increasingly been used in its namesake handsets [...].”). 

1023 See, e.g., Triggs, Robert, “HiSilicon’s Kirin 960 Is Ready to Take on Samsung and Qualcomm,” Android 

Authority, October 31, 2016 (“The Kirin 960 is undoubtedly HiSilicon’s best SoC to date, thanks to a range of 

new high-end features, and it handily competes with the best SoCs on the market right now.”). See also 

Frumusanu, Andrei, “HiSilicon Kirin 970 – Android SoC Power & Performance Overview,” AnandTech, 

January 22, 2018 (“HiSilicon’s new [Kirin 970] proves itself as an excellent smartphone SoC that’s well-able to 

compete with Qualcomm’s and Samsung’s best SoCs.”). 

1024 

1025 See, e.g., STMicroelectronics, 20-F, 2009, p.11. See also “Ericsson and STMicroelectronics to Create World 

Leader in Semiconductors and Platforms for Mobile Applications,” Ericsson Press Release, August 20, 2008; 

“About Us,” Ericsson; “Ericsson Sweden,” Ericsson; “Who We Are,” STMicroelectronics. 

1026 See Exhibit III.D.1. 

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venture.1027 Ericsson used the residual mobile platform R&D group to establish the 

chip design and mobile platform team Ericsson Mobile Platforms (EMP).1028 EMP 

would eventually become part of the ST-Ericsson joint venture. 

b. STMicroelectronics historically designed and manufactured multimedia APs and 

connectivity chips,1029 and it began designing modem chips in late 2007.1030 In 

August 2008, it merged its modem chip business with that of chip vendor NXP in 

an 80/20 joint venture under the name ST-NXP.1031 Shortly after the ST-NXP joint 

venture was announced, STMicroelectronics and Ericsson announced a 50/50 joint 

venture merging their respective modem chip businesses ST-NXP and EMP to 

create ST-Ericsson.1032,1033 

378. The stated goal of the ST-Ericsson joint venture was to create a world leader in the modem 

chip industry through increased scale, relationships with a wider set of customers, and the 

 

1027 See, e.g., “Sony and Ericsson Complete Joint Venture Agreement,” Sony Press Release, August 28, 2001 

(“Sony Corporation and Telefonaktiebolaget LM Ericsson today announced that they have agreed terms to 

merge their mobile phone businesses worldwide [...]. The two companies which signed their Memorandum of 

Understanding in April are well on schedule and set to establish the joint venture, Sony Ericsson Mobile 

Communications [...].”). See also “Ericsson and Sony to Create World Leader in Mobile Phones,” Sony Press 

Release, April 24, 2001 (“Ericsson’s Mobile Technology Platform unit will remain as a separate organization 

and will supply state of the art technology to the new company.”). 

1028 Kornby, Michael, “The EMP Story,” Ericsson Review, 2005 (“Established in September 2001, Ericsson Mobile 

Platforms is based on the research and development (R&D) group that developed the core technology for 

Ericsson’s mobile phones throughout the 1990s.”). 

1029 STMicroelectronics, 20-F, 2006, p. 26 (“We offer a family of products, known as the ‘Nomadik’ family, 

addressing the market for multimedia application processor chips. [...] To respond to the market need for 

increased functionality of handsets, we created the Connectivity Division to address wireless LAN (‘WLAN’), 

Bluetooth and connectivity requirements.”). 

1030 STMicroelectronics began modem chip design when Nokia, its leading customer, transferred approximately 185 

engineers to STMicroelectronics to design and manufacture WCDMA modem chips. See, e.g., 

STMicroelectronics, 20-F, 2006, p. 12 (“As of December 31, 2006, our largest customer was Nokia, which 

accounted for 21.8% of our 2006 net revenues, compared to 22.4% in 2005 and 17.1% in 2004.”). See also 

“Nokia and STMicroelectronics Close the Agreement in 3G Chipset Development,” Nokia Press Release, 

November 5, 2007. 

1031 See, e.g., “STMicro, NXP Merge $3 Bln Wireless Chip Operations,” Reuters, April 10, 2008 

(“STMicroelectronics (STM.PA) and NXP NXP.UL will merge their wireless chip businesses into a $3 billion 

joint venture controlled by STMicro [...]. STMicro said it would pay NXP $1.55 billion to own 80 percent of 

the venture [...].”). See also STMicroelectronics, 20-F, 2009, p. 26 (“The wireless segment resulted from the 

combination of our wireless business with NXP’s to create ST-NXP Wireless as of August 2, 2008.”). 

1032 “Ericsson and STMicroelectronics to Create World Leader in Semiconductors and Platforms for Mobile 

Applications,” Ericsson Press Release, August 20, 2008 (“STMicroelectronics (NYSE:STM) and Ericsson 

(NASDAQ:ERIC) today announced an agreement to merge Ericsson Mobile Platforms and ST-NXP Wireless 

into a joint venture. The 50/50 joint venture [...].”). 

1033 Since ST-NXP was an 80/20 joint venture between ST and NXP, ST acquired NXP’s remaining shares in STNXP in the process of forming ST-Ericsson. See STMicroelectronics, Form 20-F, for the fiscal year ended 

December 31, 2009, p. 9. 

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combination of complementary product offerings.1034 The joint venture initially sold legacy 

products from its parent companies, including multimedia and connectivity chips as well as 

GSM, WCDMA, and TD-SCDMA modem chips.1035 

379.

.

1036 

.

1037 

 

1034 See, e.g., “Ericsson and STMicroelectronics to Create World Leader in Semiconductors and Platforms for 

Mobile Applications,” Ericsson Press Release, August 20, 2008 (“‘By combining the complementary strengths 

and product offerings of Ericsson and ST in platforms and semiconductors the joint venture is well positioned to 

become a world leader,’ said Carl-Henric Svanberg, President and CEO of Ericsson. ‘The industry continues to 

develop at a swift pace and customers see benefits from our broad offering. This partnership is a perfect fit and 

secures a complete offering, as well as the necessary scale for technology leadership.’”). See also Zander 

Deposition, Ericsson, pp. 42–43 (“Q. What was the reason that Ericsson had for establishing the STMicro joint 

venture? [...] A. [...A]nother reason was that STMicroelectronics at that time had consolidated several assets, 

for example the NXP wireless they acquired, and they have also acquired the digital baseband team from Nokia, 

they had acquired connectivity assets such as Wi-Fi, Bluetooth. So by creating the joint venture with 

STMicroelectronics that also gave access to a customer base that was wider than the [...] Ericsson mobile 

platform customer base.”). 

1035 See, e.g., “Ericsson and STMicroelectronics to Create World Leader in Semiconductors and Platforms for 

Mobile Applications,” Ericsson Press Release, August 20, 2008 (“In the joint venture, ST contributes its 

industry-leading multimedia and connectivity solutions as well as a complete world-class 2G/EDGE platform 

and strong 3G offering [...]. Ericsson contributes its industry-leading 3G and LTE platform technology [...].”). 

See also Exhibit V.C.6. 

1036 See, e.g., Zander Deposition, Ericsson, pp. 45–46

p. 73 

), and 

p. 172

1037 See, e.g., Q2014FTC03837571–7600 at 7596, email from Jim Lederer, Qualcomm, February 28, 2011, with 

attachment titled “QCT Competitive Update” 

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.

1038 

. 1040 

,

1041 and did not result in meaningful LTE sales as ST-Ericsson shipped fewer 

than 300 LTE-compatible chips each year from 2010 through 2013.1042

380. By 2012, ST-Ericsson’s GSM and TD-SCDMA modem chip sales had fallen significantly.1043 

, 1044 STMicroelectronics 

announced its decision to leave the joint venture in late 2012,1045 and ST-Ericsson officially 

 

 See also ERIC-QCOM-00041193–1290 at 1276, presentation titled “STEricsson Board Meeting,” ST-Ericsson, January 20, 2012. 

1038 See, e.g., Q2014FTC03837571–7600 at 7596, email from Jim Lederer, Qualcomm, February 28, 2011, with 

attachment titled “QCT Competitive Update” 

1039 “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 74 (“The first M700 chip set 

supported LTE UE Class3 Release 8 (100 Mbps downlink and 50 Mbps uplinks) interface but did not integrate 

3G HSPA legacy modem technology.”). 

1040 ERIC-QCOM-00040884–0947 at 0888,

1041 

ee also ERIC-QCOM-0042033, p. 6, 

1042 See Exhibit V.C.6. 

1043 See Exhibit V.C.6. 

1044 Zander Deposition, Ericsson, p. 46

1045 “STMicroelectronics: ST Announces New Strategic Plan,” Yahoo Finance via Marketwire, December 10, 2012 

(“‘Today we are announcing the new ST, aligned with the new market environment,’ said Carlo Bozotti, 

President and CEO of ST. ‘Based on that, we have made the decision to exit ST-Ericsson after a transition 

period.’ [...] ‘The new ST will be more focused, leaner and better positioned to deliver value to our customers 

and our shareholders, targeting to rapidly achieve operating margins of 10 percent.’”). 

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dissolved in early 2013. 1046 In the split, STMicroelectronics assumed the legacy 2G/3G 

modem business, RF and power management chips, and the NovaThor integrated APs.1047 

STMicroelectronics continued to provide support for these legacy products but ceased effort 

to develop new models.1048 Ericsson continued to develop LTE thin modems on its own, but

eventually decided to exit the thin modem business in September 2014 and pursue growth 

opportunities in other areas.1049

b. Analysis 

381. ST-Ericsson made crucial errors in foresight, investment, and execution. ST-Ericsson was 

overly dependent on certain customers, experienced critical R&D inefficiencies, and was 

constantly delayed in product development, resulting in a dissolution of the joint venture in 

early 2013. After developing an LTE thin modem on its own, Ericsson decided that 

uncertainties stemming from thin modem customer concentration made investing in its 

network infrastructure business a less risky alternative to staying in the modem chip industry. 

382. Foresight:

 

1046 O’Brien, Kevin J., “Ericsson and ST Microelectronics to Dissolve Venture,” The New York Times, March 18, 

2013 (“Ericsson and STMicroelectronics announced plans on Monday to dissolve their unprofitable four-yearold Swiss venture, ST-Ericsson [...].”). 

1047 See, e.g., Kundojjala, Sravan, “The Breakup of ST-Ericsson,” Strategy Analytics, March 18, 2013 (“STMicro 

will oversee the existing products including legacy modem business, RF, Power Management and NovaThor 

integrated apps processors.”). 

1048 See, e.g., Clarke, Peter, “ST Takes 2G and 3G, Ericsson Gets LTE Modem,” EE Times Asia, March 20, 2013 

(“In a conference call earlier this week, STMicroelectronics Carlo Bozotti assured that existing products and 

customers will continue to be supported though the company will cease development of complete hardwaresoftware platforms for mobile equipments.”). 

1049 See, e.g., “Ericsson and STMicroelectronics Complete Transaction to Split Up ST-Ericsson,” Ericsson Press 

Release, August 5, 2013 (“Effective August 2, 2013 Ericsson has taken on the design, development and sales of 

the LTE multimode thin modem solutions, including 2G, 3G and 4G interoperability.”). See also “Ericsson 

Discontinues Development of Modems - Shifts Part of Investment into Radio Networks,” Ericsson Press 

Release, September 18, 2014 (“Ericsson [...] today announced it will discontinue future development of 

modems and shift parts of resources in modems to radio network R&D to better capture growth opportunities in 

this area.”). 

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.

1050,1051 However, industry analysts noted that when Nokia and Sony 

Ericsson began losing share in mobile device sales, ST-Ericsson’s sales dropped concurrently, 

as there were fewer Nokia and Sony Ericsson mobile devices into which it could sell chips.1052 

In addition to Nokia’s falling device sales harming ST-Ericsson’s non-modem chip sales, 

Nokia made the abrupt decision to migrate its devices to the Windows Phone 7 operating 

system. 

.”1053 Additionally, many of ST-Ericsson’s early customers for TDSCDMA modem chips were non-Chinese device OEMs, which lost sales as the demand in 

 

1050 See, e.g., ERIC-QCOM_SDCA-00042073–2163 at 2146, presentation titled “ST-Ericsson Board Meeting,” STEricsson, April 20, 2012. See also ERIC-QCOM-00041734, presentation titled “ST-Ericsson Board Meeting 

Briefing,” Ericsson, October 19, 2012, p. 18. 

1051 ST-Ericsson’s sales to Nokia consisted mainly of products such as RF chips. However,

. See, e.g., 

Zander Deposition, Ericsson, pp. 59–60

 See also Q2014FTC03837571–

7600 at 7596, email from Jim Lederer, Qualcomm, February 28, 2011 with attachment titled “QCT Competitive 

Update” 

1052 See, e.g., Kundojjala, Sravan, “The Breakup of ST-Ericsson,” Strategy Analytics, March 18, 2013 (“In 

retrospect, we think that Ericsson and ST Micro’s venture to create a European cellular chip powerhouse was 

always going to be a challenge, one that ultimately ended in failure, not just because of the difficulty of 

integrating disparate cultures from different companies, but also because the formation of ST-Ericsson 

coincided with a drastic decline in the joint-venture’s top customers, Nokia and Sony Ericsson (now Sony).”). 

See also Taylor, Chris, “ST-Ericsson Responds to Dimming Prospects with More Cost-Cutting, Focus on New 

Technology,” Strategy Analytics, June 4, 2012 (“ST-Ericsson’s main customers lost market share in 2011, 

among these Nokia and Sony-Ericsson, accounting for much of ST-Ericsson’s loss of sales.”). 

1053 See, e.g., Q2014FTC03837571–7600 at 7596, email from Jim Lederer, Qualcomm, February 28, 2011 with 

attachment titled “QCT Competitive Update” 

 See also ERICQCOM-00040883, p. 3, “ST-Ericsson Board Members Briefing,” Ericsson, October 2011 

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China moved away from foreign suppliers.1054 ST-Ericsson’s TD-SCDMA shipments fell, 

losing an opportunity to capitalize on the growing TD-SCDMA shipments industry-wide.,1055

383. After the split of ST-Ericsson in 2013, Ericsson inherited the LTE thin modem product line, 

which some at Ericsson considered to be synergistic with the network infrastructure 

business.1056 The company continued development of the M7450 LTE modem chip started by 

ST-Ericsson.1057 Ericsson completed the M7450 and achieved a design win at Samsung,1058

.”1060 Overall, there was uncertainty 

 

1054 “Cellular Handset & Tablet Chip Markets,” Forward Concepts, April 2012, p. 118 (“ST-Ericsson’s shipments in 

TD-HSPA declined from 2010 as the midrange market shifted away from foreign suppliers Samsung, Motorola, 

HTC and Nokia, leaving them with Huawei as their only active bidder.”). 

1055 Sales of modem chips for which TD-SCDMA was the highest standard across all firms rose from 18 million in 

2009 to 95 million in 2012. During the same period, ST-Ericsson’s share of sales of chips for which 

TD-SCDMA was the highest standard fell from 37 percent to three percent. See Exhibit V.C.6 and associated 

backup. 

1056 Zander Deposition, Ericsson, p. 207 (“Q. And so why was Ericsson focusing on LTE multimode thin modems 

for smartphones and tablets at this time? A. [...O]ur strategic interest in ST-Ericsson was the cellular 

technology that supported our radio business, and with the technology leadership that Ericsson has in its radio 

business we also had an interest of having a corresponding modem to support that business, hence we wanted to 

focus on the latest technologies with the most reference to our core business.”). 

1057 Zander Deposition, Ericsson, p. 57 (“Q. [...] Do you recall whether ST-Ericsson joint venture was able to 

deliver the M7450 technologies? A. The M7450 was finalized and commercially launched after the joint 

venture was terminated.”) and p. 108 (“Q. And then did Ericsson invest more to commercialize that product? 

A. [...W]e execute and then we brought 7450 to the market, and to -- to determine, you know, if -- if that would 

be a good foundation to increase the bets.”). 

1058 ERC-CID-00000313, document titled “Item 5.2 Modems Update,” Ericsson (“In September 2013 we presented 

the outcome from the break-up of ST-Ericsson, strategic options for Modems and a step-wise approach for 

value creation. The direction was to bring M7450 to market and explore potential license/modules. BMOD has 

executed well on the stepwise value creation plan and successfully validated the 7450 modem on the market 

with initial commercial ramp together with Samsung.”). 

1059 

1060 

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to staying in the thin modem business. According to an Ericsson executive, demand for thin 

modems came primarily from Apple and Samsung, and their procurement policies made 

winning business with them unpredictable and costly.1061 

1062

384. Investment: 

 

 

 

1061 Zander Deposition, Ericsson, p. 144 

 

1062 Zander Deposition, Ericsson, p. 102

1063 Zander Deposition, Ericsson, pp. 171–172

1064 ERIC-QCOM-00040884–0947 at 0900, 

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.”1065

385. Furthermore, since the company was formed by merging the wireless units of EMP, NXP, and 

STMicroelectronics, it inherited numerous legacy R&D sites.1066 

 

.

1068 Three years into its existence, ST-Ericsson announced a new 

strategic direction to attempt to address some of these issues. With the new strategic direction, 

ST-Ericsson planned to focus on its modem chips integrated with APs and to both reduce 

operating expenses and improve R&D execution by consolidating R&D sites.1069

 

1065 ERIC-QCOM-00040884–0947 at 0901,

1066 Clarke, Peter, “ST-Ericsson to Close R&D Sites,” EE Times, July 27, 2011 (“ST-Ericsson is 50:50 joint venture 

between STMicroelectronics NV and Ericsson AB and also includes employees from NXP’s wireless business 

that were wrapped up into ST-NXP prior to the formation of ST-Ericsson in February 2009. As such, it has 

numerous legacy sites in France, Switzerland, the United Kingdom and China and the far-east.”). 

1067 Zander Deposition, Ericsson, p. 46

 p. 172 (

1068 Zander Deposition, Ericsson, pp. 45–46 

and p. 73 

1069 “Ericsson’s JV ST-Ericsson Announces New Strategic Direction,” Ericsson Press Release, April 23, 2012 (“The 

new strategic direction leverages on ST-Ericsson’s unique capability to deliver complete system solutions for 

smartphones and tablets; competitive integrated modem plus application processor solutions (ModAp) will be 

the key differentiating offering through a combined approach of development and alliances. [...] In addition to 

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386. Execution: ST-Ericsson made key missteps in execution that tie strongly to its failure as a joint 

venture. Despite strong initial sales of both GSM and TD-SCDMA modem chips, ST-Ericsson 

failed to consistently execute in modem chip development, losing out on potential sales and 

profits. After being established, ST-Ericsson continued to sell legacy GSM modem chips, 

which originally accounted for the vast majority of modem chips shipped. 1070 Though 

ST-Ericsson was attempting to reconcile overlapping product portfolios and develop new 

smartphone SoCs,1071 it was late to add features such as dual-SIM support and multimedia 

capabilities to its 2G products.1072 Correspondingly, in 2012, ST-Ericsson’s GSM business 

suffered a sharp drop in the number of modem chips shipped.1073

 this strategy change, the company will focus on improving R&D execution and accelerating time-to-market, 

while reducing the overall operating expenses. The activities will be consolidated into a significantly smaller 

number of sites, which will be specialized by technology as ‘centers of excellence.’”). 

1070 See Exhibit V.C.6. 

1071 See, e.g., Taylor, Chris, “ST-Ericsson Responds to Dimming Prospects with More Cost-Cutting, Focus on New 

Technology,” Strategy Analytics, June 4, 2012 (“In its haste to rationalize three overlapping product portfolios, 

ST-Ericsson did not protect its legacy 2G, 2.5G and 3G products adequately, suffering a rather precipitous drop 

in sales in 2011.”). See also “Cellular Handset & Tablet Chip Markets,” Forward Concepts, 2012, p. 103 (“STEricsson is suffering as sales of older chip lines decline, while its newer Smartphone and tablet chips are just 

getting started in late 2011.”). 

1072 See, e.g., “Cellular Handset & Tablet Chip Markets,” Forward Concepts, 2012, p. 122 (“The monolithic singlechip suppliers, namely Intel now and ST-Ericsson, lagged in supporting Dual-SIM receiver capability[.]”) and 

p. 130 (“Broadcom [...] ha[d] the unique advantage of H.264 decoding and GPRS/EDGE Class 32 support. STEricsson only recently introduced the E4915 supporting H.264 video playback.”). See also “Cellular Handset & 

Chip Markets,” Forward Concepts, 2011, p. 122 (“In 2G [MediaTek] gained an advantage by embedding a lowcost 54-MHz ARM7, adding very basic multimedia features at a lower cost than the ULC competition. Adding 

early VGA-2MP camera support, MP3 Music, and small screen video playback features quicker and for less 

money than Infineon or ST-Ericsson.”). 

1073 In 2012, ST-Ericsson shipped fewer than 80 million GSM-only modem chips (6.6 percent of all GSM-only 

chips shipped in 2012), which was a marked decrease from the 123 million GSM-only modem chips it sold in 

2009 (12.4 percent of all GSM-only chips shipped in 2009). See Strategy Analytics, “Baseband Market Share 

Tracker Q1 2018: Samsung LSI Overtakes MediaTek,” June 2018. 

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387. NXP also brought TD-SCDMA experience to ST-Ericsson,1074 and the joint venture took 

further steps to capitalize on that experience.1075 While ST-Ericsson had a strong initial 

position, TD-SCDMA volumes were relatively small across the industry.1076 As industry-wide 

TD-SCDMA shipments grew, ST-Ericsson lost a large volume of sales to Spreadtrum and 

Marvell.1077 In addition to the aforementioned shift in TD-SCDMA away from non-Chinese 

mobile device OEMs, industry analysts noted that Spreadtrum and Marvell were also able to 

develop superior products, providing compatibility with newer operating systems and 

supporting updated standards such as TD-HSPA and TD-LTE.1078 

 

1074 In 2003, Philips Semiconductors (which would later spin off from Philips Electronics to become NXP) 

partnered with Datang Mobile Communications and Samsung to create the T3G joint venture intended to design 

and license chipsets for China’s developing TD-SCDMA standard. Later on, NXP also worked independently 

with T3G to design TD-SCDMA modem chips. See, e.g., Walko, John and Mike Clendenin, “Joint Venture 

Gives China’s 3G Spec a Boost,” EE Times, January 23, 2003. See also “China Receives NXP-T3G TDSCDMA Solution,” EE Times Asia, May 29, 2008 (“Building on their leadership in TD-SCDMA, NXP 

Semiconductors and T3G Technologies have announced that the next-generation 3G cellular system solution 

T3G7208 is now commercially available in China.”). 

1075 ST-Ericsson bought out T3G in late 2008, as the joint venture was still coming together, and in May 2009, 

ST-Ericsson announced a strategic partnership with China Mobile to support the development of mobile devices 

for the TD-SCDMA standard. See, e.g., Clarke, Peter, “ST-Ericsson’s Acquisition of TD-SCDMA Pioneer, 

Pays Off,” EE Times, May 26, 2009 (“China Mobile is set to work with T3G Technology Co. Ltd. (Beijing, 

China) which was acquired by ST-Ericsson in November 2008.”) See also “ST-Ericsson Reports Second 

Quarter 2009 Financial Results,” Ericsson Press Release, July 23, 2009 (“In May, ST-Ericsson announced a 

strategic partnership with China Mobile to drive development of both high-end and low-cost handsets, based on 

3G standard TD-SCDMA.”). 

1076 ST-Ericsson sold nearly 7 million chips for which TD-SCDMA was the highest standard in 2009, which was 

36.9 percent of the total number of chips for which TD-SCDMA was the highest standard sold that year. See 

Strategy Analytics, “Baseband Market Share Tracker Q1 2018: Samsung LSI Overtakes MediaTek,” June 2018. 

1077 Sales of chips for which TD-SCDMA was the highest standard across all firms rose from 18 million in 2009 to 

95 million in 2012. During the same period, as ST-Ericsson’s share of sales of chips for which TD-SCDMA 

was the highest standard fell from 37 percent to 3 percent, Spreadtrum’s share grew from five percent to 51 

percent and Marvell’s share grew from no shipments to 17 percent. See Strategy Analytics, “Baseband Market 

Share Tracker Q1 2018: Samsung LSI Overtakes MediaTek,” June 2018. 

1078 See, e.g., “Cellular Handset & Tablet Chip Markets,” Forward Concepts, 2012, p. 111 (“We believe 

[Spreadtrum won a contract with Samsung] because of their integrated TD-LTE and TD-SCDMA baseband, 

which places them ahead of competition in 2012.”) and p. 118 (“Spreadtrum holds the strongest position, 

entering 2012 with its single-chip TD-SCDMA/HSDPA/GSM/GPRS baseband designed in a 40nm CMOS 

process.”). See also “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 94 

(“[Spreadtrum] supported TD-HSPA with a dual mode TD-SCDMA RF transceiver, which placed them ahead 

of competition for feature phones and thin modems.”), p. 97 (“Marvell’s PXA918 was the first single-chip 

[modem with integrated AP] solution to feature China’s TD-SCDMA standard support to enable mobile 

developers to design Android 2.3 Smartphones.”), and p. 104 (“Marvel [sic] dominated the Smartphone 

segment with the early introduction of the PXA918, PXA920 and PXA920HT single core TD[-]SCDMA line 

up.”). 

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388. ST-Ericsson also consistently struggled to meet product development schedules and lost out 

on design wins at several major OEMs as a result. 

 

 

 

 

 

1079 Zander Deposition, pp. 68–69 

. 

1080 

1081 Zander Deposition, Ericsson, pp. 194–196

”).

1082

Deposition, Ericsson, p. 58 

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7. Texas Instruments 

a. Background 

389. Texas Instruments (TI) is a global semiconductor design and manufacturing company with a 

wide range of products. The company started producing semiconductors after it invented the 

silicon transistor in 1954 and the integrated circuit in 1958.1085 TI entered the modem chip 

industry in the early 1990s and primarily developed 2G and 3G chips.1086 While TI provided 

both hardware and software components for 2G modem chips, for 3G chips it focused primarily 

 

Zander Deposition, Ericsson, pp. 196–197

1083 

1084 ERIC-QCOM-00040883, p. 2, presentation titled “ST-Ericsson Board Members Meeting,” Ericsson, October 

2011- (

1085 “History of Innovation,” Texas Instruments. 

1086 In 1990, TI obtained its first 2G design win with Ericsson. In 1993, TI obtained cellular 2G design win with 

Nokia, though it acted as a foundry for Nokia’s modem chip designs. Kundojjala, Sravan and Stuart Robinson, 

“Baseband Processor Profile: Texas Instruments’ Baseband Exit,” Strategy Analytics, June 2009, p. 10 

(“Exhibit 2: Texas Instruments’ Key Cellular Baseband Activities”) and p. 17 (“TI’s GSM/GPRS customers 

currently include Nokia, Motorola, Sony Ericsson, [...]. TI’s 3G baseband customers include Nokia and 

Motorola, although TI doesn’t have a baseband design of its own and it only manufactures chips for Nokia’s inhouse baseband designs. Until recently, TI also had a similar foundry relation with EMP [...]. TI started a 

custom 3G programme with Motorola in mid-2008 [...].”). 

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on providing the hardware, relying on its customers to develop the extensive software needed 

for the modem chips to function.1087

390. In the 2G segment, TI improved its products by acquiring Condat AG in 2002.1088 In 2003, by 

partnering with Nokia and STMicroelectronics, TI developed a CDMA2000 product.1089 By 

2007, TI had released several low-cost GSM chips that were popular in China and a number 

of other countries.1090 

391. In the 3G segment, TI’s early WCDMA offerings were popular among OEMs that were willing 

to internally develop modem chip software.1091 While TI’s competitors offered both the 

hardware and embedded software required for modem chips to run, OEMs purchased TI’s 

fabricated WCDMA hardware and provided the software themselves. In 2005, TI attempted 

to provide both software and hardware for 3G products by partnering with NTT DoCoMo, but 

 

1087 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, pp. 5–6 (“TI doesn’t have a W-CDMA baseband design of its own unlike 

GSM/GPRS/EDGE basebands. The company only plays a foundry role to manufacture W-CDMA baseband 

ASICs for Nokia, Motorola and EMP’s in-house designs.”). 

1088 “Texas Instruments to Acquire Condat, Strengthening Its Chipset Solutions in Wireless Technology,” Texas 

Instruments Press Release, March 1, 2002 (“Texas Instruments [...] and Condat AG [...] announced today an 

agreement by which TI would acquire Condat. This acquisition enables TI to provide a complete GSM/GPRS 

chipset solution to its customers.”). 

1089 Mannion, Patrick, “TI and STMicro Offer Modular CDMA 1x Chip Set,” EE Times, December 5, 2003 (“Texas 

Instruments and STMicroelectronics have jointly announced an open, modular cdma2000 1x chip set [...]. The 

four-chip set is the first product realization to derive from the collaboration between the two companies ‘ and 

Nokia ’ [...].”). 

1090 “Cell Phones Set to Ring Up More Success,” Shanghai Daily, November 23, 2007 (“‘Our market share in China 

is several percentage points higher than the global level as demand surges for low-cost single-chip products 

LoCosto and eCosto,’ said Xie Bing, Texas Instruments’ China president.”). 

1091 “Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 155 (“Texas Instruments continues as the 

global leader in ‘stackless’ WCDMA baseband chip sales as it supplies Nokia Corp.–– and (decreasingly to) 

EMP/ST-Ericsson [...]. [...] TI supplies the silicon, and EMP the 3G-protocol stack and software based 

voice/audio codecs-.”). 

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this effort ultimately failed. 1092 TI soon returned to focusing on hardware for its 3G 

offerings.1093

392. TI was the largest modem chip supplier throughout the early and mid-2000s, peaking in 2007 

with roughly 577 million modem chips shipped.1094 However, in 2008, TI’s modem chip sales 

started dropping.1095 In the 2G segment, TI faced competition from competitors such as 

MediaTek and Spreadtrum that catered to low-end devices,1096 and in the 3G segment, OEMs 

switched to purchasing solutions that came with both hardware and software components.1097 

In 2008, TI announced that it would phase out its modem chip business to focus instead on 

APs,1098 and in 2012, TI exited the modem chip business altogether.1099

 

1092 See, e.g., “Texas Instruments Offers New Mobile Chip,” NBC News, November 29, 2005 (“TI developed the 

chip with Japan’s top mobile carrier, NTT DoCoMo Inc [...]. [...] TI’s new product, known as the 

OMAPV2230, represents a move beyond the custom W-CDMA chips TI makes [...].”). See also “Examine the 

Global Mobile Phone Platform (Baseband) Industry Report, 2007-2008,” MarketWired, May 19, 2008 (“TI has 

launched only one 3G baseband product, OMAPV2230, which is not that popular in the market.”); Strauss, 

Will, “DSP Market Bulletin – 10/29/07,” Forward Concepts, October 29, 2007 (“Earlier this year, TI quietly 

ceased development of its [WCDMA] baseband chip (OMAPV2230) that was first announced in November, 

2005. The OMAPV2230 sampled, but did not go into production [...].”). 

1093 Strauss, Will, “DSP Market Bulletin – 10/29/07,” Forward Concepts, October 29, 2007 (“The cancellation 

coincided with the idea that in the near term TI could make more money continuing to ship UMTS baseband 

silicon designed by its customer. (read: Nokia).”). 

1094 See Exhibit III.D.3. See also Exhibit V.C.7, which indicates that, according to Strategy Analytics, TI sold about 

577 million modem chips in 2007. 

1095 TI’s modem chip sales dropped to roughly 470 million chips in 2008 and continued to decline thereafter. See 

Exhibit V.C.7. 

1096 See, e.g., Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband 

Exit,” Strategy Analytics, June 2009, pp. 6–7 (“TI has had some success with its own baseband designs in the 

low-end GSM/GPRS market [...]. However, TI faced increased competition from Infineon, MediaTek and 

Spreadtrum in this segment.”). 

1097 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 18 (“The cellular baseband market is shifting from custom ASICs to ASSP 

solutions as handset manufacturers like Nokia, Motorola and Sony Ericsson are turning to off-the-shelf 

solutions to focus more on user experience and software. This has left TI vulnerable as the company currently 

doesn’t have a 3G baseband design of its own [...].”). 

1098 Barak, Sylvie, “TI Calls Baseband a Distraction, but Is It?” EE Times, November 10, 2011 (“‘TI made a 

strategic decision in 2008 to phase out of the baseband segment and focus on two key wireless growth areas: 

OMAP [Open Multimedia Applications Platform] processors and wireless connectivity solutions,’ said the 

firm’s Director of Strategic Marketing, Avner Goren [...].”). 

1099 McDougall, Paul, “TI Cuts 1,700 Jobs, Exits Mobile Chip Market,” InformationWeek, November 15, 2012 

(“Texas Instruments said it will lay off about 1,700 workers, or about 5% of its total workforce, as part of a 

restructuring that will see it exit the market for mobile chips that power smartphones and tablets [...].”). 

Strategy Analytics records roughly 3.2 million modem chip sales for TI in 2013, but these appear to be legacy 

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b. Analysis 

393. TI’s foresight, investment, and execution in the 1990s and early 2000s worked well. The 

company focused on low-cost GSM products, invested in both R&D and an acquisition, and 

was able to sell a large number of 2G and hardware-oriented 3G modem chips. From at least 

as early as 2002 through 2009, TI was the top supplier of modem chips each year in terms of 

unit sales.1100 However, the company was unable to maintain this success. TI relied on its 

largest customers for modem chip software, focused its investment on hardware instead of 

software at a time when OEMs wanted both, invested in 3G and 4G standards that did not gain 

popularity, and encountered price and component integration difficulties. 

394. Foresight: TI’s focus on low-cost GSM products led to a large number of sales in the 1990s 

and 2000s, including high demand in China for TI’s LoCosto and eCosto low-cost 2G chips.1101 

The LoCosto chips supported both voice-centric GSM phones and higher-end 2G devices, 

allowing mobile device OEMs to use the chips in emerging markets that used the GSM 

standard, such as China, India, Brazil, and Africa, as well as in feature phones in regions such 

as Europe, Asia, and the U.S.1102 However, TI did not adequately respond to the emergence 

of low-cost competitors such as MediaTek, Spreadtrum, and Infineon, causing its sales of 

LoCosto chips to stagnate in 2008.1103

 sales after TI’s 2012 announcement. See Texas Instruments Form 10-Q, Q1 2013, p. 6 (“Effective January 1, 

2013, the Wireless segment was eliminated. [...] Financial results for baseband products and Wireless products 

for the smartphone and consumer tablet markets, both of which are product lines that we have announced we 

are exiting, are included in Other and are collectively referred to as ‘legacy wireless products.’”). See also 

Exhibit V.C.7 and associated backup. 

1100 See Exhibit III.D.3. 

1101 “Cell Phones Set to Ring Up More Success,” Shanghai Daily, November 23, 2007 (“‘Our market share in China 

is several percentage points higher than the global level as demand surges for low-cost single-chip products 

LoCosto and eCosto,’ said Xie Bing, Texas Instruments’ China president.”). 

1102 “Semiconductor Insights: Texas Instruments ‘LoCosto RF’ and Baseband Single Chip Solution Recognized as 

Most Innovative Baseband and/or Applications Processor,” MarketWired, November 9, 2006 (“A further 

competitive differentiator for TI’s LoCosto family of scalable single-chip solutions is that it ranges in capability 

from supporting GSM voice-centric phones, to GPRS devices that support a robust set of features for the higher 

end of emerging markets. [...] This allows customers flexibility to address growing GSM-based regions like 

China, India, Brazil and Africa, and feature phone markets such as Europe, Asia and U.S.”). 

1103 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, pp. 6–7 (“TI has had some success with its own baseband designs in the low-end 

GSM/GPRS market [...]. However, TI faced increased competition from Infineon, MediaTek and Spreadtrum 

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395. TI’s strategic decisions outside of 2G revolved around the use of partnerships in product 

development. Its focus on hardware components, while its OEM customers developed the 

required 3G software, led to mixed results and left TI vulnerable to the actions of its partners. 

Although initially successful, TI’s lack of software experience backfired when device OEMs 

began switching to suppliers that designed modem chips with both hardware and software.1104 

This gap prevented TI from finding new customers. 

.”1105

396. Meanwhile, other partnerships failed to generate substantial sales, as TI engaged in two 

partnerships involving technology standards that were never widely adopted. First, TI formed 

a partnership with Nokia and STMicroelectronics to develop modem chips for the CDMA2000 

1X standard and later the CDMA2000 1xEV-DV standard. 1106 However, many wireless 

carriers ended up deploying CDMA2000 1xEV-DO instead of EV-DV, 1107 and the joint 

 in this segment. We estimate that the company shipped approximately 32 million LoCosto units in 2007, but not 

much more than this in 2008.”). 

1104 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 18 (“The cellular baseband market is shifting from custom ASICs to ASSP 

solutions as handset manufacturers like Nokia, Motorola and Sony Ericsson are turning to off-the-shelf 

solutions to focus more on user experience and software. This has left TI vulnerable as the company currently 

doesn’t have a 3G baseband design of its own [...].”). 

1105 

1106 See, e.g., Mannion, Patrick, “TI and STMicro Offer Modular CDMA 1x Chip Set,” EE Times, December 5, 

2003 (“Texas Instruments and STMicroelectronics have jointly announced an open, modular cdma2000 1x chip 

set [...]. The four-chip set is the first product realization to derive from the collaboration between the two 

companies ‘ and Nokia ’ [...].”). See also Krazit, Tom, “TI and STM Produce Samples of 3G CDMA Chips,” 

IT World Canada, June 24, 2004 (“Texas Instruments Inc. (TI) and STMicroelectronics NV (STM) are 

producing samples of chips [...]. The new chips are based on the Evolution-Data-Voice (EV-DV) standard that 

accelerates the bandwidth of CDMA cellular networks [...].”). 

1107 “What is 1xEV-DV Standard?,” GeekInterview, March 2, 2008, available at 

http://www.learn.geekinterview.com/it/wireless/what-is-1xev-dv-standard.html (“At the time of its commercial 

release, 1xEV-DV compatible equipment was not made available in time to meet market demands. [...] In 

addition to this, a number of telecommunications networks such as Verizon Wireless and Sprint Nextel, among 

others, chose to deploy 1xEV-DO.”). See also Section III.E.2. 

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venture eventually dissolved.1108 Second, TI made a deal with Motorola to provide foundry 

and design expertise for Motorola’s WiMAX efforts.1109 However, WiMAX never became a 

widely used 4G standard.1110

397. Additionally, TI’s WCDMA chip design, in collaboration with NTT DoCoMo, never went into 

final production, as TI had miscalculated its expectations of modem chip demand in Japan.1111 

After this setback, TI’s continuing focus on fabricating the hardware components of its custom 

chips for Nokia only exacerbated TI’s inability to provide a full 3G chip solution. In 2008, 

roughly 65 percent of TI’s wireless revenue came from its fabricated products with Nokia and 

EMP.1112 TI’s sales rapidly declined in the late 2000s when both Nokia and EMP switched to 

other suppliers.1113

398. Investment: TI’s acquisition of Condat in 2002 allowed TI to develop complete 2G solutions; 

Condat’s wireless R&D facilities also gave TI a total of eight wireless R&D facilities 

throughout the world.1114 TI’s approach to R&D was focused on hardware as opposed to 

 

1108 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 10 (“TI involved in a CDMA2000 1X chip development joint venture with 

Nokia and ST Microelectronics [...]. However, later TI, Nokia and ST Micro abandoned the JV.”). 

1109 “OMAP Gets Break in Moto Design Win,” EE Times Asia, March 16, 2007 (“TI will develop custom WiMAX 

chipsets, including both baseband DSP and analog/RF components, for Motorola applications [...]. TI will also 

provide process, foundry and design expertise for the WiMAX effort.”). 

1110 See Section III.C.2. 

1111 Strauss, Will, “DSP Market Bulletin – 10/29/07,” Forward Concepts, October 29, 2007 (“The OMAPV2230 

sampled, but did not go into production. TI has stated that the chipset market in Japan, where it originally 

invested, did not develop as they expected. The cancellation led to approximately 300 layoffs, worldwide.. [sic] 

[.] The cancellation coincided with the idea that in the near term TI could make more money continuing to ship 

UMTS baseband silicon designed by its customer. (read: Nokia).”). 

1112 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, pp. 6 and 12. 

1113 See, e.g., Sideco, Francis, “Qualcomm and ST-Ericsson Shine, Even as Wireless Chip Market Tanks,” IHS 

Markit, April 30, 2009 (“Texas Instruments Inc. (TI), suffered the worst performance among the Top-5 

suppliers in 2008, with revenue plunging by 22.5 percent for the year. The company continued to share [sic] as 

its major customer, Nokia, took steps to diversify its supply base and engage more with other wireless chip 

makers.”). See also Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ 

Baseband Exit,” Strategy Analytics, June 2009, p. 5 (“The recent diversification of the supplier base at Nokia 

was a big blow to TI’s baseband ambitions and this, along with the loss of EMP (Ericsson Mobile Platforms) to 

ST-Ericsson, caused the company to rethink its baseband market strategy.”). 

1114 “Texas Instruments to Acquire Condat, Strengthening Its Chipset Solutions in Wireless Technology,” Texas 

Instruments Press Release, March 1, 2002 (“This acquisition enables TI to provide a complete GSM/GPRS 

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software and relied heavily on partnerships with other technology firms. However, TI underinvested in its 3G modem technology.1115 Although TI invested comparable amounts overall, 

it invested less than competitors in developing complete modem chip solutions.1116 When TI 

exited the modem chip industry in 2012, it considered the industry to have become “too 

resource and investment intensive.”1117

399. Execution: TI’s execution in GSM modem chips since the late 1990s led to popular products 

for many years. For example, in 2004, TI developed the modem chip industry’s first integrated 

GSM single-chip solution, which combined the modem chip with a number of other nonprocessor device components, and sold it to Nokia.1118 TI’s integration of multiple features for 

its low-cost LoCosto and eCosto chips likewise made them viable for emerging GSM regions 

such as China and India as well as for Europe and the U.S.1119

 chipset solution to its customers. [...] The company will now have eight wireless R&D centers serving the 

major regions of the world.”). 

1115 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 18 (“TI under-invested in 3G basebands and as a result lost its EMP account 

and is losing share at its largest customer Nokia also.”). 

1116 See, e.g., Exhibits III.E.1–3. See also Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: 

Texas Instruments’ Baseband Exit,” Strategy Analytics, June 2009, p. 5 (“[...] [T]he company [TI] hasn’t 

invested in ASSP baseband solutions as much as its competitors.”). 

1117 Lomas, Natasha, “Texas Instruments Cuts 1,700 Jobs as It’s Driven Away from Mobile Chip Market by the 

Rise of Custom Chipmaking,” Techcrunch, November 15, 2012. 

1118 “Texas Instruments Delivers Industry’s First Integrated Single-Chip Solution for Mobile Phones to Nokia,” EE 

Times, January 24, 2005 (“Texas Instruments Incorporated and Nokia have announced a collaboration whereby 

Nokia will incorporate a single-chip mobile phone solution [...]. [...] The announcement fulfills a 

commitment TI made in 2002 when the company announced its intention to integrate the bulk of handset 

electronics on a single chip, including digital baseband, SRAM, logic, RF, power management and analog 

functions, and to sample the first product in 2004. The first version of the single-chip solution [...] sampled in 

December 2004 [...]. [...‘] With the industry’s first integrated single-chip solution, TI and Nokia are bringing 

more affordable, advanced mobile phones to consumers worldwide.’”). 

1119 See, e.g., “Semiconductor Insights: Texas Instruments ‘LoCosto RF’ and Baseband Single Chip Solution 

Recognized as Most Innovative Baseband and/or Applications Processor,” MarketWired, November 9, 2006 

(“TI’s LoCosto platform is designed to reduce the bill of materials count by integrating both the RF and 

baseband functionality into a single chip. [...] This allows customers flexibility to address growing GSMbased regions like China, India, Brazil and Africa, and feature phone markets such as Europe, Asia and U.S.”). 

See also “Texas Instruments Single-Chip Cell Phone Technology Will Make Multimedia Phones Affordable for 

Mass Market,” Texas Instruments Press Release, November 17, 2006 (“The ‘eCosto’ platform represents the 

latest advancement [...]. Integrating the RF transceiver and analog codec with the digital baseband significantly 

reduces board space, extends battery life, and makes for a more powerful and versatile handset.”). 

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400. However, TI struggled to obtain year-over-year improvements in its 3G technology that would 

lead to mass adoption. In addition to its struggle to design 3G protocol stacks,1120 TI fell behind 

in developing competitive 3G chips due to difficulties in integrating multimedia capabilities 

and its underestimation of the time needed to produce and sell transceivers.1121 According to 

one analyst, “TI had more than 1,000 engineers working on cellular RF and basebands, but 

failed to keep up with competitors. According to competitors TI has never done a good job in 

software and system integration, leaving those tasks to its customers.”1122

8. Broadcom 

a. Background 

401. Broadcom was founded in 1991 to develop chips for communications technologies.1123 One 

of the primary components of Broadcom’s business strategy involved the acquisition of other 

firms and technologies.1124 In 2002, Broadcom entered the modem chip industry when it 

acquired Mobilink and its GSM technology.1125 In 2004 it acquired Zyray Wireless and its 

 

1120 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 133 (TI’s giant challenge is not the 

digital basebands, but a 3G software stack that work and a WCDMA and EDGE RF transceiver development.”). 

1121 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 17 (“TI underestimated the investment and time-to-market requirements of 

developing transceivers, then compounded this mistake with 3G basebands. We believe that TI also 

underestimated the difficulty of integrating multimedia capabilities into its SoCs.”). 

1122 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 17. 

1123 “Broadcom Corporation History,” FundingUniverse (“Broadcom was founded as a private company in 1991 

[...]. The company’s basic strategy was to focus on emerging markets in communications that used cable or 

wire. Using its design cell library and silicon compiler technology, it was able to quickly develop chip 

products, or integrated circuits (ICs), for applications such as Fast Ethernet or advanced cable TV systems.”). 

1124 See, e.g., Mishra, Rajat, and Nick Santhanam, “At the Core of Communications: An Interview with Broadcom’s 

Scott McGregor,” McKinsey & Company, 2012, p. 77 (“Scott McGregor: We decided to build M&A as a core 

competency at Broadcom. It is not about how big the M&A team is; it is more about owner-ship and 

accountability in the M&A function. At Broadcom, I would say about two-thirds of the acquisitions we’ve done 

have created value.”). See also Broadcom, 10-K, 2010 (“A key element of our business strategy involves the 

acquisition of businesses, products or technologies that allow us to reduce the time required to develop new 

technologies and products and bring them to market, complement our existing product offerings, expand our 

market coverage, increase our engineering workforce or enhance our technological capabilities.”). 

1125 See, e.g., Gain, Bruce, “Broadcom to Acquire Mobilink in $251 Million Deal,” EE Times, April 8, 2002 

(“Broadcom Corp. today agreed to purchase Mobilink Telecom Inc. [...] in a move to enter the handset 

baseband market. Mobilink [...] currently offers volume production of baseband chipsets for [GSM] 

chipsets.”). 

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WCDMA technology.1126 From 2003 through 2009, Broadcom released multiple 2G and 3G 

chips and secured design wins with large customers such as Nokia and Samsung. 1127

402. In 2010, after a few years of internal investment in LTE, Broadcom acquired Beceem for its 

4G WiMAX and LTE technology.1128 Broadcom announced its first LTE chip, the BCM21892, 

in February 2013, nearly five months after the release of Apple’s first LTE iPhone, the iPhone 

5. 1129 Though Broadcom’s initial LTE effort had not yet resulted in product shipments, 

Broadcom acquired Renesas Mobile in September 2013 in an attempt to “accelerate” its LTE 

 

1126 See, e.g., “Broadcom Acquires Zyray Wireless for $96M,” EDN Network, June 17, 2004 (“Broadcom Corp. 

took aim at 3G today, announced that it has signed a definitive agreement to acquire Zyray Wireless Inc., a 

leading provider of baseband co-processors addressing WCDMA mobile devices.”). 

1127 See, e.g., “Broadcom Pushes into Handset Market with China’s Bird,” EE Times, March 18, 2003 (“[...] 

Broadcom also announced that Ningbo Bird has taken its V09 GSM handset into production based on a 

Broadcom reference design and that a range of multimedia-capable GSM/GPRS clamshell handsets are in 

development based on a Broadcom reference design. All of these handsets are based on the ML2011 GSM 

baseband processor and BCM2121 GPRS baseband processor developed by Broadcom’s mobile 

communications business unit formerly known as Mobilink Telecom [...].”). See also Mannion, Patrick, 

“Broadcom Rolls Combo Platform,” EE Times, February 17, 2005 (“Broadcom Corp.’s summer 2004 

acquisition of Zyray Wireless has borne fruit in the form of a complete UMTS W-CDMA modem chip. [...] 

The BCM2140 W-CDMA modem is the first production-ready instantiation of a test chip Zyray had developed 

when it was a standalone company [...].”); “Nokia Selects Broadcom as a Chipset Supplier for Future EDGE 

Phones,” Broadcom Press Release, August 8, 2007 (“Broadcom [...] announced that Nokia Corporation has 

selected Broadcom’s advanced single-chip cellular baseband processor and its companion power management 

unit (PMU) for selected future EDGE mobile phones. [...] Broadcom first announced the BCM21331 

(‘Venus’) single-chip EDGE multimedia processor at 3GSM in February 2007.”); Bangeman, Eric, “Broadcom 

Touts New ‘3G Phone on a Chip,’ Could Show Up in 3G iPhone,” Ars Technica, October 15, 2007 

(“Semiconductor firm Broadcom has become the first chipmaker to announce a single-chip 3G phone solution. 

[...] The BCM21551 combines a 3G baseband transceiver, Bluetooth 2.1, and a multiband RF transceiver on a 

single chip.”); Goldstein, Phil, “Samsung to Run Future EDGE Phones on Broadcom Chips,” FierceWireless, 

February 10, 2009 (“Broadcom announced that Samsung would be incorporating its single-chip cellular 

platform for future EDGE-based phones [...].”). 

1128 See, e.g., Merritt, Rick, “Analysis: Inside Broadcom’s Bid for Beceem, LTE,” EE Times, October 13, 2010 

(“‘We have had internal development work on LTE in Broadcom for a few years,’ [General Manager of 

Broadcom’s Mobile Platforms Group Scott] Bibaud said. ‘What we get with Beceem is technology that has 

seen a lot more of the market and a fuller team to accelerate our time to market,’ he said.”). See also Gardner, 

William, “Broadcom to Acquire Beceem for $316 Million,” Network Computing, October 13, 2010 (“[...] 

Broadcom moved to stake out a position in 4G by acquiring Beceem Communications, a leader in long-term 

evolution (LTE) and WiMax wireless technology. [...T]he acquisition would give Broadcom access to 

Beceem’s pioneering 4G multimode LTE-WiMax network expertise [...].”). 

1129 See, e.g., Exhibit QX1012, Rango Deposition, Broadcom, BRCM165581–5583 at 5581, document titled 

“Broadcom Introduces Industry’s Smallest 4G LTE-Advanced Modem for Smartphone and Tablet Market,” 

Broadcom, February 12, 2013 (“Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in 

semiconductor solutions for wired and wireless communications, today introduced the industry's smallest 4G 

LTE-Advanced modem.”). See also “Apple Introduces iPhone 5,” Apple Press Release, September 12, 2012 

(“Apple today announced iPhone 5 [...]. [...] iPhone 5 supports ultrafast wireless standards including LTE and 

DC-HSDPA [...].”) 

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development.1130 Broadcom “canceled all” projects related to the BCM21892, “fired half of 

the team [...] and put new people in charge of the modem program.” 1131 In late 2013, 

Broadcom announced its first integrated LTE chip, the M320 (also known as EOS2), that 

would ship in 2014,1132 and Broadcom proceeded to secure low-volume design wins with 

Samsung and other mobile device OEMs.1133

403. Broadcom increased its annual modem chip sales each year from 2008 to 2011.1134 However, 

by 2011, 2G chips had become a small part of Broadcom’s business, leaving the company’s 

 

1130 See, e.g., Exhibit QX1018, McGregor Deposition, Broadcom, BROADCOM-USFTC00000100, pp. 4–5, 

presentation titled “Project Ravello Deal Presentation,” September 3, 2013 (“Rationale[:] Accelerate our LTE 

program and take clear #2 position in industry[.] [...] Converged Roadmap Integrates Best Technology[.]”). 

See also Yoshida, Junko, “Broadcom Buys Renesas’ LTE Assets – IP, SoC & Engineers,” EE Times, 

September 4, 2013 (“With the new acquisition deal, Broadcom, which has shipped no LTE products to date, 

will suddenly own a dual-core LTE SoC, developed by Renesas Mobile, ready for volume production and 

certified by leading global operators in North America, Japan, and Europe. [...] Strauss noted, ‘Actually, longsuffering Broadcom’s LTE program was a long way from a fielded product. Now, they say they’ll be shipping 

LTE in 1H/14. After all, the Renesas part has been qualified at Verizon, AT&T and NTT DoCoMo.’”). 

1131 See, e.g., McGregor Deposition, Broadcom, pp. 118–119 (“Q. Well, let’s see. Looking at the second email from 

the top of the page it’s from you to Mr. Khamisy. It says, ‘Thanks, Asad. I figured it didn’t make sense to 

review last year’s mobile goals since we’ve canceled all those projects, fired half of the team, acquired the 

Renesas modem team, and put new people in charge of the modem program.’ [...] Q. Well, in substance is this 

pretty much what happened when you acquired Renesas? A. Half the team would refer to a subset of the group, 

okay. Acquire the Renesas modem team, yes, I think that’s at face value, put new people in charge of the 

modem program. Yes, that’s correct. Q. And cancel the preexisting projects, meaning what? A. They were 

based on the -- we had a roadmap that would go forward five years. Okay. And all the future products on that 

roadmap that were based on the prior modem would have been canceled. Yeah. That’s what it means to replace 

the modem.”). See also Exhibit QX1020, McGregor Deposition, Broadcom, BRCM172776-2777 at 2776; 

Rango Deposition, Broadcom, p. 145 (“Q. Was the BCM21892 ever sold in commercial quantities? A. I don't 

believe so.”). 

1132 See, e.g., Rango Deposition, Broadcom, p. 167 (“Q. Did Broadcom have an in-production LTE chipset in 

February 2013? A. I think, just to keep the record straight, the first LTE solution that Broadcom had came after 

the Renesas acquisition, which I believe was in 2013, and it was the EOS2 chip.”). See also “Analyst Day 

2013,” Broadcom, p. 55 (Slide titled “Portfolio of 3G and 4G SOC Platforms”); Ray, Tiernan, “Broadcom 

Rises: Street Cheers Turn in LTE Outlook,” Barrons, December 10, 2013 (“[Broadcom] also announced that its 

M320 dual-core LTE SoC would ship into a Samsung phone in early 2014.”). 

1133 See e.g., Goldstein, Phil, “Intel, MediaTek, Broadcom and Nvidia Try to Catch Up to Qualcomm in LTE,” 

FierceWireless, January 10, 2014 (“Broadcom has made significant strides on LTE, especially after it acquired 

LTE-related assets from affiliates of Renesas in September. Broadcom’s M320 dual-core LTE System-on-aChip will be shipping in at least one Samsung phone in the first quarter, though the companies aren’t releasing 

details.”). See also Exhibit QX1015, Rango Deposition, Broadcom, BCRM000173–0205 at 0186, presentation 

titled “Mobile and Wireless,” Broadcom, November 12, 2013 (Slide titled “EOS2 Pricing and Gross Margin 

Environment”); Exhibit V.C.8. 

1134 See Exhibit V.C.8. 

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3G products as its main revenue drivers.1135 After 2011, Broadcom struggled to maintain large 

volume shipments of 2G and 3G chips as Nokia and Samsung decreased their modem chip 

orders.1136 Broadcom failed to secure substantial design wins for its 4G products, selling fewer 

than 1 million LTE modem chips in 2014.1137 Broadcom’s LTE modem chip products were 

criticized as being “neither leading edge nor first to market,”1138

.

1139 Broadcom 

found that “by the time [it] had a viable product line,” the prices it was able to obtain for its 

chips were lower than it had anticipated and it was facing price pressure from the “many 

 

1135 See, e.g., Rango Deposition, Broadcom, p. 202 (“Q. When you say chip ASPs had fallen faster than you 

forecast, you’re including 2G chips; right? [A.] Not so much. By that time, by the time that -- 2011 to 2014, 

2G chips really became a very small part of Broadcom’s business. It was mostly 3G and even 4G.”). 

1136 Broadcom sold roughly 58 million 2G and 3G handset modem chips to Nokia in 2011, but fewer than 1 million 

in 2013. Broadcom’s 2G and 3G modem chip sales to Samsung decreased yearly from 2012 to 2014, having 

sold roughly 77 million, 68 million, and 55 million units respectively. See Strategy Analytics, “Customised 

Baseband Quarterly Market Share Tracker for Qualcomm: Parts 1 and 2,” April 6, 2018. 

1137 See Exhibit V.C.8 and associated backup. 

1138 Kundojjala, Sravan, “Intense 3G Price Competition and 4G LTE R&D Took Toll on Broadcom Baseband 

Business,” Strategy Analytics, June 2, 2014. 

1139 

See also Kang Deposition, Samsung, p. 37 

 Exhibit QX1021, McGregor 

Deposition, Broadcom, BRCM174046–4047 at 4046 (email from Michael Hurlston, Broadcom, May 2, 2014, 

noting that Broadcom’s first LTE SoC, “Aruba,” “is 1-2 quarters behind the competition,” and response from 

Scott McGregor, Broadcom, May 3, 2014, remarking “FYI. Sigh. No Brownie points for trying hard in this 

industry if your competition does even better.”); Exhibit QX1005, Rango Deposition, Broadcom, 

BRCM173161–3162, email from Patrick Henderson, Broadcom, May 7, 2014 (“The Apple team did not think 

that BRCM has the level of technical maturity required for a 2016 product.” [...] “Their perception is that we 

have no great advantage in performance or features and they have some concerns in the areas of: envelope 

tracking and carrier aggregation[.]”). 

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competitors in the marketplace.”1140,1141 Broadcom ultimately exited the modem chip industry 

in 2014.1142

b. Analysis

404. Broadcom’s fast-follower strategy involved meeting demand largely by acquiring other firms’ 

technologies.1143 Broadcom had sufficient foresight, investment, and execution for earlier 

products, with the company obtaining key wins with its GSM and WCDMA products and 

executing well through 2009. However, Broadcom demonstrated incorrect foresight, made 

poor investment decisions, and struggled with execution related to LTE chip development, 

causing the company’s modem chips to lag behind those offered by competitors. Eventually, 

Broadcom exited the industry. 

405. Foresight: Broadcom’s M&A approach succeeded and failed in part depending on the 

accuracy of the company’s alignment with the development of modem chip standards. Partly 

 

1140 See, e.g., Rango Deposition, Broadcom, pp. 250–251 (“[Exhibit QX1015] was showing the gross margin for the 

EOS2 at the four customers that we had – Samsung, ZTE, Sony, and HTC – and the aggregate gross margin 

forecast for 2014. Q. And were these gross margins for these four customers acceptable? A. When you say 

“acceptable,” do you mean – can you – were we happy with them? Q. Were you happy with them when you 

were running the business? A. No. Because our goal was at least, as I mentioned, 50 percent gross margin as a 

general target. So these gross margins were not attractive. But I’m sure that in the presentation we talked about 

how we would try to improve them.”). See also Exhibit QX1015, Rango Deposition, Broadcom, at 

BRCM000186. 

1141 See, e.g., Rango Deposition, Broadcom, pp. 28–29 (“Q. A while back in this -- in your testimony, you -- I was 

asking you about why the cellular baseband business at Broadcom was not able to reach a sustainable financial 

success. And one thing you mentioned was market conditions. Can you elaborate on what you meant by 

‘market conditions’? A. Yeah. By the time Broadcom had a viable product line, the prices in the cellular 

baseband business decreased at a rate that was faster than our financial projections. And I think that led to some 

of the challenges of trying to make the business profitable, as ASPs declined at a much more rapid rate than we 

had projected. Q. Do you have an understanding as to why the ASPs were declining faster than projected? A. 

Could have been a number of things. There was many competitors in the marketplace. Certainly there’s at least 

three or four different companies vying for each piece of business. I’m sure that contributed to it. Market was 

growing very rapidly as well, which led to a lot of price erosion.”). 

1142 Goldstein, Phil, “Broadcom CEO: We Were Losing $2M Per Day in Cellular Baseband Biz,” FierceWireless, 

January 15, 2015 (“Broadcom got out of the cellular baseband business in mid-2014 because it was losing $2 

million per day staying in that market, which is dominated by Qualcomm [...], Intel, MediaTek and others, 

according to CEO Scott McGregor.”). 

1143 Naeher, Ulrich et al., “The Evolution of Business Models in a Disrupted Value Chain,” McKinsey, 2011, p. 37 

(“Broadcom is a good example of a fast follower.”). 

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due to its earlier acquisitions,1144 Broadcom released its first WCDMA chip before Marvell, 

MediaTek, and other competitors did.1145 Broadcom also initiated LTE research early, but it 

decided to purchase Beceem in part to pursue a WiMAX/LTE multi-mode chip.1146 Ultimately, 

the WiMAX standard did not gain wide adoption, and Broadcom was unable to produce LTE 

chips via its internal research and the Beceem acquisition alone. In fact, Broadcom did not 

release LTE chips until after it purchased Renesas Mobile in 2013;1147 one analyst cited 

Broadcom as “at least two years and maybe three years behind” in developing its LTE 

products.1148

406. Broadcom was slow to shift resources away from less advanced technologies. Despite its early 

success in developing WCDMA chips, in the late 2000s, according to Robert Rango, former 

Executive Vice President and General Manager of the Networking Infrastructure Group at 

Broadcom, the firm chose to invest into 2G EDGE rather than 3G.1149 Broadcom also did not 

foresee necessary technological improvements to keep its products competitive. 

 

1144 See, e.g., Mannion, Patrick, “Broadcom Rolls Combo Platform,” EE Times, February 17, 2005 (“Broadcom 

Corp.’s summer 2004 acquisition of Zyray Wireless has borne fruit in the form of a complete UMTS W-CDMA 

modem chip. [...] The BCM2140 W-CDMA modem is the first production-ready instantiation of a test chip 

Zyray had developed when it was a standalone company [...].”). 

1145 See Exhibit V.B.5. 

1146 See, e.g., Merritt, Rick, “Analysis: Inside Broadcom’s Bid for Beceem, LTE,” EE Times, October 13, 2010 

(“‘We have had internal development work on LTE in Broadcom for a few years,’ [general manager of 

Broadcom‘s mobile platforms group Scott] Bibaud said. ‘What we get with Beceem is technology that has seen 

a lot more of the market and a fuller team to accelerate our time to market,’ he said.”). See also “Broadcom 

Sees WiMAX/LTE Combo Key Differentiator with Beceem Buy,” FierceWireless, October 14, 2010 

(“[Broadcom’s Scott] Bibaud said the company choose [sic] Beceem because of its longevity and leadership in 

the WiMAX space [...]. But WiMAX is a means to an end. Beceem has been touting [...] its multimode 

LTE/WiMAX chipset strategy. [...‘W]e’ll be focused on multi-mode WiMAX/LTE moving forward,’ Bibaud 

said.”). 

1147 See, e.g., Yoshida, Junko, “Broadcom Buys Renesas’ LTE Assets – IP, SoC & Engineers,” EE Times, 

September 4, 2013 (“With the new acquisition deal, Broadcom, which has shipped no LTE products to date, 

will suddenly own a dual-core LTE SoC, developed by Renesas Mobile, ready for volume production and 

certified by leading global operators in North America, Japan, and Europe.”). 

1148 See, e.g., Goldstein, Phil, “Broadcom Could Sell Cellular Baseband Unit, but Buyers Are Not Apparent,” 

FierceWireless, June 2, 2014 (“[...Broadcom] still has ‘a big problem,’ according to Forward Concepts analyst 

Will Strauss. [...] ‘No. 1 is they are at least two years and maybe three years behind in getting to the LTE 

modem market,’ he told FierceWireless.”). See also Exhibit V.C.8. 

1149 Exhibit QX1005, Rango Deposition, Broadcom, BRCM174660–4661 at 4660, email from Robert Rango, 

Broadcom, July 25, 2011 (“As I have said many times, we are generations behind Q[ualcomm] for multiple 

reasons;[:] We invested in edge when we should have invested in 3G (mistake made four years ago. We are 

going to pay for this in 2012, 13).”). 

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407. Broadcom also demonstrated poor foresight by selling the majority of its products to a few 

major customers.1153 This was especially true for Broadcom’s modem chip business; in 2011, 

Broadcom’s two largest customers, Nokia and Samsung, comprised roughly 98 percent of 

Broadcom’s modem chip sales. As a result, between 2011 and 2014, Broadcom’s sales 

declined when Nokia and Samsung decreased their modem chip orders.1154 

 

1150 

 

1152 See, e.g., McGregor Deposition, Broadcom, pp. 40–41 (“Q. Why did [Broadcom’s internally developed] 

technology have a worse forecast than if you did the acquisition? A. Because the customer requirements 

changed and so the technology we originally developed for a particular market set of assumptions changed and 

the customer asked us to do a higher end version of LTE, which we had not originally targeted and so by doing 

an acquisition it put us back on track to be able to deliver that higher end technology. Q. Which customer are 

you referring to? A. Apple. [...] They subsequently told us that they had awarded the low end of the market to 

Qualcomm and they asked us to develop chips for the mid and high end of the market.”). 

1153 See, e.g., Broadcom, 10-K, 2010 (“A small number of customers have historically accounted for a substantial 

portion of our net revenue. Sales to our five largest customers represented 38.9%, 34.6% and 35.8% of our net 

revenue in 2010, 2009 and 2008, respectively.”). 

1154 In 2011, Nokia and Samsung made up roughly 50 percent and 48 percent of Broadcom’s total modem chip 

sales, respectively. Nokia’s modem chip orders decreased by roughly 165 million between 2011 and 2013. 

Broadcom’s modem chips comprised 14 percent of Nokia’s total modem chip purchases in 2011, but comprised 

less than one percent in 2013. Between 2012 and 2014, Broadcom’s modem chip sales to Samsung 

continuously decreased. See Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker for 

Qualcomm: Parts 1 and 2,” April 6, 2018. See also McGregor Deposition, Broadcom, p. 50 (“Q. Was Samsung 

business also important to the success of Broadcom’s cellular baseband business? A. Samsung was by far our 

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1155

408. Investment: According to industry analysts and others, Broadcom’s rationale for investing in 

its modem chip business had been to expand its connectivity business (Bluetooth and Wi-Fi) 

to mid- to low-end smartphones.1156 Broadcom invested primarily by acquiring companies 

with technological assets, in some respects acting more like a private equity firm than an R&D 

powerhouse. Broadcom’s efforts to rapidly turn GSM and WCDMA acquisitions into chip 

sales were initially successful. Broadcom released GSM modem chips one year after acquiring 

Mobilink, and offered WCDMA modem chips one year after acquiring Zyray Wireless. 1157

 largest customer and we in some quarters during this period were the largest supplier of basebands to 

Samsung.”). 

1155 See, e.g., McGregor Deposition, Broadcom, p. 52 (“Q. What about China were you competing there as well? 

A. We were competing in China. We believed that it was difficult to get sufficient market share in China in 

order for that to be really a positive contributor for a number of reasons. The Chinese cell phone manufacturers 

generally preferred to work with Chinese suppliers and the profitability of that market is significantly below the 

Korea and Cupertino opportunities for us. [...] Q. With respect to the China area, who were Broadcom’s 

competitors? A. Competitors in China included Qualcomm, MediaTek, those were the two largest.”). 

1156 Broadcom’s “connectivity business” includes wireless products such as Wi-Fi and Bluetooth. See, e.g., 

“Broadcom’s Expanding Portfolio Will Help It Defend Its Connectivity Market Share,” Forbes, January 11, 

2016 (“Broadcom has been the leader in connectivity solutions for many years, currently accounting for 

approximately 30% of the market. Thanks to Broadcom, wireless technologies such as Bluetooth and Wi-Fi 

have become household names.”). See also Kundojjala, Sravan, “Intense 3G Price Competition and 4G LTE 

R&D Took Toll on Broadcom Baseband Business,” Strategy Analytics, June 2, 2014 (“The rationale for 

Broadcom to invest in basebands had been to expand its connectivity business to mid-to-low range smartphones 

where a complete platform approach is relevant, allowing Broadcom to capture more dollar content while 

expanding in the high-end at the same time.”); McGregor Deposition, Broadcom, pp. 252–253 (“Q. Because of 

the connectivity business did Broadcom have a greater incentive to stay in the cellular baseband business than a 

stand-alone baseband provider would? A. Absolutely. And if you look at our financials, at first glance on the 

baseband business you say, well, why would you want to be in this business? I mean, you are showing that, you 

know, you are only going to make a relatively small amount of profit. And the answer was that we felt that that 

would enable us to offer better products to our customer if we could offer combined offerings.”). 

1157 See, e.g., “Broadcom Pushes into Handset Market with China’s Bird,” EE Times, March 18, 2003 (“[...] 

Broadcom also announced that Ningbo Bird has taken its V09 GSM handset into production based on a 

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However, as discussed above, in the late 2000s Broadcom fell behind in 3G chip development 

because its investment was misguided, putting more resources into older technologies at the 

expense of newer ones.1158 

409. Repeating its own mistakes, Broadcom had neither efficient nor sufficient investment in 4G 

technology. By acquiring Beceem and its 4G technology, Broadcom was able to allocate other 

resources towards its 2G and 3G products.1159 However, Broadcom’s investment in Beceem 

initially focused on the development of a combination LTE/WiMAX chip.1160 A year after the 

acquisition, Broadcom acknowledged that WiMAX’s position in the U.S. was fading and had 

its Beceem team shift focus to develop LTE products.1161 Even so, by 2013, Broadcom had 

not been able to develop a competitive LTE chip and had to purchase Renesas Mobile to ship 

one quickly.1162 According to Robert Rango, former EVP of Broadcom’s Mobile and Wireless 

Group, Broadcom’s slow internal LTE development was due to the company’s investment 

 Broadcom reference design and that a range of multimedia-capable GSM/GPRS clamshell handsets are in 

development based on a Broadcom reference design. All of these handsets are based on the ML2011 GSM 

baseband processor and BCM2121 GPRS baseband processor developed by Broadcom’s mobile 

communications business unit formerly known as Mobilink Telecom [...].”). See also Mannion, Patrick, 

“Broadcom Rolls Combo Platform,” EE Times, February 17, 2005 (“Broadcom Corp.’s summer 2004 

acquisition of Zyray Wireless has borne fruit in the form of a complete UMTS W-CDMA modem chip. [...] 

The BCM2140 W-CDMA modem is the first production-ready instantiation of a test chip Zyray had developed 

when it was a standalone company [...].”). 

1158 BRCM174660-4661 at 4660 (Broadcom, July 25, 2011 email from Robert Rango to Eric Brandt “As I have said 

many times, we are generations behind Q for multiple reasons;[:] ;We invested in edge when we should have 

invested in 3G (mistake made four years ago. We are going to pay for this in 2012, 13).”). 

1159 “Broadcom Sees WiMAX/LTE Combo Key Differentiator with Beceem Buy,” FierceWireless, October 14, 

2010 (“Rather than focusing its R&D on LTE, Broadcom chose to focus on additional opportunities in the 2G 

and 3G chip market, Scott Bibaud, Broadcom‘s executive vice president and general manager for mobile 

platforms, told FierceBroadbandWireless.”). 

1160 See, e.g., Goldstein, Phil, “Broadcom Acknowledges WiMAX’s U.S. Decline,” FierceWireless, August 12, 

2011 (“Beceem [...] has hedged its bets with an LTE/WiMAX combo chip.”). 

1161 See, e.g., Goldstein, Phil, “Broadcom Acknowledges WiMAX’s U.S. Decline,” FierceWireless, August 12, 

2011 (“Broadcom, which bought WiMAX/LTE chipmaker Beceem last year for $316 million in a bid to get a 

leg up in the 4G market, is acknowledging that WiMAX’s position in the U.S. market is fading fast. 

[...Broadcom executive Michael] Hurlston said Broadcom is ‘re-tasking’ its Beceem team to focus on LTE.”). 

1162 Yoshida, Junko, “Broadcom Buys Renesas’ LTE Assets – IP, SoC & Engineers,” EE Times, September 4, 2013 

(“With the new acquisition deal, Broadcom, which has shipped no LTE products to date, will suddenly own a 

dual-core LTE SoC, developed by Renesas Mobile, ready for volume production and certified by leading global 

operators in North America, Japan, and Europe.”). 

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deficiencies, such as insufficient engineering staff and equipment shortages. 1163 These 

deficiencies stifled Broadcom’s ability to develop an LTE chip. According to one analyst 

estimate, by 2014, “Broadcom [had] spent over $3 billion on cellular baseband related R&D 

since 2007 without profit.”1164

410. Execution: Broadcom’s 2G and 3G execution initially led to strong sales.1165 From 2003 

through 2009, the company released progressively more advanced chips. In 2003, Broadcom 

released a GPRS single-chip modem, which integrated all the analog and digital baseband 

processing functions as well as multiple other circuit functions. 1166 In 2007, Broadcom 

integrated a 3G modem, Bluetooth technology, and a multiband RF transceiver on a single 

 

1163 Rango Deposition, Broadcom, pp. 30–31 (“Q. Another factor you mentioned in your earlier testimony was the 

need for more resources. Could you explain some more about that? A. Yeah. I think at Broadcom, since we 

started the cellular business with this acquisition of Mobilink, there was always a need -- and it was a startup 

company with limited resources -- there was always a need to add more resources to it. And as more cellular 

standards have emerged, 3G and 4G and then various versions of 4G emerged, we, you know, certainly had to 

have more resources. Which in the light of those decreasing ASPs made it very tough. [...] Q. When you refer 

to the need for more resources, what -- what are those resources? A. People. People. Equipment. Test 

resources. FAEs, field application engineers. Mostly people resources in this space because a lot of it is 

software development.”). 

1164 Kundojjala, Sravan, “Intense 3G Price Competition and 4G LTE R&D Took Toll on Broadcom Baseband 

Business,” Strategy Analytics, June 2, 2014. 

1165 Broadcom’s combined GSM and WCDMA modem chip sales increased yearly from 2008 to 2011. See Exhibit 

V.C.8. 

1166 See, e.g., “Broadcom Pushes into Handset Market with China’s Bird,” EE Times, March 18, 2003 (“[...] 

Broadcom also announced that Ningbo Bird has taken its V09 GSM handset into production based on a 

Broadcom reference design and that a range of multimedia-capable GSM/GPRS clamshell handsets are in 

development based on a Broadcom reference design. All of these handsets are based on the ML2011 GSM 

baseband processor and BCM2121 GPRS baseband processor developed by Broadcom’s mobile 

communications business unit formerly known as Mobilink Telecom [...].”). See also “BCM2121 Product 

Brief,” Broadcom, 2003 (“The BCM2121 contains all analog and digital GSM and multislot GPRS baseband 

processing functions on a single silicon substrate. [...] To further reduce overall component count and BOM 

cost, the BCM2121 integrates a number of typical PCB circuit functions such as a PA controller, echo 

cancellation, noise suppression, and hands-free answer sensing.”). 

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chip.1167 In the same year, Nokia chose Broadcom’s 2G EDGE chips because they “deliver[ed] 

an advanced feature-set at low power, small size, and low system cost.”1168 

411. Despite Broadcom’s initial successes, the company encountered execution challenges in the 

3G segment. 

.

1169 Broadcom also began to lose 3G modem chip sales to its 

largest customers. For instance, in 2013, Samsung chose to use Qualcomm’s chips for its 

Samsung Galaxy Grand 2, even though it had used a Broadcom chip in the previous Galaxy 

Grand.1170 Meanwhile, Nokia, which had predominantly used Broadcom for its 2G products, 

started sourcing modem chips from other suppliers for its 3G products.1171 One analyst cited 

Broadcom’s decline in 3G as being due to “intense competition [...] and the maturity of 3G 

baseband technology,”1172 and stated that Broadcom was unable to keep up because it viewed 

 

1167 Bangeman, Eric, “Broadcom Touts New ‘3G Phone on a Chip,’ Could Show Up in 3G iPhone,” Ars Technica, 

October 15, 2007 (“Semiconductor firm Broadcom has become the first chipmaker to announce a single-chip 

3G phone solution. Dubbed the BCM21551, Broadcom’s ‘3G phone on a chip’ moves all of the tech needed for 

a 3G mobile phone to a single 65nm die [...]. [...] The BCM21551 combines a 3G baseband transceiver, 

Bluetooth 2.1, and a multiband RF transceiver on a single chip.”). 

1168 “Nokia Selects Broadcom as a Chipset Supplier for Future EDGE Phones,” Broadcom Press Release, August 8, 

2007. 

1169

1170 Khedekar, Naina, “Samsung Galaxy Grand 2: A Specifications Review,” First Post, December, 23, 2013 

(“Unlike the dual-core Broadcom chipset seen in the Grand, the Grand 2 comes equipped with a quad-core 

Qualcomm chipset – most likely the Snapdragon 400 - clocked at 1.2GHz”). 

1171 See, e.g., “Cellular Handset & Tablet Chip Markets ,” Forward Concepts, 2012, p. 88 (“Broadcom has not 

captured large 3G WCDMA/HSDPA baseband sales at Nokia [...].”). See also Kirk, Jeremy, “Nokia 

Discontinues Some Chipset Development,” PC World, August 8, 2007 (“Texas Instruments Inc. will continue to 

be the primary supplier for a range of chips used in Nokia phones, Suominen said. However, Nokia also said it 

has picked Broadcom Corp. to supply chips with EDGE (Enhanced Data Rates for GSM Evolution) technology. 

Earlier this year, Nokia picked Infineon Technologies AG as a supplier for GSM (Global System for Mobile 

Communications) chips.”). 

1172 Kundojjala, Sravan, “Intense 3G Price Competition and 4G LTE R&D Took Toll on Broadcom Baseband 

Business,” Strategy Analytics, June 2, 2014. 

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its modem chip business as an add-on to its connectivity business, and it thus lagged in 

developing competitive products.1173 

412. Broadcom’s transition to supplying LTE modem chips was unsuccessful and eventually 

contributed to its exit from the industry. While Broadcom had secured design wins for its LTE 

modem chips with Samsung, ZTE, Sony, and HTC, 1174 the sales of those chips were 

minimal.1175 

 

 

 

 

1173 Kundojjala, Sravan, “Intense 3G Price Competition and 4G LTE R&D Took Toll on Broadcom Baseband 

Business,” Strategy Analytics, June 2, 2014 (“In contrast to its connectivity chip business, Broadcom’s 

baseband chips were neither leading edge nor first to market. This situation left Broadcom in catch-up mode in 

basebands and only upcoming LTE SoCs and thin modems would have made it a high-end player in the 

baseband market. Unlike Qualcomm, Broadcom viewed its baseband business as supplementary to its 

connectivity business. For Qualcomm the baseband modem comes first and everything else is a revenue 

expansion opportunity.”). 

1174 BCRM000173–0205 at BCRM000186 (Broadcom, Mobile and Wireless Presentation, November 12, 2013, 

“EOS2 Pricing and Gross Margin Environment”). 

1175 Broadcom sold fewer than 1 million LTE modem chips in 2014. See Exhibit V.C.8. 

1176 

 See also Forward 

Concepts, 2014, p. 69 (“In early 2013, Broadcom announced the BCM21892 3G/4G thin baseband which 

includes support for [...] LTE-Advanced with both TDD and FDD duplex modes.”). 

1177 

 

117 

See also Exhibit QX1005, Rango 

Deposition, Broadcom, BRCM173161–3162 at 3161, email from Patrick Henderson, Broadcom, May 7, 2014 

(“[Apple’s] perception is that we have no great advantage in performance or features and they have some 

concerns in the areas of: envelope tracking and carrier aggregation[;] [...] Commercially, we were in the 

ballpark for terms and pricing but offered no advantage versus competition[.]”). See also Exhibit QX1006, 

Rango Deposition, Broadcom, BRCM173157–3158 at 3157, email from Patrick Henderson, Broadcom, May 

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9. Freescale 

a. Background 

413. Freescale was initially a division within Motorola. It produced semiconductors and was most 

recognized for its automotive chip business.1179 Motorola made an early foray into CDMA in 

the 1990s, when it worked on developing modem chips for its own CDMA-based handsets, 

but abandoned this effort around 1999.1180 In 2004, Motorola spun off Freescale, allowing 

Freescale to become an independent company and one of the world’s largest semiconductor 

suppliers.1181 Freescale’s Wireless and Mobile Solutions Group continued to supply GSM, 

and later also WCDMA, modem chips for Motorola’s mobile devices following the split.1182 

 13, 2014 (“Technically, [Tony Blevins of Apple] indicated that we were about a quarter off of where they 

would need to be for a more positive outcome.”) 

1179 See, e.g., Keever, Scott, “A Brief History of Freescale Semiconductor,” Direct Components, August 19, 2017 

(“Freescale started off as a division of Motorola back in 1948. During this time period, Freescale was known 

for producing semiconductors and one of the first high-power transistors available for commercial use.”). See 

also Doraiswamy, Deepa, “Freescale Semiconductor – Freed from Motorola,” Frost & Sullivan, March 15, 2004 

(“The chip division of Motorola is the most recognized in the semiconductor industry for its automotive chip 

business. [...] Freescale carries with it enormous expertise and experience in the semiconductor industry that 

can be considered an invaluable asset.”). 

1180 See, e.g., Davis Deposition, Intel, pp. 233–235 (“Q. Earlier today you referred to -- to various companies that 

had at least initiated CDMA development efforts at various points in time; [...i]s [p. 22 of Exhibit CX1771] a 

listing of companies that had either attempted to develop or actually introduced CDMA chips at [...] some point 

in time? A. Yes. This is intended to be a list of companies which had done some development or claimed to 

have done development, yes. Q. Of these companies, which found any real commercial traction in the CDMA 

market? A. [...] So early in the market, Nokia, Motorola, and Samsung did have their own development. But 

that was very early, probably pre-1x even. And then -- so those are all phone makers who did their own.”) and 

Exhibit CX1771, VIA-QCOM000638768–8855 at 8789 (Motorola’s start date listed as 1992; “Result[:] 

[...Q]uit producing own chipset circa 99”). See also LaPedus, Mark, “Qualcomm Bars CDMA Chips Sales by 

VLSI Technology,” EE Times, September 10, 1999 (“Gaining ground on Qualcomm in the chip sections are 

two major OEMs – Motorola and Nokia. However, Motorola and Nokia separately develop their own chipsets 

for their own CDMA-based handsets; the two cell-phone giants do not sell these devices on the [merchant] 

market.”). 

1181 See, e.g., “Freescale Semiconductor Completes Spin-off from Motorola,” Business Wire, December 2, 2004 

(“Freescale Semiconductor [...] began its new era as a fully independent company today following Motorola, 

Inc.’s distribution of its remaining equity interest in Freescale on Dec. 2, 2004. [...] Freescale is the thirdlargest independent semiconductor company in the U.S. It is the global market share leader in semiconductors 

for automotive applications, communications processors and wireless infrastructure -- and among the leaders in 

several other large and growing industry segments.”). 

1182 See, e.g., Freescale, 10-K, 2004, p. 11 (“[Freescale’s Wireless and Mobile Solutions Group] designs, 

manufactures and markets platform-level products and semiconductors used in the design and manufacturing of 

wireless mobile devices such as cellular phones, smartphones, personal digital assistants (PDAs), two-way 

messaging devices, global positioning systems, mobile gaming devices and wireless consumer electronics. [...] 

Currently, over 90% of our sales in this group are derived from cellular handsets, with Motorola being our 

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414. In 2005, Freescale acquired PrairieComm, which had assets including technology for a broad 

set of modem chip standards.1183 However, due to a failure to expand its customer base and 

lack of its own 3G modem chip software, Freescale’s modem chip sales began to decline in 

2006 after Motorola started switching to alternative suppliers.1184,1185 Freescale faced further 

challenges in form of resource constraints when it was saddled with a large amount of debt 

after being acquired in 2006 in a “disastrous” buyout with a “rich price tag” by a group of 

private equity firms. 1186 The CEO of Signals Research Group stated in April 2008 that 

Freescale was “not on [his] short list of the cell-phone chipmakers that will survive.” 1187 In 

October 2008 Freescale confirmed that it planned to exit the modem chip industry.1188 The 

 largest end customer [...].”) and p. 12 (“We offer platform-level products for leading cellular protocols, 

including Global Systems for Mobile Communications (GSM), General Packet Radio Service (GPRS), 

Enhanced Data for GSM Evolution (EDGE), integrated digital enhanced network (iDEN) and Universal Mobile 

Telecommunications System (UMTS) [...].”). See also Exhibit V.B.5; “Freescale Closer to Cutting Cord from 

Parent Motorola,” RCR Wireless, May 24, 2004 (“But [Freescale] will still have strong ties with Motorola. 

‘Motorola will commit, on behalf of its cellular subscriber businesses, to purchase from us substantially all its 

cellular baseband semiconductor requirements,’ said Freescale.”). 

1183 “Company Overview of PrairieComm, Inc.,” Bloomberg (“As of February 7, 2005, PrairieComm, Inc. was 

acquired by Freescale Semiconductor Inc. PrairieComm, Inc. develops and markets chipsets, embedded 

software, and licensed intellectual property for CDMA, TDMA, GSM, and 3G UMTS wireless technologies.”). 

1184 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 125 (“Freescale suffers from not having a 

broad customers base to draw upon. They sell largely digital basebands to Motorola for GPRS, EDGE and 

UMTS phones. They suffer from not having mastered their own 3G software stacks for UMTS, WCDMA and 

HSxPA. Although Freescale owns its StarCore DSP chip technology, the 3G stack that it has been shipping to 

Motorola belongs to Motorola...which won’t allow Freescale to deploy it in chips to other handset vendors.”). 

1185 See Exhibit V.C.9. 

1186 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008 (“The acquisition of Freescale 

[by a group of private equity firms] had provoked much skepticism in the buyout world. [...] Freescale’s rich 

price tag – $17.6 billion, then the biggest tech buyout ever – raised more doubts among the financial 

cognoscenti. [...] In paying so much, the buyers – some of the world’s biggest and most respected dealmakers 

– were essentially betting that nothing would go wrong. [...] But Freescale’s owners saddled it with $9.5 

billion to pay for the deal. Now the company must come up with $375 million in interest payments every six 

months. [...] But few recent buyouts have been more disastrous than Freescale’s. [...] The deal closed on 

Dec. 1, 2006.”). 

1187 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008. 

1188 See, e.g., “Freescale Semiconductor Announces Third Quarter 2009 Results,” Business Wire, October 22, 2009 

(“The year over year sales decline was attributable to the company’s decision in 2008 to exit its cellular handset 

business [...]”). See also Deffree, Suzanne, “Freescale Exiting Mobile ICs, Opens Opportunity for 

Qualcomm,” The EDN Network, October 3, 2008 (“[...] Freescale Semiconductor has announced that it is 

exploring options for its cellular handset chipset business that include the unit’s sale or the formation of a joint 

venture.”). 

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company continued with legacy sales through 2013,1189 with “aims to increase its investments 

in the automotive and networking markets.”1190 

b. Analysis 

415. After spinning off from Motorola, Freescale’s experience in the modem chip industry was 

marred by poor foresight and weak execution, despite its level of investment being comparable 

to other modem chip suppliers. Freescale did not diversify its customer base, and fell behind 

its competitors in producing modem chips with features demanded by OEMs. Although 

Freescale was able to successfully bring products to market following the acquisition of 

PrairieComm in 2005, the company was unable to produce competitive modem chips after 

2006. Freescale eventually exited the modem chip industry. 

416. Foresight: Freescale struggled to expand its customer base as an independent entity. At the 

time of the split from Motorola, Freescale “claim[ed] that its independence [would] extend its 

customer base” and “increase its ability to pursue strategic acquisitions,” 1191 but these 

expectations were ultimately not fulfilled.1192 Prior to the spinoff, demand for Freescale’s 

modem chips was heavily dependent on sales of Motorola’s mobile devices, as Motorola 

accounted for roughly two-thirds of Freescale’s sales.1193 When it was established in 2004, 

Freescale entered into a multi-year purchase and supply agreement in which Motorola 

committed to purchase substantially all modem chips for its mobile devices from Freescale 

 

1189 See Exhibit V.C.9. 

1190 Deffree, Suzzanne, “Freescale Exiting Mobile ICs, Opens Opportunity for Qualcomm,” EDN Network, October 

3, 2008 (“Freescale said it is [exploring options for its cellular handset business that include the unit’s sale or 

the formation of a joint venture] as it aims to increase its investments in the automotive and networking 

markets [...].”). 

1191 “Freescale Closer to Cutting Cord from Parent Motorola,” RCR Wireless News, May 24, 2004 (“Freescale 

claims that its independence will extend its customer base, give it direct access to capital markets, increase its 

ability to pursue strategic acquisitions and offer employees more direct incentives [...].”). 

1192 “Baseband Market Share Q3-2009: Infineon and Broadcom Are Improving Market Share,” Strategy Analytics, 

February 26, 2010 (“We expect Freescale to wind down its cellular baseband business in the next 12-24 months 

and halt production as the company failed to diversify its customer base.”). 

1193 Freescale, 10-K, 2004, p. 11 (“Currently, over 90% of our sales in this group are derived from cellular handsets, 

with Motorola being our largest end customer, representing 74%, 69% and 73% of WMSG’s 2004, 2003, and 

2002 sales, respectively.”). 

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through 2006.1194 Once the purchase and supply agreement ended, Motorola shifted much of 

its modem chip purchases to Qualcomm and later to TI,1195 impacting what had historically 

been one of Freescale’s large revenue sources.1196 In the meantime, Freescale failed to attract 

other new customers.1197 Industry analysts noted in 2008 that “Freescale suffer[ed] from not 

having a broad customer base to draw upon.”1198 Freescale’s difficulty in obtaining new 

customers was partly due to the fact that the IP for the software stack in its 3G modem chips 

was owned by Motorola and thus could not be shipped to other OEMs.1199 

417. Investment: Freescale made an investment in its modem chip business via its 2005 acquisition 

of PrairieComm.1200 PrairieComm was a privately held company with a background in the 

 

1194 See, e.g., “Semiconductor Purchase Agreement,” SEC, April 4, 2004 (“If Freescale is competitive with respect 

to pricing, timing and features, then through December 31, 2006, Motorola will purchase from Freescale 100% 

of Motorola’s total purchases of Baseband Semiconductor Family products.”). See also Freescale, 10-K, 2004, 

p. 11 (“As part of our separation from Motorola, we entered into a multi-year purchase and supply agreement 

through the end of 2006. Under this agreement, Motorola has committed, on behalf of its cellular subscriber 

businesses, to purchase from us substantially all of its cellular baseband semiconductor requirements (other than 

cellular baseband products based on code division multiple access technologies which we do not design) for 

cellular handsets designed by Motorola and manufactured by or for Motorola through 2006.”). 

1195 White, Peter, “Motorola-TI Deal Shifts Market for Nokia and Intel, in Quest for Affordable 3G,” Rethink 

Research, February 5, 2007 (“Just two months after signing a major chip deal with Qualcomm, Motorola has 

spread its post-Freescale wings still further and formed a close alliance with Texas Instruments, one that may 

bode ill for Intel as well as Freescale itself in the high end cellphone processor market. [...] Since its exclusive 

agreement with Freescale ended, Motorola has lacked such a close alliance.”). 

1196 See, e.g., White, Peter, “Motorola-TI Deal Shifts Market for Nokia and Intel, in Quest for Affordable 3G,” 

Rethink Research, February 5, 2007 (“Of course, this is bad news for Freescale, which took 25% of its revenue 

from its former parent in 2005.”). See also Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, 

April 3, 2008 (“Sales started slipping just months after [the acquisition of Freescale by a group of private equity 

firms in December 2006]. Freescale’s biggest customer, former parent Motorola, slashed orders, and Freescale 

wasn’t able to add enough new customers to offset the shortfall. Revenues for 2007 tumbled 10%, to $5.7 

billion, even as the industry’s increased 5%. And the news keeps getting worse: On Mar. 26 [2008], Motorola 

announced it was spinning off its cell-phone unit, raising more concerns for Freescale.”). 

1197 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008 (“Soon after [the first quarter of 

2007], giant cellphone maker Nokia (NOK), which Freescale had been counting on as a new customer, decided 

not to use the company’s chips in a new phone model.”). 

1198 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 125. 

1199 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 125 (“[Freescale] suffer[s] from not having 

mastered their own 3G software stacks for UMTS, WCDMA and HSxPA. Although Freescale owns its 

StarCore DSP chip technology, the 3G stack that it has been shipping to Motorola belongs to Motorola...which 

won’t allow Freescale to deploy it in chips to other handset vendors.”). 

1200 The financial terms of the acquisition were not disclosed. “Freescale Strengthens 3G Leadership; Acquires 

Assets of PrairieComm, Inc.” Business Wire, February 7, 2005 (“Freescale Semiconductor, Inc. continues to 

build on its technology leadership with the acquisition of the assets of PrairieComm, Inc. [...] Financial terms 

of the deal will not be disclosed.”). 

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development and sales of products for the GSM, TDMA, CDMA, and WCDMA (UMTS) 

standards.1201 As part of the transaction, 120 employees of PrairieComm joined Freescale.1202

418. The magnitude of Freescale’s firm-wide R&D investment was generally comparable to that of 

many of its competitors.1203 However, following the acquisition of Freescale by the group of 

private equity firms in 2006, Freescale had “a hard [...] time scraping up the $1.2 billion for 

R&D [...] it need[ed] each year to remain competitive” because of large interest payments on 

its debt.1204 The company decided to slightly reduce its R&D budget and focus on efficiency 

and allocation of resources.1205

419. Execution: While Freescale shipped over 50 million modem chips each year from 2002 through 

2007, sales of its modem chips began to stall in 2005.1206 As Freescale’s products were delayed 

and less competitive, Motorola began purchasing modem chips from other suppliers.1207 By 

 

1201 “Company Overview of PrairieComm, Inc.,” Bloomberg (“As of February 7, 2005, PrairieComm, Inc. was 

acquired by Freescale Semiconductor Inc. PrairieComm, Inc. develops and markets chipsets, embedded 

software, and licensed intellectual property for CDMA, TDMA, GSM, and 3G UMTS wireless technologies.”). 

1202 “Freescale Strengthens 3G Leadership; Acquires Assets of PrairieComm, Inc.” Business Wire, February 7, 2005 

(“Freescale Semiconductor, Inc. continues to build on its technology leadership with the acquisition of the 

assets of PrairieComm, Inc. [...] PrairieComm is recognized for its world-class engineering of cellular 

products including software, system-on-chip designs and platform designs. The company has a strong 

background in development and sales of CDMA, TDMA, GSM and UMTS product lines. [...] About 120 

employees are joining Freescale as part of this transaction -- 60 in India and 60 in the United States.”). 

1203 See Exhibits III.E.1–3. 

1204 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008 (“But Freescale’s owners 

saddled it with $9.5 billion to pay for the deal. Now the company must come up with $375 million in interest 

payments every six months. [...] But given its huge interest payments, Freescale is having a hard enough time 

scraping up the $1.2 billion for R&D and $400 million for capital expenditures it says it needs each year to 

remain competitive. [...] To make ends meet, the company is reorganizing operations, revamping its product 

lines, and scouring for customers. All options are on the table – including, for the first time, a breakup.”). 

1205 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008 (“The private equity firms were 

also trying not to fulfill their critics’ most pointed prediction: that they would slash the precious R&D budget. 

After several meetings, the board decided to trim only modestly, from $1.2 billion to $1.13 billion. But 

[Freescale’s CEO] Mayer would have to spend the money more wisely. [...] He also reorganized divisions by 

chip type rather than customer type, so that he could assess how each product was faring and allocate resources 

better. Among his first changes: moving R&D funds from the mobile handset group to the more- stable autochip business.”). 

1206 See Exhibit V.C.9. 

1207 See, e.g., Nuttall, Chris, “Freescale Lacks Scale, Plans Retreat from Mobile Chips,” Financial Times, October 2, 

2008 (“Motorola has been buying more chips from Qualcomm, hitting Freescale’s market share further and 

reducing its revenues from Motorola to below 25 per cent of its total chip sales.”). See also “Cellular Handset 

& Chip Markets,” Forward Concepts, 2008, pp. 37–38 (“Motorola has also been damaged relying on Freescale 

for HSDPA and EDGE baseband modem technology. Freescale was late with its HSDPA chip set [...]. 

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December 2007 Freescale was “sitting on a pile of unsold inventory.”1208 In 2008, Forward 

Concepts reflected that Freescale was still suffering from “not having mastered [its] own 3G 

software stacks,”1209 and Strategy Analytics concluded that Freescale “was not able [to] keep 

pace with other [WCDMA] chip suppliers.”1210 Freescale announced its plan to leave the 

modem chip industry in October 2008,1211 and ceased legacy sales by 2013.1212

10. Spreadtrum 

a. Background 

420. Founded as a private firm in 2001 in Shanghai, China, Spreadtrum is a fabless semiconductor 

company.1213 Spreadtrum was taken public in 2007,1214 and, after a drastic decline in revenue 

in 2008,1215 underwent management changes in 2009.1216 In 2013, Spreadtrum was acquired 

 Fortunately [Motorola] looked at the alternatives, and has renegotiated a deal with CDMA chip supplier, 

Qualcomm, for 3G HSPA devices.”). 

1208 Thornton, Emily et al., “When a Buyout Goes Bad,” Bloomberg, April 3, 2008 (“In December, 2007, [...] 

Freescale was sitting on a pile of unsold inventory.”). 

1209 “Cellular Handset & Chip Markets,” Forward Concepts, 2008, p. 125 (“[Freescale] suffer[s] from not having 

mastered their own 3G software stacks for UMTS, WCDMA and HSxPA. Although Freescale owns its 

StarCore DSP chip technology, the 3G stack that it has been shipping to Motorola belongs to Motorola...which 

won’t allow Freescale to deploy it in chips to other handset vendors.”). 

1210 “Baseband Market Share Q3-2009: Infineon and Broadcom Are Improving Market Share,” Strategy Analytics, 

February 26, 2010 (“[...] Freescale also announced its intention to exit from the cellular baseband market in 

Q3-2008. The company was not able [to] keep pace with other W-CDMA chip suppliers and as a result 

Motorola discontinued Freescale as a W-CDMA supplier.”); 

1211 “Freescale to Focus on Core Units, Exit Mobile IC Business,” EE Times, October 2, 2008 (“Freescale 

Semiconductor has confirmed speculation that it plans to eventually exit the wireless handset chip set business 

and is weighing several options for the unit.”). 

1212 See Exhibit V.C.9. 

1213 “Corporate Overview,” Spreadtrum. 

1214 “Spreadtrum Communications, Inc. Prices Initial Public Offering,” Spreadtrum Press Release, June 27, 2007. 

1215 Spreadtrum, 20-F, 2009, p. 8 (“However, in 2008 and during the first half of 2009, we experienced dramatic 

rates of decline in revenue. Our revenue increased 35.9% from 2006 to $145.5 million in 2007, but our revenue 

declined 24.4% from 2007 to $109.9 million in 2008.”). 

1216 See, e.g., “Spreadtrum Communications, Inc. Announces CEO Appointment,” Spreadtrum Press Release, 

February 13, 2009. See also Balasubramanyam Seshan, “Key Takeaways from Spreadtrum Call over Muddy 

Waters Questions,” International Business Times, June 30, 2011 (“Please explain the sales increase in light of 

the 2009 management changes [...].”). 

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by Tsinghua Unigroup, an operating subsidiary of a state-owned Chinese corporation.1217 

Subsequently, in 2014, 20 percent of Tsinghua Unigroup was acquired by Intel, giving 

Spreadtrum access to some of Intel’s manufacturing and processor technology.1218

421. Though Spreadtrum initially sold “turnkey solutions” that bundled its modem chips with a set 

of third-party mobile components,1219 in the mid-2000s the company moved towards offering 

thin modems as standalone products.1220 As shown in Exhibit V.C.10, by 2008 Spreadtrum 

had released standalone modem chips that supported the GSM standard as well as modem chips 

that supported TD-SCDMA, the standard used by China Mobile. Spreadtrum continued to sell 

large numbers of TD-SCDMA and GSM–compatible modem chips through 2014 and at least 

2017, respectively,1221 long after newer wireless standards gained traction.1222 In addition, 

sales of Spreadtrum’s GSM-only modems increased year-over-year through 2016.1223

 

1217 “Tsinghua Holdings to Buy Chipmaker Spreadtrum,” Reuters, July 12, 2013 (“ [...] Spreadtrum 

Communications will be acquired by a unit of government-owned Tsinghua Holdings for a raised offer price of 

about $1.78 billion.”). 

1218 See, e.g., “Intel and Tsinghua Unigroup Collaborate to Accelerate Development and Adoption of Intel-Based 

Modem Devices,” Intel Press Release, September 25, 2014 (“Intel also has agreed to invest [...] for a minority 

stake of approximately 20 percent of the holding company under Tsinghua Unigroup [...] Under the terms of 

the agreement, Spreadtrum Communications, Inc. will jointly create and sell a family of Intel Architecturebased system-on-chips.”). See also “Spreadtrum Launches 14nm 8-core 64-bit Mid- and High-End LTE SoC 

Platform,” Spreadtrum Press Release, February 27, 2017 (“Built on Intel’s 14nm foundry platform, SC9861GIA is targeting the global mid-level and premium smartphone market [...].”). 

1219 See, e.g., Spreadtrum, 20-F, 2007, p. 35 (“[...W]e offer turnkey solutions, which include devices that combine 

our baseband semiconductors and other third-party wireless handset components such as transceivers and 

memory semiconductors [...].”). See also “Global Cellular Handset and Chip Markets,” Forward Concepts, 

2005, p. 307 (“Spreadtrum is currently shipping a GSM/GPRS baseband chipset [...]. The SC6600 is a fully 

integrated GSM/GPRS single mixed signal chip containing all digital and analog functionality for a GSM/GPRS 

wireless phone.”). 

1220 Spreadtrum, 20-F, 2007, p. 33 (“We derive substantially all of our revenue from the sale of baseband 

semiconductors and turnkey solutions, which include modules and bundled solutions. Our baseband 

semiconductor revenue has increased from $4.1 million for 2005 to $54.9 million for 2006 and $127.1 million 

for 2007. As a percentage of revenue, sales of baseband semiconductors were 0.0%, 0.6%, 10.7%, 51.3% and 

87.4% in 2003, 2004, 2005, 2006 and 2007 respectively. Turnkey solutions have been used to help promote 

and enable the rapid adoption of our baseband processor solutions. [...] Revenue from turnkey solutions as a 

percentage of revenue decreased from 48.7% in 2006 to 12.6% in 2007 as we focused on our higher margin 

baseband semiconductors.”). 

1221 See Exhibit V.C.10. 

1222 See Exhibit V.B.1. 

1223 See Exhibit V.C.10. 

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422. Spreadtrum’s focus on GSM and TD-SCDMA limited its ability to keep up with other wireless 

standards. Spreadtrum released its first WCDMA-compatible chip years after its competitors, 

in 2013,1224 and two years after it acquired WCDMA provider MobilePeak.1225 Continuing its 

strategy of targeting emerging markets,1226 Spreadtrum successfully achieved a large share of 

sales of WCDMA-compatible modem chips (without 4G compatibility) from 2014 onward,1227

despite decreasing use by OEMs of chips with WCDMA, but not 4G, technology. 1228 

Spreadtrum also added 4G compatibility to its product portfolio in 2012, developing LTE chips 

for use in China.1229 Similar to its strategy with earlier generations of wireless standards, 

Spreadtrum has subsequently used its LTE product offerings to expand in emerging 

markets.1230 As of 2017, Spreadtrum began to leverage access to Intel’s processor technology 

to develop SoCs specifically targeting mid-tier and high-end smartphones.1231 This Intel–

 

1224 See Exhibit V.B.5. 

1225 “Spreadtrum Takes Majority Stake in MobilePeak,” EE Times, October 3, 2011, available at 

https://www.eetimes.com/document.asp?doc_id=1260348 (“Spreadtrum (Shanghai) said the acquisition of 

MobilePeak would allow the company to enter the global 3G and LTE markets with WCDMA/HSPA+ 

technology.”). 

1226 See, e.g., “Spreadtrum Announces WCDMA Design Win,” Spreadtrum Press Release, July 30, 2013 (“‘The 

SC7701B opens up a new opportunity for WCDMA devices in emerging markets[.]’”). See also “Spreadtrum 

Communications Joins with Brazil’s Rockcel to Launch a Smartphone for Ordinary Consumers,” Spreadtrum 

Press Release, August 5, 2016 (“ Spreadtrum Communications (‘Spreadtrum’), a leading fabless semiconductor 

company in China with advanced technology in 2G, 3G, and 4G wireless communication standards, today 

announced that its WCDMA/HSPA (+) chipset SC7731G has been adopted by Brazilian mobile manufacturer 

Rockcel in its newly released Quartzo smartphone. [...] ‘Spreadtrum will continue to work closely with its 

customers and to provide emerging markets all around the world with affordable product solutions that deliver a 

better user experience.’”). 

1227 See Exhibit V.B.6 

1228 See Exhibits V.B.1 and V.B.6. 

1229 “Spreadtrum Introduces Single-Chip MultiMode TD-LTE/TD-SCDMA/GSM Baseband Modem at CES 2012,” 

Spreadtrum Press Release, January 9, 2012 (“Our single-chip multi-mode TD-LTE solution is a highly 

integrated platform specifically designed for the communication standards in use in China[.]’”). 

1230 See, e.g., “Spreadtrum LTE SoC Platform Powers Bharat 2, the Latest Smartphone from Micromax,” 

Spreadtrum Press Release, April 24, 2017 (“‘We are delighted to partner with Micromax, one of the leading 

mobile phone manufacturers in India, for its smartphone, Bharat 2.’”). See also “Spreadtrum Partners with 

Algerian Cellphone Maker Condor to Provide North African Users a High-Performance LTE Smartphone 

Solution,” Spreadtrum Press Release, December 15, 2016. 

1231 See, e.g., “Spreadtrum Launches 14nm 8-core 64-bit Mid- and High-End LTE SoC Platform,” Spreadtrum Press 

Release, February 27, 2017 (“Built on Intel’s [...] platform, [Spreadtrum’s LTE SoC] is targeting the global 

mid-level and premium smartphone market [...].”). See also Yan, James, “2017 Spreadtrum Global Partner 

Conference Highlights New Strategy,” Counterpoint, September 7, 2017 (“The SC9853I uses Intel’s advanced 

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Spreadtrum partnership may help Spreadtrum target medium- to high-end customers with 4G 

and even 5G solutions in the years to come.1232

b. Analysis 

423. Spreadtrum’s success in modem chip development has been characterized by effective 

foresight, strategic investments and acquisitions, and the ability to execute chip designs on 

time and at low cost. Spreadtrum has tended to focus on standards that are China-specific or 

popular in emerging markets. For example, it drove its sales with GSM and TD-SCDMA 

compatible modem chips through the early 2010s. Spreadtrum’s historical commitment to 

low-priced, high-quality products has enabled it to undercut competitors such as MediaTek 

and rapidly generate sales. In recent years, Spreadtrum has replicated its strategy successfully 

in the WCDMA and LTE segments, particularly in emerging markets.

424. Foresight: In order to establish its business, Spreadtrum focused first on selling “turnkey 

solutions.”1233 Turnkey solutions allowed new OEMs to purchase a Spreadtrum modem chip 

as part of a set of assembled or unassembled components that addressed many different mobile 

device functionalities. 1234 As Spreadtrum noted in its 2007 annual report, purchasing 

 14-nanometer process technology and utilizes the Intel Airmont processor architecture. It’s designed for the 

global mid-range 4G market.”). 

1232 See, e.g., “Spreadtrum Launches 14nm 8-core 64-bit Mid- and High-End LTE SoC Platform,” Spreadtrum Press 

Release, February 27, 2017 (“Built on Intel’s[...] platform, [Spreadtrum’s LTE SoC] is targeting the global 

mid-level and premium smartphone market [ ...]. [...] Dr. Leo Li, Chairman and CEO of Spreadtrum [said] 

‘Looking ahead, Spreadtrum plans to continue innovating and creating more high-end and differentiated 

products and services.’”). See also “Intel and UniGroup Spreadtrum & RDA Announce 5G Strategic 

Collaboration,” Intel Press Release, February 22, 2018 (“[...T]he companies will collaborate on 5G and develop 

Spreadtrum’s first Android-based high-end 5G smartphone solution [...].”). 

1233 See, e.g., “Spreadtrum Communications’ CEO Discusses Q4 2012 Results - Earnings Call Transcript,” Seeking 

Alpha, February 26, 2013 (“This fast successful ramp of our smartphone chipset was a result of a strong 

expertise in low cost chipset designs and smartphone software and our ability to meet customer needs quickly 

and effectively with our turnkey solutions.”). See also Spreadtrum, 20-F, 2007, p. 33 (“We derive substantially 

all of our revenue from the sale of baseband semiconductors and turnkey solutions, which include modules and 

bundled solutions. [...] As a percentage of revenue, sales of baseband semiconductors were 0.0%, 0.6%, 

10.7%, 51.3% and 87.4% in 2003, 2004, 2005, 2006 and 2007 respectively. Turnkey solutions have been used 

to help promote and enable the rapid adoption of our baseband processor solutions. [...] Revenue from turnkey 

solutions as a percentage of revenue decreased from 48.7% in 2006 to 12.6% in 2007[.]”). 

1234 See, e.g., Spreadtrum, 20-F, 2007, p. 35 (“[... W]e offer turnkey solutions, which include devices that combine 

our baseband semiconductors and other third-party wireless handset components such as transceivers and 

memory semiconductors[.]”) and p. 37 (“We provide turnkey solutions for our customers who want a more 

complete solution and to decrease time-to-market for their products.”). See also “Spreadtrum Profile: Well 

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compatible parts in combination allowed mobile device OEMs to release their devices more 

quickly.1235 This strategy worked, and it propelled Spreadtrum to its first profitable quarter 

and year in 2006.1236 Over time, however, Spreadtrum’s product offerings shifted toward 

standalone modem chips, which yielded higher margins, without including these additional 

turnkey components.1237 Spreadtrum’s standalone modem chip revenues rose from $4 million 

in 2005 (11 percent of the company’s revenue) to $127 million in 2007 (87 percent).1238 In 

2007, Spreadtrum announced its intention to phase out its “turnkey solutions” business by 

2008.1239 

425. In addition, Spreadtrum did not rush to adopt the WCDMA standard, which worked well in 

conjunction with its focus on the low-cost segment. By continuing to focus on GSM and TDSCDMA technology while its competitors focused on transitioning to WCDMA, 1240

 Positioned for Mobile Processor Success,” Strategy Analytics, January 2014, p. 14 (“Spreadtrum’s turnkey 

solutions business model produces an edge in the low-end market.”). 

1235 Spreadtrum, 20-F, 2007, p. 37 (“We provide turnkey solutions for our customers who want a more complete 

solution and to decrease the time-to-market for their products.”). 

1236 See, e.g., Spreadtrum, 20-F, 2007, p. 33 (“We first became profitable in the first quarter of 2006 [...]”). See 

also Jönsson, Anette, “Spreadtrum Prices IPO Above the Range,” FinanceAsia, June 28, 2007 (“[Spreadtrum] 

became profitable in the first quarter 2006 and posted a net profit of $14.4 million last year. In the first quarter 

of 2007 it managed a $2 million profit.”). 

1237 Spreadtrum, 20-F, 2007, p. 33 (“Revenue from turnkey solutions as a percentage of revenue decreased from 

48.7% in 2006 to 12.6% in 2007 as we focused on our higher margin baseband semiconductors.”). 

1238 Spreadtrum, 20-F, 2007, p. 33. 

1239 See, e.g., Spreadtrum, 20-F, 2007, p. 33 (“We phased out our handset board business in 2006, and we intend to 

phase out our module business in 2008.”). See also “Integration & Consolidation: The Roadmap for Wireless 

Semiconductors,” Citigroup Global Markets, November 29, 2007, p. 63 (“Historically, [Spreadtrum] supplied 

handset boards and turnkey services in addition to baseband chips – boards were phased out in 2006 and the 

module business is being phased out during 2007.”). 

1240 For example, between 2004 and 2006 Spreadtrum released the SC6600, SC6800, and SC8800 baseband 

semiconductors. The two former chips were compatible with GSM while the latter was compatible with GSM 

and TD-SCDMA. See, e.g., Spreadtrum, 20-F, 2007, pp. 36–37. See also Spreadtrum 20-F, 2012, p. 15 (“To 

date, most of our revenue has been derived from the sale of products that support 2G, 2.5G, 2.75G, and 3G 

wireless standards, such as GSM, GPRS, EDGE, and TD-SCDMA.”); “Cellular Handset & Chip Markets,” 

Forward Concepts, 2008, p. 13 (“Although it presently constitutes a relatively small part of the cellular handset 

market at 154 million units growing from 93 million sold in 2006, WCDMA handsets embody the more 

advanced capabilities and features. In addition, it is the fastest-growing market segment, growing almost 65% 

in 2007. Consequently, it is a central focus for many handset suppliers.”). Note that MediaTek’s first WCDMA 

and LTE chips were released in 2013 and 2012, respectively. See Exhibits V.B.5 and V.B.7. 

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Spreadtrum continued to grow its sales in both GSM and TD-SCDMA.

1241 As of 2016, 

Spreadtrum was the largest supplier of GSM-only modem chips and the only supplier whose 

GSM sales did not decline relative to the previous year.1242 When Spreadtrum finally did 

develop WCDMA chips, it did so within two years.1243 Departing from its earlier pattern of 

late adoption of standards, Spreadtrum announced its TD-LTE–compatible modem chip in 

January 2012, almost two years before China Mobile’s launch of its TD-LTE network.1244 As 

the volume of WCDMA chips (without 4G compatibility) began to decline worldwide in 

2015,1245 Spreadtrum added FD-LTE–compatible chips to its product line.1246

426. Investment: The company’s efforts have included research into improving product offerings 

for the TD-SCDMA standard that,1247 while geographically concentrated in certain markets, 

 

1241 For example, Spreadtrum sold over 275 million GSM chips each year between 2014 and 2017. Similarly, 

Spreadtrum sold over 40 million TD-SCDMA chips each year between 2012 and 2014. See, e.g., Exhibit 

V.C.10. See also “Cellular Handset and Chip Markets,” Forward Concepts, 2011, p. 84 (“Spreadtrum holds the 

best position [in TD-SCDMA], entering 2011 with its single-chip TD-SCDMA/HSDPA/GSM/GPRS baseband 

[...].”). 

1242 In particular, Spreadtrum sold around 300 million GSM-only chips in each of 2015 and 2016. See Exhibit 

V.C.10 and associated backup. 

1243 Spreadtrum acquired a majority stake in WCDMA modem chip designer MobilePeak in October 2011. By July 

2013, Spreadtrum announced design wins for WCDMA products. See, e.g., Spreadtrum, 20-F, 2012, p. 28. See 

also “Spreadtrum Announces WCDMA Design Win,” Spreadtrum Press Release, July 30, 2013. 

1244 “Spreadtrum Introduces Single-Chip MultiMode TD-LTE/TD-SCDMA/GSM Baseband Modem at CES 2012,” 

Cision PR Newswire, January 9, 2012 (“Spreadtrum Communications, Inc. [...] today introduced its first TDLTE baseband modem, the SC9610.”). See also Goldstein, Phil, “China Mobile Launches TD-LTE Service - 

but iPhone is Still MIA,” FierceWireless, December 18, 2013 (“China Mobile officially launched TD-LTE 

service Wednesday [...].”); “Cellular Handset & Chip Markets,” Forward Concepts, 2012, p. 111 (“Spreadtrum 

Communications in September announced their first major TD-SCDMA contract with Samsung. We believe 

this is because of their integrated TD-LTE and TD-SCDMA baseband, which places them ahead of competition 

in 2012.”). 

1245 See Exhibit V.B.6. 

1246 See, e.g., “Spreadtrum Announces Volume Shipments of 28nm Quad-Core 5-mode LTE and WCDMA SoC 

Platforms,” Spreadtrum Press Release, April 2, 2015 (“Spreadtrum Communications (‘Spreadtrum’) [...] today 

introduced [a] new quad-core SoC platform[], the SC9830A, which supports 5-mode LTE [...]. [...] The 

SC9830A [...] supports [...] LTE FDD [...].”). 

1247 Spreadtrum 20-F, 2009, p. 78 (“Our issued patents and pending patent applications relate primarily to 

technology we have developed for baseband semiconductors, including TD-SCDMA [...] and GSM/GPRS 

technologies.”). See also Spreadtrum, 20-F, 2012, p. 45 (“In the second quarter of 2009, Spreadtrum Shanghai 

entered into two multi-party contracts with a telecom operator to participate in the subsidy program sponsored 

by the telecom operator for the promotion of TD-SCDMA products. According to the contracts, the telecom 

operator agreed to contribute certain research and development funds to Spreadtrum Shanghai to subsidize its 

research and development of TD-SCDMA products if Spreadtrum Shanghai were to achieve certain milestones 

and targets.”). 

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brought Spreadtrum a considerable volume of sales.1248 Spreadtrum leveraged both its past 

experience with TD-SCDMA and its resources acquired from MobilePeak in 2011 to later 

develop multi-mode LTE products.1249 Spreadtrum, furthermore, has enjoyed advantages in 

R&D spending, due to the relatively low payroll costs of Chinese engineers and grants from 

both the Chinese government and a TD-SCDMA network carrier.1250 

427. Spreadtrum focused on low-cost GSM and TD-SCDMA products for a long period of time, 

and it invested in WCDMA later than its competitors.1251 However, its investment in WCDMA 

development, once initiated, was sufficient to create WCDMA chips that ultimately secured 

several sockets. 1252

 

1248 See Exhibit V.C.10. 

1249 See, e.g., “Spreadtrum Takes Majority Stake in MobilePeak,” EE Times, October 3, 2011, available at 

https://www.eetimes.com/document.asp?doc_id=1260348 (“Spreadtrum (Shanghai) said the acquisition of 

MobilePeak would allow the company to enter the global 3G and LTE markets with WCDMA/HSPA+ 

technology. MobilePeak’s 3G technology combined with Spreadtrum’s 40-nm baseband platform will enable 

Spreadtrum to deliver low-cost, high-performance WCDMA solutions for the global market and serve as a 

foundation for the company’s next-generation multi-mode 3G/4G solutions, Spreadtrum said.”). See also 

“Spreadtrum Introduces Single-Chip MultiMode TD-LTE/TD-SCDMA/GSM Baseband Modem at CES 2012,” 

Spreadtrum Press Release, January 9, 2012 (“‘The depth of experience we bring in TD-SCDMA products, 

combined with our early leadership in China’s 4G network evolution, positions Spreadtrum as a long-term 

leading provider of multimode baseband solutions.’”). 

1250 See, e.g., Taulli, Tom, “Speedy Spreadtrum,” The Motley Fool, July 3, 2007 (“With fairly low wage rates, the 

company has a much easier time getting to profitability. Lower payroll costs also leave management free to 

devote more cash to R&D efforts. Of its 727 employees, 514 are engineers, and about half have master’s 

degrees or doctorates.”). See also Spreadtrum, 20-F, 2012, p. 44 (“Our research and development expenses 

have been partially offset by subsidies, including grants we have received from PRC government authorities and 

a telecom operator. For the years ended December 31, 2010, 2011 and 2012, $5.0 million, $2.9 million and 

$23.4 million were recorded as offsets to research and development expenses incurred, respectively. As of 

December 31, 2010, 2011 and 2012, we had total unearned subsidies of $7.2 million, $24.2 million and $14.2 

million, respectively, since the requirements for those specific research and development projects had not been 

fulfilled. We expect to meet all these requirements in later periods before the deadlines set by the government. 

In addition to the government subsidies, for the years ended December 31, 2010, 2011 and 2012, $2.9 million, 

$10.3 million and $1.5 million were recorded as offsets to research and development expenses incurred, 

respectively, which are related to a subsidy program sponsored by a telecom operator for the promotion of TDSCDMA products [...].”). 

1251 For example, Spreadtrum released its first WCDMA chip and first FD-LTE chip in 2013 and 2015, respectively. 

Qualcomm’s first WCDMA and LTE chips were released in 2006 and 2012, respectively. See Exhibits V.B.5 

and V.B.7. See also Spreadtrum 20-F, 2009, p. 78 (“Our issued patents and pending patent applications relate 

primarily to technology we have developed for baseband semiconductors, including TD-SCDMA [...] and 

GSM/GPRS technologies [...].”). 

1252 For instance, Spreadtrum spent $31 million in 2011 to acquire a majority stake in WCDMA modem chip 

designer MobilePeak. By July 2013, Spreadtrum announced design wins for WCDMA products. See, e.g., 

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428. Execution: Spreadtrum’s execution has been characterized by its ability, in most years, to 

deliver products on time and at a price that undercut its competitors. Following a slowdown 

of the Chinese economy and production problems it faced in 2008, Spreadtrum fell behind in 

the development of its new products.1253 Spreadtrum then reorganized its management team 

in 2009,1254 and focused on improving product quality and offering prices 10 to 15 percent 

lower than those of MediaTek.1255 These measures allowed Spreadtrum to rapidly regain 

momentum and return to profitability by 2010.1256 

429. Spreadtrum’s low prices and stable product quality have allowed it to capture a greater 

proportion of the low-end handset segment at the expense of MediaTek.1257 While MediaTek 

focused on bringing high-end features to low-end mobile devices,

1258 Spreadtrum expanded 

its role in TD-SCDMA. 1259 In January 2011, Spreadtrum became the first modem chip 

 Spreadtrum, 20-F, 2012, pp. 5 and 28. See also “Spreadtrum Announces WCDMA Design Win,” Spreadtrum 

Press Release, July 30, 2013. 

1253 “Spreadtrum Communications Inc. Announces Third Quarter 2008 Results,” Spreadtrum Press Release, 

November 6, 2008 (“Q3 was a challenging quarter for us. The slowing Chinese economy dampened domestic 

consumption, including demand for mobile phones in the Chinese market. This resulted in a negative impact on 

a number of our customers. Furthermore, we were affected by the delayed impact of product transition issues. 

We have since resolved these issues and customers are working on new designs.”). 

1254 “Spreadtrum Communications, Inc. Announces CEO Appointment,” Spreadtrum Press Release, February 13, 

2009. See also Balasubramanyam Seshan, “Key Takeaways from Spreadtrum Call over Muddy Waters 

Questions,” International Business Times, June 30, 2011 (“Please explain the sales increase in light of the 2009 

management changes [...].”). 

1255 So, Sherman, “Battered MediaTek Rearms with Android,” Asia Times, April 5, 2011 (“‘[MediaTek’s] rival, 

Spreadtrum, after years of trial, finally, came up with a chip that is stable enough for phone manufacturers,’ said 

an industry insider, ‘With a price about 10-15% lower than MediaTek’s, the Spreadtrum product quickly gained 

market share.’”). 

1256 After incurring losses of over $100 million between Q3 2008 and Q2 2009, Spreadtrum returned to profitability 

in Q3 2009 and reported a net income of $67 million in 2010. Spreadtrum, 20-F, 2012, p. 7. 

1257 So, Sherman, “Battered MediaTek Rearms with Android,” Asia Times, April 5, 2011 (“Spreadtrum previously 

held about 10% of the low-end mobile phone market. With a stable and lower-priced product, its share 

increased rapidly to about 20-25% at the end of last year, the industry insider estimated. MediaTek’s market 

share shrank to 70% while MStar held on to the remaining 5%.”). See also Section V.C.3 on MediaTek. 

1258 See, e.g., MTK_00748746, p. 11, presentation titled “MWS All-Hands Meeting,” MediaTek, November 28, 

2012 .”). See also Section V.C.3 for 

further discussion on MediaTek. 

1259 See Exhibit V.C.10. 

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designer to ship a 40nm TD-SCDMA chip,1260 which was described as “a year ahead of its 

major competitors” and could “deliver low-cost low-power TD handsets at the price of a 2G 

handset.”1261 Spreadtrum offered an integrated modem chip for TD-SCDMA the following 

year.1262

430. Building upon its TD-SCDMA products, in 2012, Spreadtrum began supplying LTE products 

for use in China.1263 Due, again, to its low prices and decent performance,1264 Spreadtrum 

increased its global share of sales of non-4G WCDMA-compatible modem chips from 1.5 

percent in 2013 to 39 percent in 2016.1265 Spreadtrum also expanded its LTE products into 

other regions, such as India and North Africa,1266 and increased its global share in LTE chips 

from 0.4 percent in 2014 to 6.2 percent in 2016.1267

 

1260 Spreadtrum, 20-F, 2012, p. 30 (“We introduced our first 40 nanometer-based TD-SCDMA baseband 

semiconductors in January 2011 and were the first baseband semiconductor company globally to ship a 

baseband product based on this process node.”). 

1261 Royal Bank of Scotland, “Spreadtrum Comm: Spreading Its Wings,” March 4, 2011, p. 1. See also Spreadtrum, 

20-F, 2012, p. 30. 

1262 “Comprehensive Cellphone and Tablet Chip Markets,” Forward Concepts, 2013, p. 104 (“[... I]n 3Q 2012, 

several single core Smartphones appeared embedded with MediaTek (MT6517) and Spreadtrum (SC8810) comprocessors.”) and p. 100 (“[... T]he SC8810 is an integrated, low-power platform for TD-SCDMA mainstream 

Smartphones.”). 

1263 Spreadtrum released its first TD-LTE modem chip in January 2012, even though China Mobile did not launch 

its TD-LTE network until December 2013. See, e.g., “Spreadtrum Introduces Single-Chip MultiMode TDLTE/TD-SCDMA/GSM Baseband Modem at CES 2012,” Spreadtrum Press Release, January 9, 2012. See also 

Goldstein, Phil, “China Mobile Launches TD-LTE Service - but iPhone is Still MIA,” FierceWireless, 

December 18, 2013 (“China Mobile officially launched TD-LTE service Wednesday, as had been expected.”). 

1264 “Facing More Headwinds into 2015; Downgrading to Hold,” Deutsche Bank, September 23, 2014 (“We note 

that Spreadtrum has recently entered mass production for its WCDMA products after going through a slow first 

three quarters of this year. Spreadtrum usually is behind in technology compared to tier one rivals; however, it 

is famous in its low-price strategy, as seen in 2G feature phone and TD smartphone. Our checks suggest that its 

new WCDMA products have decent performance and attractive ASPs [average sale prices].”). 

1265 See Exhibit V.B.6 and associated backup. 

1266 See, e.g., “Spreadtrum LTE SoC Platform Powers Bharat 2, the Latest Smartphone from Micromax,” 

Spreadtrum Press Release, April 24, 2017 (“‘We are delighted to partner with Micromax, one of the leading 

mobile phone manufacturers in India, for its smartphone, Bharat 2.’”). See also “Spreadtrum Partners with 

Algerian Cellphone Maker Condor to Provide North African Users a High-Performance LTE Smartphone 

Solution,” Spreadtrum Press Release, December 15, 2016 (“Spreadtrum Communications (‘Spreadtrum’), a 

leading fabless semiconductor company in China with advanced technology in 2G, 3G, and 4G wireless 

communication standards, today announced that its LTE SoC platform SC9832 has been adopted by Algerian 

cellphone brand Condor. The two companies will collaborate to provide North African users with a highperformance LTE smartphone solution.”). 

1267 See Exhibit V.B.8 and associated backup. 

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431. Since 2014, Spreadtrum has also been able to leverage Intel’s technology to improve its 

products. Intel, which purchased 20 percent of Spreadtrum’s parent company in 2014,1268

supplied Spreadtrum with processor technology and access to its advanced 14nm 

manufacturing process.1269 Spreadtrum also relied on Intel’s technology in its 2017 SC9861GIA chip targeting the “global mid-level and premium smartphone.”1270

11. VIA Telecom 

a. Background 

432. VIA Telecom was formed in 2002 by the Taiwanese PC chip designer VIA Technologies 

through the acquisition of the CDMA design team of San Diego-based LSI Logic.1271 VIA 

Telecom’s strategy was to deliver low-cost CDMA solutions on a global scale.1272 In a 2007 

presentation, VIA Telecom described itself as a “low cost CDMA chipset alternative” with a 

“focus on driving low cost solutions with essential core applications (e.g., voice and data).”1273

 

1268 Shih, Gerry and Noel Randewich, “Intel to Invest Up to $1.5 Billion in Two Chinese Mobile Chipmakers,” 

Reuters, September 25, 2014 (“Intel Corp INTC.O said it will pay as much as $1.5 billion for a 20 percent stake 

in two mobile chipmakers with ties to the Chinese government [...]. Intel will acquire the stake in Spreadtrum 

Communications and RDA Microelectronics through a deal with Tsinghua Unigroup, a government-affiliated 

private equity firm which owns the two mobile chipmakers.”). 

1269 See, e.g., “Intel and Tsinghua Unigroup Collaborate to Accelerate Development and Adoption of Intel-Based 

Modem Devices,” Intel Press Release, September 25, 2014 (“Intel also has agreed to invest [...] for a minority 

stake of approximately 20 percent of the holding company under Tsinghua Unigroup [...]. [...] Under the terms 

of the agreement, Spreadtrum Communications, Inc. will jointly create and sell a family of Intel Architecturebased system-on-chips.”). See also “Spreadtrum Launches 14nm 8-core 64-bit Mid- and High-End LTE SoC 

Platform,” Spreadtrum Press Release, February 27, 2017 (“The successful launch of SC9861G-IA, 

Spreadtrum’s first high-end LTE chip platform based on an Intel architecture and designed on Intel Custom 

Foundry’s 14nm technology platform [...].”). 

1270 “Spreadtrum Launches 14nm 8-core 64-bit Mid- and High-End LTE SoC Platform,” Spreadtrum Press Release, 

February 27, 2017. 

1271 Hung, Faith, “Via Sets Up Wireless Unit Following LSI Logic Deal,” EE Times, July 12, 2002 (“Via 

Technologies Inc. has formed a unit in the U.S. to attack the wireless market following its acquisition of a unit 

of LSI Logic Corp. Named Via Telecom, the new unit is focusing on the development of chipsets used in 2.5G 

and WCDMA mobile phones. The setup comes less than two months after Taipei-based Via Technologies 

bought the CDMA design team of LSI Logic Corp., San Diego, Calif.”). 

1272 Davis Deposition, Intel, Exhibit QX58, VIA-QCOM000688592 at p. 32 (VIA Telecom, “VIA Telecom 

Presentation,” September 2007, “Strategy and Business Objective[:] [VIA Telecom]’s vision is to become the 

low cost CDMA baseband solution provider worldwide.”). 

1273 Davis Deposition, Intel, Exhibit QX58, VIA-QCOM000688592 at p. 18 (VIA Telecom, “VIA Telecom 

Presentation,” September 2007). 

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433. VIA Telecom’s initial CDMA product line had been developed by LSI Logic. 1274 VIA 

Telecom released two CDMA2000 1X modem chips by 2006,1275 launched its first CDMA 

1xEV-DO chip in 2009,1276 and by 2011 was supplying chips to major OEMs including 

Motorola and Samsung.1277 The company also developed a dual-mode GSM/CDMA chip in 

2011.1278 

434. VIA Telecom’s consistent releases of CDMA modem chips for low-end and emerging markets 

contributed to a steady increase in sales through 2012.1279 However, since VIA Telecom never 

developed its own LTE chip,1280 the demand for the company’s chips dropped precipitously 

 

1274 As of 2002, LSI Logic was selling two CDMA modem chips, the SignalSphere CBP 3.0 and the SignalSphere 

CBP 4.0. See, e.g., Lemon, Sumner, “Via Resolves CDMA Licensing Question with Qualcomm,” InfoWorld, 

June 26, 2003 (“At the time the acquisition was announced, LSI Logic offered two baseband processors for 

CDMA handsets: the SignalSphere CBP 3.0 [...] and the SignalSphere CBP 4.0 [...].”). See also “Global 

Cellular Handset & Chip Markets,” Forward Concepts, 2005, pp. 292–293 (“VIA Telecom’s single-chip 

CBP4.0 CDMA Baseband Processor [...] is said to be the industry’s most integrated single chip baseband 

processor solutions, providing a complete cdma2000 Release 0 solution [...]. In July 2004, LG Telecom [...] 

announced launching of an ultra-slim and lightweight bar type PCS phone (NS1000) adopting VIA’s CDMA 

chip (CBP4.0).”). 

1275 “Cellular Handset & Chip Markets,” Forward Concepts, 2006, p. 113 (“The CBP 5.0 is a complete 3G 

CDMA2000® 1X Release 0 solution and is backward-compatible to IS 95 standards. Maximized to deliver 

optimum performance and high affordability, CBP5.0 includes the essential features manufacturers need to be 

successful in today’s entry-level phone market. [...] The CBP6.0 baseband provides a network-compliant 3G 

CDMA2000® 1X Release A solution. [...Products using VIA Telecom’s chips] all appear to be [...] targeted at 

offering a lower-cost CDMA non-browser, SMS- and voice-centric CDMA handsets.”). 

1276 Davis Deposition, Intel, Exhibit QX65, VIA-QCOM00568897 at p. 4 (VIA Telecom, “VIA Telecom,” February 

2, 2015, “2009[:] [...] Launched 3G EVDO chipset CBP7.0/7.1.”). 

1277 See, e.g., “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 90 (“VIA 

Telecom’s introduction of EV-DO contributed to its 55% growth in CDMA baseband chip sales. [...] The 

CDMA1x EV-DOrA units were mostly sold to Motorola and Samsung for EVDO-LTE Smartphones at 

Verizon.”) and p. 92 (“VIA Telecom’s EVDO Rev A CBP7.1 baseband device has been found inside 

Samsung’s Stealth Smartphone and the Galaxy Tab 10.1. Yulong’s Coolpad D530 and E239 Smartphones 

embeds the CBP7.1 baseband with 600MHz OMAP 3630 application processor sold to Reliance (India) and 

China Telecom (China). The Kunlun-Wind River Android Smartphone uses the CBP7.0 inside targeted the 

$100 market.”). See also Klug, Brian, “Samsung Droid Charge Review - Droid Goes LTE,” AnandTech, June 

22, 2011 (“What’s particularly curious about the Charge is that there’s no Qualcomm baseband for 

CDMA2000. Both 1x and EVDO are handled by VIA Telecom’s CBP7.1 baseband.”). 

1278 “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 2013, p. 92 (“In 2011, VIA also added 

a dual baseband, supporting either GSM/CDMA or GSM-GSM dual-call and dual-standby modes. This is an 

important feature for India, China and other parts of Asia. [...] VIA Telecom’s single-chip CBP2.0 baseband 

processors support CDMA2000-1x RTT and CDMA2000/GSM dual-mode technologies.”). 

1279 See Exhibit V.C.11. 

1280 Davis Deposition, Intel, pp. 32–33 (“Q. Did VIA Telecom ever work on a multimode chipset that would have 

involved LTE capability? A. [...] I would say that the simple answer is probably no, but we did have some, 

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after 2012 as CDMA single mode chip sales declined and LTE chip sales rose.1281 

1282 

.

1284,1285

b. Analysis

435. VIA Telecom was relatively successful in achieving its initial goals as a low-cost CDMA 

modem chip supplier. However, the company was unable to expand its position in the industry 

and was eventually forced to sell its CDMA business due to poor long-term alignment with 

 say, simulation and system design, some exploration in LTE. But [...] it certainly did not result in a chip, and I 

wouldn’t say that we had a chip project with LTE.”). 

1281 See Exhibits V.B.1 and V.C.11. 

1282 

1283 

1284 Goldstein, Phil, “Intel Continues to Pare Mobile Losses, Buys CDMA Modem Assets from VIA Telecom,” 

FierceWireless, October 14, 2015 (“Intel spokeswoman Stephanie Matthew confirmed to FierceWireless that 

[Intel] had purchased VIA’s CDMA modem assets.”). 

1285

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demand and limited R&D investments. Though VIA Telecom realized favorable outcomes 

from its decision to target OEMs selling low-end CDMA devices in emerging markets, success 

in more recent years was hindered by the company’s lack of LTE expertise. As mobile device 

OEMs increased demand for modem chips with non-CDMA technology in the early 2010s, 

VIA Telecom, constrained by its niche position in the industry, was unable to provide such 

solutions on its own. 

436. Foresight: In its early years as a CDMA modem chip supplier, VIA Telecom showed good 

foresight, but later succumbed to technological change that led to its sale to Intel. 

 

.

1287 Partially as a result 

of its efforts in the low-end space, the company’s sales increased each year between 2008 and 

2012.1288 

437.

1289 

 

1286 

1287 

1288 See Exhibit V.C.11. 

1289 See, e.g.,

 See also Section III.E 

for a discussion of EV-DO and EV-DV. 

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VIA Telecom was also late to develop EV-DO modem chips. While Qualcomm launched its 

first EV-DO chip in 2001, VIA Telecom did not reach this milestone until 2009.1290 Although 

VIA Telecom nearly caught up to Qualcomm in terms of the CDMA standards its modem chips 

supported, this outcome can be partially attributed to the fact that, according to former VIA 

Telecom CTO, Mark Davis, further development of the CDMA standard did not progress at 

the same pace as it had in earlier years.1291 

438. Additionally, VIA Telecom was not in a position to thrive as network carriers began to shift to 

LTE. As early as 2008, VIA Telecom stated in a presentation its view that LTE was going to 

become the global 4G standard.1292 However, the company did not develop an LTE chip at 

this time. According to Intel’s Hermann Eul, in 2011, representatives from VIA Telecom 

privately acknowledged that “[VIA Telecom’s] business [was] not doing well in the long run 

as CDMA is to[o] niche [... to] stand alone.”1293 

 

 

 

1290 See Exhibit V.B.3. 

1291 Davis Deposition, Intel, p. 62 (“Q. Let me try it this way: [while you were at VIA Telecom,] [w]as VIA 

Telecom trying to develop the newest and latest features to include before anybody else in CDMA chipsets? A. 

[...] Of course our goal was to always design the best product that we could. It was [...] hard to keep up with 

the evolution of the standard at some points. Later in the evolution of 3GPP2, it became a little bit easier to 

catch up because the evolution slowed down.”). 

1292 VIA-QCOM000638768–8844 at 8818, presentation titled “VIA Telecom Presentation,” VIA Telecom, 

November 2008 (“[...E]ventually there will be one world standard: LTE[.]”). 

1293 INTEL-QCOM007840873–0878 at 0875, email from Hermann Eul, Intel, August 4, 2011. 

1294 

1295 

 

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.

1296 

439. Investment: 

 

 

1300 it limited the company’s 

ability to expand its product portfolio by offering modem chips with more advanced features. 

For example, VIA Telecom never invested in developing integrated chips due to the high cost 

associated with such an endeavor.1301

 

1296

1297 See, e.g., 

 

 See also Exhibit III.E.1. 

1298 See Exhibit III.E.1. 

1299 

1300 

1301 See, e.

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440. Execution: VIA Telecom’s emphasis on developing low-cost modem chips made the company 

attractive to OEMs designing budget handsets. Because of the low cost of its modem chips, 

VIA Telecom achieved numerous design wins with OEMs targeting emerging markets.1302 

The “aggressive pricing” of VIA Telecom’s CDMA2000 1xEV-DO modem chips was one of 

the primary reasons for their success.1303 Even though these modem chips sampled for an 

extended period before commercialization and trailed Qualcomm’s CDMA2000 1xEV-DO 

products in modem performance and features offered, 1304 , 1305

 

1302 See, e.g., “Cellular Handset & Chip Markets,” Forward Concepts, 2006, p. 113 (“We are aware of five small 

handset suppliers using Via Telecom’s chip sets in handsets in China --- Dragon, Toranado, Aspen, ArTennis, 

and one card supplier. These products all appear to be all targeted at offering a lower-cost CDMA non-browser, 

SMS- and voice-centric CDMA handsets.”). See also “Cellular Handset & Chip Markets,” Forward Concepts, 

2008, p. 156 (“VIA Telecom has received certification of its CDMA 2000 1xRTT-compliant handset chipsets 

from Nokia, with the handset vendor’s China-based ODM partner BYD to start shipping CDMA handsets with 

VIA Telecom’s chipsets to Nokia in early 2008. [...] Dopod joins the growing list of other customers such as 

Haier and Inventec who have chosen VIA’s CDMA Baseband Processor (‘CBP’) solution for ultra low and lowcost handset solutions targeting the emerging markets.”). 

1303 See, e.g., Lederer Deposition, Exhibit 3, Q2014FTC03837571–7600 at 7599 (Qualcomm, February 28, 2011 

email, with attached presentation on QCT Competitive Perspective, February 2011, 

 See also “Comprehensive Cellphone & Tablet Chip 

Markets,” Forward Concepts, 2013, p. 91 (“VIA Telecom has been able to price the two-chip EVDO Rev A 

platform based on a 3rd party RF cheaper than the Qualcomm QSC6085 single-device --- a hybrid device 

embedding three die, PMU, RF and EVDO Rev A baseband.”). 

1304 See, e.g., Lederer Deposition, Exhibit 3, Q2014FTC03837571–7600 at 7590 (Qualcomm, February 28, 2011 

email, with attached presentation on QCT Competitive Perspective, February 2011, 

. See also “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 104 (“VIA Telecom’s EVDO baseband products sampled in Q2 2009 to the China market, and the company expected volume shipments 

to begin by early 2010. However, we have yet to see the chip set in any handsets.”). 

1305 See, e.g., Lederer Deposition, Exhibit 3, Q2014FTC03837571–7600 at 7599 (Qualcomm, February 28, 2011 

email, with attached presentation on QCT Competitive Perspective, February 2011, “

. See also “Comprehensive Cellphone & Tablet Chip 

Markets,” Forward Concepts, 2013, p. 91 (“Qualcomm and VIA Telecom are the sole suppliers of 

CDMA20001x, chipsets...in addition to the more advanced CDMA EV-DO- Rev. 0, RevA, or RevB units. [...] 

During 2012 Qualcomm introduced CDMA-Advanced 1X technology (quadrupling voice calls), simultaneous 

voice and EV-DO data, and dual-carrier (dual-cell) CDMA Rev B, doubling data rates from 3 Mbps theoretical 

supplied by Revision A. Qualcomm offers a secondary advantage over VIA Telecom, which includes support 

for GPS and assisted GPS (A-GPS), Advanced 1X and Rev B support. The GPS receiver is embedded inside 

the RF Transceiver and software supported via the Qualcomm basebands.”). 

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.

1306 As noted by industry analysts and also acknowledged by VIA 

Telecom, some of VIA Telecom’s success was also due to a desire of mobile device OEMs 

such as Samsung and Motorola to diversify their supplier portfolios and add a non-Qualcomm 

source of CDMA modem chips.1307

12. Marvell 

a. Background

441. Marvell, a fabless semiconductor company founded in 1995,1308 entered the modem chip 

industry by acquiring Intel’s modem chip and AP business in 2006.1309 By 2009, Marvell had 

produced multiple WCDMA and TD-SCDMA modem chips.1310 Marvell sold the majority of 

 

1306 

1307 See, e.g., Lederer Deposition, Exhibit 3, Q2014FTC03837571–7600 at 7599 (Qualcomm, February 28, 2011 

email, with attached presentation on QCT Competitive Perspective, February 2011, 

 See also “Comprehensive Cellphone & Tablet Chip Markets,” Forward Concepts, 

2013, p. 91 (“It is clear that Motorola and Samsung would prefer to have an alternative supplier [to Qualcomm] 

for CDMA 1X EVDO Rev A.”); 

1308 “Marvell Technology Group Company Profile,” DesignNews (“Founded in 1995, Marvell Technology Group 

Ltd. has operations worldwide and more than 7,000 employees. [...] A leading fabless semiconductor 

company, Marvell ships over one billion chips a year.”). 

1309 “Marvell Completes Acquisition of Intel’s Communications and Applications Processor Business,” Marvell 

Press Release, November 8, 2006 (“[M]arvell Technology Group, Ltd. [...] today announced that it has 

completed the acquisition of Intel’s cellular and applications processor business. [...] This purchase will give 

Marvell a strong presence in the growing market segment for cellular baseband and applications processors 

used in cellular and smart handheld devices.”). 

1310 Marvell developed modem chips for the following standards: GSM, GPRS, EDGE, WCDMA, HSPDA, and 

TD-SCDMA. Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to 

Reconsider Its Baseband Position,” Strategy Analytics, November 2009, p. 9 (“Exhibit 5: Marvell’s 

GSM/GPRS/EDGE/W-CDMA/HSDPA/TD-SCDMA baseband processors”). 

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its WCDMA modem chips to its largest customer,1311 BlackBerry (RIM),1312 and sold its TDSCDMA modem chips to Chinese mobile device OEMs.1313

442. In 2012, BlackBerry’s year-over-year mobile device sales began decreasing, and the 

company’s modem chip purchases from Marvell declined. 1314 Despite losing WCDMA 

modem chip sales from BlackBerry, Marvell was well positioned to generate sales in the TDSCDMA segment.1315 Marvell also made progress in the LTE segment by sampling its first 

multi-mode LTE chip in late 2011.1316 As Chinese carriers started to switch from TD-SCDMA 

to LTE networks,1317 Marvell faced increased pressure to compete in the LTE segment. 

 

1311 From 2008 to 2017, approximately 65 percent of Marvell’s total WCDMA handset modem chip sales went to 

BlackBerry. See Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker for Qualcomm: 

Parts 1 and 2,” April 6, 2018. See also Chhabra Deposition, Marvell, pp. 16–17 (“Q. [...] At the time you 

were senior director for product lines in the mobile group, who were Marvell’s principal customers? A. 

BlackBerry, and maybe other customers in other places. Q. Was BlackBerry at that time by far Marvell’s 

largest customer? A. Yes.”). 

1312 RIM re-branded itself as BlackBerry in 2013. See, e.g., Rocha, Euan and Sinead Carew, “RIM Rebrands as 

BlackBerry; Launches Nifty New Devices,” Reuters, January 30, 2013 (“Chief Executive Thorsten Heins also 

announced that RIM was abandoning the name it has used since its inception in 1985 to take the name of its 

signature product, signaling his hopes for a fresh start for the company that pioneered on-your-hip email. ‘From 

this point forward, RIM becomes BlackBerry,’ Heins said at the New York launch. ‘It is one brand; it is one 

promise.’”). 

1313 Chinese OEMs Coolpad, Huawei, and ZTE comprised three of the top five customers for Marvell, as measured 

by devices sold from 2008 through 2017. See Strategy Analytics, “Customised Baseband Quarterly Market 

Share Tracker for Qualcomm: Parts 1 and 2,” April 6, 2018. See also “Marvell Empowers Mass Market TDSCDMA OPhones with PXA920 Chipset,” Marvell Press Release, September 8, 2009 (“[M]arvell [...] today 

announced the culmination of several years of investment in the China smartphone market with the introduction 

of the Marvell PXA920, the first single-chip solution enabling mass market availability of TD-SCDMA 

smartphones by the world’s largest carrier, China Mobile. [...] The PXA920 processor [...] is China Mobile 

OPhone ready [...].”). 

1314 BlackBerry’s chip purchases from Marvell declined yearly from 2010 through 2015 as Blackberry’s overall 

volume of modem chip purchases declined from 2011 through 2017. See Exhibit V.C.14b. 

1315 Yoshida, Junko, “Analysts Clash Over Where Marvell Ranks Among Smartphone Suppliers,” EE Times, 

October 15, 2012 (“‘Marvell is a major supplier of application processors [and baseband], not only for Research 

in Motion (RIM) but also for China TD-SCDMA cellphones from companies like Asus, Huawei, Lenovo, Sony, 

TCL-Alcatel, Tianyu and ZTE,’ Strauss noted.”). 

1316 “Marvell Launches Multi-mode LTE to Initiate a New Era of Global Connectivity,” DigiTimes, June 28, 2012 

(“It is note-worthy that Marvell’s first multi-mode LTE chip sampled in October 2011 has performed extremely 

well in a variety of verifications.”). 

1317 Kinney, Sean, “RIP: China Mobile’s TD-SCDMA 3G Network (2009-2014),” RCR Wireless News, December 

17, 2014 (“China Mobile, the largest mobile carrier in the world, is reportedly cutting expansion of its TDSCDMA 3G network and focusing on its TD-LTE network, which supports 4G connectivity. [...] From that 

report: ‘In the past year, demand for 3G wireless has been fading as consumers migrate to newer, faster 4G 

services, including a network built on China Mobile’s 4G TD-LTE standard.’”). 

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443. From 2013 through 2015, Marvell released multiple LTE chips that integrated APs as well as 

GPS, Bluetooth, and Wi-Fi technologies.1318 Marvell secured LTE design wins with Samsung 

and other OEMs;1319 however, over time, these design wins did not generate enough unit sales 

to compensate for decreases in the company’s WCDMA and TD-SCDMA chip sales.1320 

Facing declining sales and a limited major OEM customer base, in 2015 Marvell decided to 

exit the modem chip industry and instead focus on its IoT and automotive businesses.1321 

 

1318 See, e.g., “Marvell Unveils Industry’s First Mass Market Quad-core 5-mode Category 4 LTE Single-chip 

Solution, Accelerating Mobile Broadband Adoption Worldwide,” Marvell Press Release, May 20, 2013 

(“Marvell introduces the PXA1088 LTE, expanding the best-in-class unified multi-core worldmode single-chip 

ARMADA Mobile family with LTE Category 4 capability and 5-mode cellular support.”). See also Yoshida, 

Junko, “Will New SoCs Keep Marvell at No. 2 in China’s LTE Market?” EE Times, November 17, 2014 

(“Marvell announced Monday (Nov. 17) two new 64-bit mobile processors targeting the fast growing global 

LTE market: a new mobile SoC based on octa-cores for high performance smartphones and tablets and another 

that uses quad-cores for economy models. [...] Marvell’s new mobile processor featuring eight ARM Cortex 

A53 cores, called Armada Mobile PXA1936, delivers five basebands. [...] Asked what differentiates Marvell’s 

chips in the Armada family, Forward Concepts’ Strauss pointed out that Marvell’s LTE/TD-SCDMA modem 

gathers GPS, Bluetooth, and Wi-Fi all on the same die.”). 

1319 See, e.g., “Meizu Launches its Flagship MX4 Pro Premium 4G LTE Smartphone for China Mobile and China 

Unicom Powered by Marvell’s ARMADA Mobile 5-mode 4G LTE Solution,” Marvell Press Release, 

November 19, 2014 (“Marvell’s ARMADA Mobile PXA1802 5-mode 4G LTE modem is at the core of 

Meizu’s Flagship MX4 Pro Premium Smartphone, now available for more than one billion of combined 

subscribers of China Mobile and China Unicom.”). See also “Marvell’s Mobile LTE Solution to Power 

Lenovo’s First TD-LTE Advanced Smartphone,” Marvell Press Release, February 18, 2014 (“Marvell’s 

industry leading ARMADA Mobile quad-core PXA1088 LTE single-chip platform enables high performance, 

field-proven connectivity and cost effective solution for Lenovo’s A788T mainstream 4G LTE smartphone.”); 

“Samsung Launches New Global Mass Market Galaxy J1 LTE Smartphone Powered by Marvell’s IndustryLeading ARMADA Mobile PXA1908 Platform,” Marvell Press Release, March 2, 2015 (“[...T]he Marvell 

ARMADA Mobile PXA1908 platform and advanced Avastar 88W8777 wireless connectivity solution were 

selected by Samsung Mobile to power select models of its new global mass market LTE smartphone, the 

recently announced Samsung Galaxy J1 LTE smartphone.”). 

1320 Marvell’s total modem chip sales dropped by roughly 25 million from 2014 to 2015. Its combined TD-SCDMA 

and WCDMA modem chip sales had decreased by approximately 27 million, while its LTE modem chip sales 

had only increased by about 3 million. See Exhibit V.C.12 and associated backup. In 2014, Marvell shipped 

roughly 15 million chips to its largest customer, Samsung, with fewer than 10 million modem chips sold to each 

of its other OEM customers. See Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker 

for Qualcomm: Parts 1 and 2,” April 6, 2018. 

1321 “Marvell Technology Group Ltd. Announces Significant Restructuring of Mobile Platform Business,” Marvell 

Press Release, September 24, 2015 (“Marvell will continue its strong commitment to wireless connectivity such 

as WiFi and other wireless standards needed to support its strategies in existing markets as well as expanding 

into emerging opportunities in IoT and automotive. [...] [Marvell] plans to significantly downsize the mobile 

platform organization to refocus its technology to emerging opportunities in IoT, automotive, and 

networking.”). 

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Marvell stopped selling modem chips after 2016,1322 and was unable to find a buyer for its 

modem chip business.1323

b. Analysis 

444. Marvell’s exit from the modem chip industry was primarily due to its poor foresight regarding 

LTE development, inefficient R&D investments, and inferior execution compared to its 

competitors. Initially, Marvell was a strong competitor as it had acquired WCDMA technology 

from Intel and had entered the TD-SCDMA segment early. However, Marvell was late to 

develop competitive LTE chips and struggled to sell them on schedule. 

 As a result, Marvell was unable to effectively compete on either 

the high-end or low-end. 

445. Foresight: Marvell had mixed success in producing chips for new wireless standards. In 2006, 

Marvell entered the WCDMA segment by acquiring Intel’s chip business, 1324 whereas 

suppliers such as Qualcomm and Broadcom had entered beforehand.1325 However, two years 

later, Marvell exhibited strategic foresight by investing in TD-SCDMA with the intention of 

growing its business in China.1326 Marvell collaborated with China Mobile to release its first 

TD-SCDMA chip in 2009, which China Mobile used in its OPhone handsets.1327 Between 

 

1322 See Exhibit V.C.12. 

1323 Eassa, Ashraf, “3 Reasons Marvell Wasn’t Able to Find a Buyer for Its Mobile Business,” The Motley Fool, 

September 28, 2015. 

1324 In 2005, Intel announced its PXA9xx WCDMA processors. In 2006, Intel sold its communication processor 

and application processor business unit to Marvell. Kundojjala, Sravan and Stephen Entwistle, “Baseband 

Processor Profile: Time for Marvell to Reconsider Its Baseband Position,” Strategy Analytics, November 2009, 

p. 6 (“Exhibit 1: Marvell’s Key Cellular Baseband Activities[:] [...] [;] July 2006 [...] Intel divests its 

communication processor and application processor business unit to Marvell [...] [;] 2005 [...] Intel announces 

PXA9xx W-CDMA processors[.]”) 

1325 Qualcomm and Broadcom entered the WCDMA segment in 2001 and 2005, respectively (See Exhibit V.B.5). 

1326 Chang, Lu, “TD-SCDMA and China 3G,” Marvell White Paper, January 2012, p. 5 (“Recognizing the potential 

of the China and TD-SCDMA market, Marvell made a strategic decision in 2008 to invest in the development 

of TD-SCDMA technology for a single-chip smartphone solution.”). 

1327 “Marvell Empowers Mass Market TD-SCDMA OPhones with PXA920 Chipset,” Marvell Press Release, 

September 8, 2009 (“[M]arvell [...] today announced the culmination of several years of investment in the 

China smartphone market with the introduction of the Marvell PXA920, the first single-chip solution enabling 

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2011 and 2013, Marvell’s year-over-year sales of TD-SCDMA chips consistently 

increased.1328 However, according to analysts at Strategy Analytics, Marvell’s TD-SCDMA 

strategy was not able to offset lost sales from its biggest customer, BlackBerry. 1329 

Furthermore, Marvell’s overall TD-SCDMA sales were smaller than sales of its competitors, 

such as MediaTek and Spreadtrum.1330 

446. Despite Marvell’s foresight in TD-SCDMA, analyst reports indicate that the company was not 

adequately prepared for the emergence of the LTE standard. By 2009, analysts at Strategy 

Analytics believed that Marvell did not have an LTE roadmap, and that this “could put Marvell 

behind its competitors.”1331 This lack of foresight preceded execution issues; at the end of 

2010, Marvell indicated that it would not be able to deploy LTE chips in 2011, and that it 

would potentially fail to deploy LTE chips with backward compatibility by 2013.1332 

447. Investment: Marvell’s investment in modem chip technology was substantial but inefficient. 

Marvell entered the modem chip industry in 2006 by acquiring Intel’s modem chip and AP 

 mass market availability of TD-SCDMA smartphones by the world’s largest carrier, China Mobile. [...] The 

PXA920 processor [...] is China Mobile OPhone ready [...]. [...] ‘China Mobile will work closely with 

Marvell [...] to deploy the PXA920 and we look forward to the rapid launch of next generation TD-SCDMA 

OPhones based on the Marvell PXA920.’”). 

1328 In 2011, 2012, and 2013, Marvell sold roughly 4 million, 16 million, and 19 million TD-SCDMA modem chip 

units, respectively. See Exhibit V.C.12. 

1329 Yoshida, Junko, “Analysts Clash Over Where Marvell Ranks Among Smartphone Suppliers,” EE Times, 

October 15, 2012 (“According to Strategy Analytics, Marvell's strong performance in TD-SCDMA smartphone 

apps processor shipments to China Mobile were not enough to offset declining shipments at RIM, a big Marvell 

customer.”). 

1330 Between 2011 and 2013, Marvell sold a total of roughly 40 million TD-SCDMA modem chips. During the 

same period, MediaTek and Spreadtrum sold a total of roughly 110 million and 163 million TD-SCDMA 

modem chips, respectively. See Exhibits V.C.3, V.C.10, V.C.12, and associated backups. 

1331 Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to Reconsider Its 

Baseband Position,” Strategy Analytics, November 2009, p. 11 (“Marvell currently does not have HSPA 

basebands and a visible LTE product roadmap. We believe this lack of an LTE roadmap could put Marvell 

behind its competitors Qualcomm, ST-Ericsson and Infineon.”). 

1332 See, e.g., Chhabra Deposition, Marvell, p. 44 (“Q. And so was it already clear to you toward the end of 2010 

that Marvell would miss stage 1 of LTE deployment? A. Yes. [...] Q. Do you see that there’s an arrow next to 

stage 2, at 2013, which reads, ‘We could be at edge of Missing this cycle’? A. Yes. Q. And did you believe at 

this time that Marvell was at the edge of missing stage 2 of LTE deployment in 2013? A. Global level, yes.”). 

See also Exhibit QX301, Chhabra Deposition, Marvell, MRVL-00112437–2470 at 2451, presentation titled 

“CCBU,” Marvell, November 2011 (“Stage 1 @ 2011[:] LTE Data only [...] Stage 2 @ 2013[:] LTE Data with 

CS fallback[;] Multimode handsets[.]”). 

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businesses for $600 million,1333 and inherited BlackBerry as a customer.1334 Marvell’s modem 

chip R&D spending was generally on the order of $1 billion, or about 30 percent of its 

revenue.1335 As of 2009, the company was employing over 4,000 R&D personnel.1336 While 

Marvell’s R&D expenditures did not match those of the leaders in the industry, its spending 

was substantial and comparable to other followers such as MediaTek or Broadcom. 1337 

However, according to Vivek Chhabra, former VP of Marvell’s mobile group, Marvell had not 

allocated its R&D resources effectively because it had invested in multiple design centers.1338 

Chhabra also indicated that it would have been more efficient for Marvell to “consolidate 

design centers” and “streamline products.”1339 By financial quarter Q1 2016,1340 Marvell had 

a negative operating income of $43 million, partially due to unnecessary R&D expenses.1341

448. Execution: Marvell was unable to execute and develop cost-effective and technologically 

competitive modem chips. Marvell fell behind its competitors in developing certain modem 

chip features desired by customers, such as multi-SIM support.1342 In addition, Marvell did 

 

1333 “Marvell to Purchase Intel’s Communications and Application Processor Business for $600 Million,” Intel 

Press Release, June 27, 2006 (“Marvell Technology Group, Ltd. and Intel Corporation today announced that 

they have signed an agreement for Intel to sell its communications and application processor business to 

Marvell for a purchase price of $600 million plus the assumption by Marvell of certain liabilities.”). 

1334 “Marvell to Purchase Intel’s Communications and Application Processor Business for $600 Million,” Intel 

Press Release, June 27, 2006 (“[Intel’s communications and application] processors, based on Intel XScale 

technology, include the Intel PXA9xx communications processor, codenamed ‘Hermon,’ which powers 

Research in Motion’s (RIM) Blackberry 8700 device.”). 

1335 See Exhibit III.E.1 and III.E.3. 

1336 Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to Reconsider Its 

Baseband Position,” Strategy Analytics, November 2009, p. 7. 

1337 See Exhibit III.E.1. 

1338 Chhabra Deposition, Marvell, p. 177 (“Q. Was it your view that Marvell’s R&D expenses were excessive [in 

2015]? A. My view was that they were not allocated properly. Q. Okay. How were they allocated? A. 

Multiple design centers.”). 

1339 Chhabra Deposition, Marvell, p. 177. 

1340 Marvell’s financial quarter Q1 2016 ended on May 2, 2015 (Marvell, Form 10-Q, Q1 2016, p. 1). 

1341 Chhabra Deposition, Marvell, pp. 176–177 (“Q. And after considering operating expenses, the operating income 

for the first quarter of 2016 was negative $43 million. [...] Q. Is it your understanding that this negative 

operating income was driven by pricing pressure in the market? A. One of the reasons. Q. What were the 

other reasons? A. Could be unnecessarily [sic] R&D expense. Q. What sorts of activities did the R&D 

expenses cover? A. Building the chipsets, designing new chipsets, modem activities.”). 

1342 See, e.g., Chhabra Deposition, Marvell, pp. 34–35 (“Q. Do you see the next bullet reads, ‘Dual Mode Dual 

Standby Modem capability lagging behind across platforms’? A. Yes. Q. And did you believe that Marvell’s 

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not have its own RF transceivers or its own modem protocol software stack and had to source 

them from third parties.1343 Marvell also had to rely on external vendors for GPS technology, 

increasing the cost and size of its modem chips.1344 

449. In addition to chip development issues, Marvell struggled to deliver its modem chips in a timely 

manner. 

1345 Marvell’s late LTE development and inability to meet delivery

deadlines particularly damaged its relationship with BlackBerry. 

 

 

 dual mode dual standby capability was lagging behind its competitors? A. Yes. Q. And did you have a view as 

to why that was? A. Hearing from customers and market feedback from the requirements. Q. All right. So you 

were hearing market feedback and hearing from customers that dual mode dual standby was a feature that at 

least certain customers desired? A. Yes. Q. And do you know why Marvell was behind some of its competitors 

in developing that feature? A. Is what was available at that time and what the market need was, there could 

have been gap. There could be gap [...] between what’s available from Marvell at that time and what is coming 

[...] from the customer desire.”). See also “Dual-SIM - Definition,” GSM Arena (“[Dual-SIM] specifies 

whether a device is capable of supporting two SIM cards. The two major types of dual-SIM phones are active 

and standby. Dual-SIM Standby (DSS) requires the user to specify which of the two SIMs is able to make and 

receive calls, while Dual-SIM Active (DSA) enables both cards to receive calls at the same time. [...] More 

recent models feature Dual SIM Dual Standby (DSDS) technology which enables them to have two active SIMs 

with only one transceiver.”). 

1343 Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to Reconsider Its 

Baseband Position,” Strategy Analytics, November 2009, p. 11 (“Marvell did not inherited [sic] a complete 

modem protocol software stack from Intel and the company had to license it from TTPCom to port it to its PXA 

90x products. Competitor companies have in-house protocol stacks which disadvantages Marvell when 

competing in the cellular baseband market. [...] Marvell currently depends on third parties to source RF 

transceivers that work with its cellular basebands.”). 

1344 Chhabra Deposition, Marvell, pp. 36–38 (“Q. And did Marvell’s reliance on external vendors for GPS and NFC 

technology increase the cost of the overall chipset solution? A. Yes. [...] Q. [...] Did Marvell’s reliance on 

external vendors for GPS and NFC technology have implications for the overall printed circuit board size? A. 

Yes. Q. And what were those implications? A. More chips. Q. And did more chips then lead to a larger size? 

A. Larger printed board size. Q. And for some OEM customers, could that be undesirable? A. Possible.”). 

1345 

1346 See Exhibit V.C.14b. 

1347 See, e.g., 

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1350

450. Marvell continued to execute poorly as it entered the low-end and high-end LTE segments. In 

the low-end LTE segment, Marvell managed to secure design wins with Samsung. 1351 

However, Samsung did not purchase a large volume of Marvell’s modem chips; between 2014 

and 2015, only approximately 3 percent of Samsung’s LTE handsets contained Marvell’s 

 

1348 Grubbs Deposition, BlackBerry, pp. 110–112 (“Q. Why did BlackBerry stop purchasing BlackBerry baseband 

processors chips from Marvell? A. There were several reasons. We [...] were having some issues with [...] 

commitments to timelines for deliveries from Marvell. They had slipped on several deadlines that they had 

promised to deliver things to us by. They apparently -- or from what I -- what I understand were about two 

years behind on LTE development. [...] Q. And two years behind whom? A. Qualcomm.”). 

1349 See, e.g., Pimentel, Benjamin, “Marvell Shares Fall on Downgrade,” MarketWatch, August 26, 2008 

(“Benjamin said Marvell appears to have lost the design for Research In Motion’s Javelin to Freescale.”). See 

also “Further Explanation on Why We Are Waiting Sooo Long for BlackBerry 7 Smartphones to be Released,” 

CrackBerry, June 17, 2011 (“RIM was originally going to continue to use Marvell for at least one more 

generation of their top of the line GSM BlackBerry Smartphones [...]. But someone at somepoint in recent 

months must have woken up one morning and realized that 800MHz would be laughable in their top tier devices 

[...]. With Marvell’s offerings looking lackluster compared to Qualcomm’s, for RIM that meant a big 

undertaking relatively late in the commercialization cycle of these new devices as they would be abandoning 

Marvell for the new high-end phones.”); Exhibit V.C.14b. 

1350 Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to Reconsider Its 

Baseband Position,” Strategy Analytics, November 2009, p. 12 (“Marvell’s only significant baseband customer 

is Research in Motion (RIM) and the company hasn’t been able to expand to high volume vendors like Nokia 

and Samsung.”). 

1351 See, e.g., Chhabra Deposition, Marvell, p. 151 (“Q. Did Marvell have any chips that were intended for use in 

high-tier smartphones? A. Not when I was running the business. Q. What tier of smartphones were Marvell’s 

chips being incorporated into when you were running the business? A. I would say mid to low tier.”). See also 

“Samsung Launches New Global Mass Market Galaxy J1 LTE Smartphone Powered by Marvell’s IndustryLeading ARMADA Mobile PXA1908 Platform,” Marvell Press Release, March 2, 2015 (“[...T]he Marvell 

ARMADA Mobile PXA1908 platform and advanced Avastar 88W8777 wireless connectivity solution were 

selected by Samsung Mobile to power select models of its new global mass market LTE smartphone, the 

recently announced Samsung Galaxy J1 LTE smartphone.”); Rougeau, Michael, “Samsung is Officially Trying 

Out a New Letter with the Galaxy J1,” TechRadar, January 29, 2015 (“The J1 was rumored earlier in January 

[...]. Now the company has officially launched the handset, a low-end device [...].”). 

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chips.1352 Furthermore, among Chinese OEMs, Qualcomm’s modem chips became popular 

because they had “strong performance/function balance,” while Marvell’s chips had high 

component costs and limited technology support.1353 Marvell was also engaged in a price war 

with Spreadtrum, MediaTek, and Qualcomm, 1354 which partially caused Marvell’s gross 

product margins to decline.1355

451. In the high-end LTE segment, Marvell’s chips, such as the PXA1936, were deemed 

technologically inferior by the time they were released.1356

 

 

1352 See Strategy Analytics, “Customised Baseband Quarterly Market Share Tracker for Qualcomm: Parts 1 and 2,” 

April 6, 2018. 

1353 Lin, Eric, “Digitimes Research: Qualcomm Far Ahead of Marvell and MediaTek in China LTE Market,” 

DigiTimes, June 19, 2014 (“Qualcomm is currently pushing its Snapdragon 400 series as the mainstream 

platform for the LTE market and because of the series’ friendly pricing and strong performance/function 

balance, the platform has achieved high popularity in the market. [...] As for Marvell, the company released its 

LTE solutions at the same time as Qualcomm, but limited by its business scale and supporting personnel, 

Marvell has been unable to offer a technology support as competitive as Qualcomm’s, while component costs 

for its solutions are also higher. It has a lot less clients than Qualcomm. Despite the fact that Marvell and 

Qualcomm both released their LTE solutions at about the same time, Marvell’s LTE chip shipments have been a 

lot weaker than those of Qualcomm.”). 

1354 Chhabra Deposition, Marvell, p. 151 (“Q. Earlier, when you were testifying about a price war involving 

Marvell, MediaTek, Qualcomm, and Spreadtrum, was that a price war in the mid to low tier of LTE chips? [...] 

[A.] I would say so.”). 

1355 Chhabra Deposition, Marvell, p. 127 (“Q. I believe you stated earlier that you do recall that OEMs were starting 

to demand lower chipset prices at least from Marvell. Do I -- do I have that right? A. Yes. [...] Q. And was 

the primary reason why Marvell’s gross product margins were declining that the prices were declining? [...] 

[A.] I would say so, but at the same time, there’s a cost part of it, as well. Q. Sure. And at the time in 2015, 

when you were head of the mobile group, did you attribute the decline in Marvell’s gross product margins 

largely to a price decline as opposed to a cost increase? A. Yes.”). 

1356 Taylor, Chris, “Qualcomm Steps Up, Two More Chipset Suppliers Drop Out,” Strategy Analytics, September 

29, 2015 (“MediaTek, Samsung, Hisilicon (Huawei), Marvell and Intel offer or have announced integrated 

baseband-applications processors comparable to the Snapdragon 820, but many of these SoCs target 

smartphones below the premium tier, and none can support Cat. 12 DL and Cat. 13 UL. One example is 

Marvell’s PXA1936, which targeted the premium tier when it was announced almost a year ago. Now, this SoC 

looks dated compared to both the Snapdragon 810 and the new Snapdragon 820, with lower performance and 

fewer features.”). 

1357 

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 After facing challenges in both LTE segments, 

Marvell exited the modem chip industry. 

13. Nvidia 

a. Background 

452. Nvidia was founded in 1993 and throughout its history has focused on creating graphics 

technology.1359 Nvidia released its first AP designed for mobile devices under the “Tegra” 

family of processors in 2008.1360 Initially, Nvidia’s Tegra chips were used mostly in tablets,1361

with the first handsets to use the Tegra chip being the Microsoft Kin devices in 2010.1362

453. In 2011, Nvidia entered the cellular modem industry by acquiring Icera, along with its modem 

technology, for $367 million.1363 At the time of the acquisition, Icera has an established base

of OEM customers for 3G WCDMA chips.1364 The Icera deal was reportedly intended to 

enable Nvidia to integrate Icera’s technology into Nvidia’s existing AP solutions for tablets 

and some smartphones, while also combining its existing Tegra APs with outside suppliers’ 

 

1358 

. 

1359 “About Nvidia,” Nvidia, available at http://www.nvidia.com/page/corporate_timeline.html. 

1360 “About Nvidia,” Nvidia, available at http://www.nvidia.com/page/corporate_timeline.html. 

1361 “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 266 (“Tegra 2’s initial focus is on larger 7-10 

inch screen tablets [...]”). See also Cross, Jason, “Nvidia Unveils Tegra 2: Targets Android Tablets,” 

PCWorld, January 8, 2010 (“Nvidia is initially promoting tablets with this new design rather than smartphones 

[...].”). 

1362 Shah, Agam, “Microsoft’s Kin are the First Tegra Smartphones,” PC World, April 13, 2010 (“The first 

smartphones based on Nvidia’s low-power Tegra chips will soon be here, in the form of the new Kin devices 

announced by Microsoft earlier on Monday.”).. 

1363 “Nvidia Completes Acquisition of Icera, a Leader in Wireless-Modem, RF Technology,” Nvidia Press Release, 

June 13, 2011 (“Nvidia announced today that it has completed its $367 million cash acquisition of Icera [...]”). 

1364 “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 127 (“Icera (now part of NVIDIA) is the 

closest competitor to Qualcomm, and is well positioned to do the same with its field proven 3G HSPA+ 

[WCDMA]. [...] They have already established a large client base in HSPA+ and are quite well positioned as a 

platform supplier – both transceivers and baseband.”). 

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modems for high-end smartphones.1365 As part of this roadmap for integrated chips, Nvidia 

executives envisioned a three-tiered mobile device industry, with the tiers being 1) high-end 

smartphones, 2) mid-tier, or “mainstream,” phones, and 3) low-end, or “big volume” 

phones.1366 In 2013, Nvidia released its first LTE SoC called the “Tegra 4i.”1367 The Tegra 4i 

was released with phones in Latin America and Europe. 1368 This chip had multi-mode 

capabilities and was compatible with LTE, 3G, and 2G, although it was not equipped to provide 

CDMA service.1369 

454. By 2015, Nvidia decided to focus instead on other lines of business, including deep learning, 

virtual reality, and self-driving cars. Nvidia believed that although “having modem technology 

 

1365 Takahashi, Dean, “Nvidia Acquires Icera Mobile Wireless Chip Maker for $367M,” VentureBeat, May 9, 2011 

(“The deal will [...allow Nvidia to] integrate Icera’s technology into Nvidia’s own solution for tablets and 

smartphones.”). See also Talla Deposition, pp. 112-113 (“Q. Let’s break it up, then, and let’s talk first about 

premium phones. What were the factors that made it difficult to sell -- to be successful in the business of selling 

modems for the premium smartphone market? A. I think the premium smartphone market, Icera, we were not 

targeting our modem for the premium smartphone market [...]. So that -- Nvidia and Icera, we were never 

targeting the modem. We were targeting that space with our application processor, but trying to pair with a 

third-party modem.”). 

1366 Talla Deposition, Nvidia, p. 108 (“In what way did the market commoditize pretty quickly? A. [...] So what I 

meant by commoditize pretty quickly is, when we started the market, in around the 2012-13 time frame, we 

looked at the market as three different segments: One was high-end premium smartphone; the second, the 

middle, was a middle end or a mainstream, if you will, that will offer close to premium performance; and then 

at the very low end, you know, very big volume.”). See also Talla Deposition, Nvidia, p. 111 (“Q. And were 

the modems that Nvidia launched in the LTE space − would you have considered them high-end, in the highend tier? A. No. We considered them in the mainstream. So that was the whole premise of our investment: 

[...] we would target the mainstream by offering a high-end application processor performance, but bring that to 

the mainstream with a mainstream modem.”). 

1367 See, e.g., “Nvidia Introduces Its First Integrated Tegra LTE Processor,” Nvidia Press Release, February 19, 

2013 (“Nvidia today introduced its first fully integrated 4G LTE mobile processor, the Nvidia Tegra 4i [...].”). 

See also “Cellular Handset & Chip Markets,” Forward Concepts, 2014, p. 72 (“Among the first announced 

usage of the T[egra]4i SP3X is the Xiaomi Mi-3 64GB Smartphone [...].”). 

1368 Talla Deposition, Nvidia, pp. 110–111 (“Q. And you mentioned that Nvidia was the only supplier besides 

Qualcomm to launch an LTE-compliant modem. Is that correct? A. No. [...] And we ended up actually being 

one of the first of the manufacture[r]s, in fact, to launch a successful phone in multiple geographies. So Latin 

America and Europe are the two examples I gave of the Tegra 4i. Both of those were launched in 2014.”). See 

also “Cellular Handset & Chip Markets,” Forward Concepts, 2014, p. 72 (“In February 2014, Nvidia announced 

a cellphone “socket” for its Tegra 4i LTE comprocessor at Wiko Mobile, said to be France’s fastest growing 

local phone maker. [...] LG has announced that they are using the Tegra 4i in their new G2 Mini smartphone in 

South America.”). 

1369 See, e.g., Cooper, Sean, “Nvidia Tegra 4i Software Update Adds LTE-Advanced Speeds,” Engadget, May 21, 

2013 (“Tegra 4i’s modem is also multi-mode. It delivers 4G LTE Advanced and is backward compatible so it 

can offer LTE Cat 3, 3G, and 2G.”). See also Segan, Sascha, “Nvidia’s Tegra 4i: Four Cores, No Contract,” 

PCMag, February 19, 2013 (“There’s no CDMA, though, which means Tegra 4i might not fuel phones on 

Sprint’s and Verizon’s networks [...].”). 

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for a platform company [was] an advantage,” given the company’s strengths in other areas, it 

could get a higher return on investment in other industries.1370 Therefore, the company shut 

down its modem business.1371 Nvidia continues to produce successful Tegra APs,1372 and it 

recently announced record quarterly revenues of $3.21 billion, driven by its leadership in GPU 

technology, including in mobile platforms.1373

b. Analysis 

455. Despite Nvidia’s strong performance in APs, its brief history in the cellular modem industry 

exhibited poor foresight, limited investment, but reasonable execution in the modems it did 

produce. These factors limited the success of its modem chips. When Nvidia entered the 

industry in 2011, the company planned to focus its modem efforts on the “mainstream” phone 

segment.1374 This plan eventually led to Nvidia’s decision to exit the modem industry, as it 

 

1370 NVIDIA-00608755–8758 at 8757, email from Deepu Talla, Nvidia, May 14, 2015 (“We felt (and still feel) that 

having modem technology for a platform company is an advantage. However, we had to wind down as we have 

higher ROI elsewhere and we need to grow in deep learning, virtual reality, and self-driving cars.”). 

1371 “Nvidia to Wind Down Icera Modem Operations,” Nvidia Press Release, May 5, 2015 (“Nvidia today 

announced that it will wind down its Icera modem operations in the second quarter of fiscal 2016. The company 

is open to a sale of the technology or operations. [...] Going forward, the company expects to partner with thirdparty modem suppliers and will no longer develop its own.”). 

1372 See, e.g., Niu, Evan, “Appreciating Nvidia Corporation’s Stunning Tegra Recovery,” The Motley Fool, 

November 12, 2016, (“Last quarter, Tegra sales soared 87% to $241 million, driven by both gaming 

development platforms and momentum in automotive.”). See also Talla Deposition, Nvidia, pp. 60–61 (“Q. 

And can you tell me again what the product name for Erista ended up being? A. TX1. Q. And is that still on 

the market? A. It is certainly on the market. [...] It is in -- if you are familiar with the Nintendo Switch game 

console, it includes the Tegra X1. The Shield Android TV includes the Tegra X1. There’s plenty of video 

analytics devices all over the world that’s doing autonomous machines. TX1, and also a lot of robots. Plenty of 

customer interactions for that device.”). 

1373 “Nvidia Announces Financial Results for First Quarter Fiscal 2019,” Thursday, May 10, 2018 (“N[vidia] today 

reported record revenue for the first quarter ended April 29, 2018, of $3.21 billion, up 66 percent from $1.94 

billion a year earlier, and up 10 percent from $2.91 billion in the previous quarter. [...] ‘We had a strong 

quarter with growth across every platform,’ said Jensen Huang, founder and chief executive officer of N[vidia]. 

[...] ‘At the heart of our opportunity is the incredible growth of computing demand of AI, just as traditional 

computing has slowed. The GPU computing approach we have pioneered is ideal for filling this vacuum. And 

our invention of the Tensor Core GPU has further enhanced our strong position to power the AI era,’ he said. 

[...] New Platforms[:] [...] Announced that Arm will integrate the open-source N[vidia] Deep Learning 

Accelerator to bring AI inference to mobile, consumer electronics and Internet of Things devices.”). 

1374 Talla Deposition, Nvidia, p. 111 (“Q. And were the modems that Nvidia launched in the LTE space − would 

you have considered them high-end, in the high-end tier? A. No. We considered them in the mainstream. So 

that was the whole premise of our investment: [...] we would target the mainstream by offering a high-end 

application processor performance, but bring that to the mainstream with a mainstream modem.”). 

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later assessed the “mainstream” phone segment as not sizable enough compared to the highend and volume segments. Nvidia’s firm-wide investment while in the modem industry was 

lower than its competitors in absolute terms but similar in percentage of revenue. In execution, 

Nvidia was able to successfully produce integrated chips, but these chips were lacking 

compared to those of Nvidia’s competitors in such features as CDMA and LTE Category. 

456. Foresight: Nvidia’s late entrance and subsequent exit from the modem chip industry were 

largely due to a view of the industry that did not materialize. Nvidia used its existing APs to 

pair with other suppliers’ modems for supplying high-end smartphones once Nvidia entered 

the mobile industry.1375 Nvidia then assessed that “visual computing graphics and Nvidia core 

competencies [would] be an important technology for smartphone mobile computing,” which 

led to its purchase of Icera.1376

457. Following its entrance into the modem chip industry, Nvidia poorly aligned its modem chip 

strategy with the demands of the smartphone industry. Given Nvidia’s strengths in producing 

APs, the company chose to target what it felt would be mainstream devices by providing SoCs 

with high-performing APs and mid-tier modems.1377 However, Nvidia later assessed that the 

cellular industry changed following the rapid advancement of LTE technology, such that by 

2015 OEMs instead prioritized either “high-end” or “volume” devices, as opposed to “midtier” devices .1378 

 

1375 Talla Deposition, Nvidia, p. 56 (“Q. So your strategy was to use your modem for what you call mainstream 

phones and then pair your AP with somebody else’s modem for the -- for the -- what you called high-end 

phones. A. Correct.”). 

1376 Talla Deposition, p. 107 (“Q. [...] What did you mean by your assessment that Nvidia acquired Icera for 

phones? A. [...] We felt like visual computing graphics and Nvidia core competencies will be an important 

technology for smartphone mobile computing, and that’s when we decided to make the investment into it. [...] 

So that’s the reason why we acquired Icera, because we thought long before, as we made the investment into 

this whole space, that we needed a modem strategy as well.”). 

1377 Talla Deposition, p. 111 (“Q. And were the modems that Nvidia launched in the LTE space [...] in the high-end 

tier? A. No. We considered them in the mainstream. So that was the whole premise of the investment: that we 

cannot -- you know, we would target the mainstream by offering a high-end application processor performance, 

but bring that to the mainstream with a mainstream modem.”). 

1378 Talla Deposition pp. 108–109 (“A. [...] when we started the market, in around the 2012-13 time frame, we 

looked at the market as three different segments: One was high-end premium smartphone, the second, the 

middle, was a middle end or a mainstream, if you will, that will offer close to premium performance; and then 

at the very low end, you know, very big volume. [...] But what we found is, by 2015 time frame, the market, 

instead of having all those different tiers, quickly consolidated to the premium and the volume tier.”). 

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458. Additionally, Nvidia planned to supply mainstream phones with chips that did not have CDMA 

capabilities and then pair its AP with a CDMA-capable modem for high-end devices.1379 As 

discussed above, these non-integrated solutions tended to be less popular than SoCs, for 

technical and economic reasons.1380

459. Investment: Nvidia’s investment in the modem industry came largely through the acquisition 

of Icera in 2011. As seen in Exhibits III.E.2–3, Nvidia’s firm-wide investment was generally 

lower than its industry competitors in absolute terms but comparable as a percentage of revenue. 

Nvidia’s investments likely prioritized its other core competencies over its modems.1381 By 

early 2015, Nvidia divested from modem technology.1382

460. Execution: In developing competitive integrated chips internally, Nvidia’s execution in the 

modem industry had limited success. For high-end devices, Nvidia only produced APs and 

used outside suppliers’ modems to sell two-chip solutions to mobile device OEMs. Following 

the purchase of Icera, Nvidia planned to integrate Icera’s existing LTE designs into its own 

integrated chip for mainstream devices.1383

461. As Nvidia developed its integrated Tegra modem chip, outside analysts expressed doubts as to 

the effectiveness of Nvidia’s Tegra SoC compared to competitors.

1384 By the time it was ready 

 

1379 Talla Deposition, p. 55–56 (“A. [...] And the very high end of the market, you need the -- you know, on the 

high end of the market, you need CDMA; you need other features that our modem was -- the roadmap in that 

time frame was not supporting it. [...] Q. So your strategy was to use your modem for what you call mainstream 

phones and then pair your AP with somebody else’s modem for the [...] high-end phones. A. Correct.”). 

1380 See Section III.E.1.c.i. 

1381 For instance, Nvidia continued to produce its Tegra APs after it stopped making cellular modems. Niu, Evan, 

“Appreciating Nvidia Corporation’s Stunning Tegra Recovery,” The Motley Fool, November 12, 2016 (“Last 

Quarter [2016 Q3], Tegra sales soared 87% [...].”). 

1382 NVIDIA-00608755−8758 at 8757, email from Deepu Talla, Nvidia, May 14, 2015 (“We felt (and still feel) that 

having modem technology for a platform company is an advantage. However, we had to wind down as we have 

higher ROI elsewhere and we need to grow in deep learning, virtual reality, and self-driving cars.”). 

1383 Talla Deposition, pp. 112–113 (“Q. Let’s break it up, then, and let’s talk first about premium phones. What 

were the factors that made it difficult to sell -- to be successful in the business of selling modems for the 

premium smartphone market? A. I think the premium smartphone market, Icera, we were not targeting our 

modem for the premium smartphone market [...]. So that -- Nvidia and Icera, we were never targeting the 

modem. We were targeting that space with our application processor, but trying to pair with a third-party 

modem.”). 

1384 “Equity Research: Nvidia Corporation,” Wells Fargo Securities, July 31, 2013 (“We continue to have doubts as 

to Tegra’s ability to grow in the smartphone space in the long run, with Nvidia trying to use its Icera soft 

modem technology to compete against entrenched companies that have well established traditional baseband 

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for release, the Tegra 4i had limited modem capabilities: the Tegra 4i only supported LTE 

Category 3 and Category 4,1385 whereas Qualcomm had by that time released a chip supporting 

Category 6.1386 Moreover, Nvidia faced challenges during development related to the poor 

power consumption of its modem chips.1387 Shortly following the release of the Tegra 4i, 

Nvidia had no design wins for mobile devices for future chips.1388 Although there were plans 

for a follow-up SoC for the Tegra 4i, which was codenamed “Raven,” Nvidia canceled this 

modem chip while it was still in development.1389 Similarly, Nvidia finished the design for a 

thin modem (the i600), but it was unable to successfully get this product to market prior to its 

decision to divest from the modem industry.1390

D. Conclusion 

462. As can be seen from my analysis of modem chip supplier performance, industry participants 

that attempt to supply modem chips have experienced a wide variety of outcomes. While some 

have flourished and are expected to continue to do so in the near future, others have struggled 

to develop or sell products. Still others have succeeded for a period but then lost their 

 products such as Qualcomm, Intel (the acquired Infineon division) and Mediatek.”). See also Zafar, Ramish, 

“Future of Tegra 4i Looks Uncertain - Could be Nvidia’s First and Last Effort for Mainstream Phones,” WCCF 

Tech, March 28, 2014 (“With complications present in manufacturing a successor [...], Nvidia is faced with 

very limited options. Therefore it seems highly unlikely that a successor for the 4i will be introduce[d] [...].”). 

1385 “Introducing Nvidia Tegra 4, The World’s Fastest Mobile Processor,” Nvidia (“[Tegra 4i LTE] Cat3/Cat 4+CA 

100-150.”). 

1386 See, e.g., “Qualcomm Powers World’s First Commercial LTE Advanced Category 6 Smartphone,” Qualcomm 

Press Release, June 18, 2014 (“Qualcomm Technologies, Inc. [...] today announced that the Qualcomm 

Snapdragon 805 processor and Qualcomm Gobi 9x35 modem are powering the Samsung Galaxy S5 [...], the 

world’s first commercially available LT Advanced Cat 6 smartphone.”). 

1387 NVIDIA-00609140–9141, email from Rick Dingle, Nvidia, July 19, 2013 (“Power[:] We are still not in great 

shape on power, or I should say we are not really at what we can achieve with the current platform[.] [...] This 

is a blocker to adoption until this is good enough[.]”). 

1388 Niu, Evan, “Nvidia Corporation Tries Again,” The Motley Fool, July 22, 2014 (“The newest Tegra K1 chips 

that were announced at CES earlier this year has exactly zero design wins in phones that investors know of, and 

losing a spot at one of the world’s fastest growing smartphone makers doesn’t exactly inspire confidence.”). 

1389 Talla Deposition, p. 26 (“Q. Okay, and there was a product called Raven? A. There was a product on the 

roadmap called Raven, yes, but eventually we decided not to do it. Q. And what was Raven? A. Raven was the 

follow-on to Tegra 4i. Q. So it would be an integrated -- A. Integrated, right.”). 

1390 Talla Deposition, p. 92 (“Q. And then you said the next priority was you canceled the Raven modem and kind 

of replaced it with a data-only i600 modem. A. Correct. Thin -- i600 modem data first, but a thin modem. Q. 

And did that i600 ever launch? A. Once we decided to divest in 2015, we, obviously, canceled that effort.”). 

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competitive edge due to failures of foresight, investment, and/or execution. These results align 

with what I would expect to see based on the Industry Factors Hypothesis, and because support 

for Plaintiff’s Hypothesis would require observing outcomes inconsistent with the Industry 

Factors Hypothesis, they therefore provide evidence contrary to Plaintiff’s Hypothesis. 

463. The process of foresight, investment, and execution does not happen linearly or for one product 

at a time. Even as a modem chip supplier continues to refine and improve its offerings for one 

particular generation of modem chips, it must simultaneously prepare for the next generation 

of standards and technology if it is to remain successful in the industry over long periods of 

time. Firms must invest efficiently, particularly when preparing to incorporate new standards, 

releases within those standards, or major technologies into their chips. As can be seen by 

examining the outcomes of modem chip suppliers, companies have accomplished this with 

differing degrees of success. For example, while Intel had difficulty selling its 3G products, it 

has found success recently in 4G LTE; Broadcom, on the other hand, successfully sold 3G 

products but ultimately stopped producing modem chips when it was unable to create viable 

4G LTE products. As shown through both industry-level analyses in Sections III and IV and 

the assessment of individual firms in this section, the highly dynamic nature of the industry 

continuously creates new opportunities for firms while simultaneously putting pressure on 

existing participants to continue innovating. 

464. I have concluded that industry factors explain the successes and failures and the related entry 

and exit decisions of firms, contrary to Plaintiff’s Hypothesis, which posits that Qualcomm’s 

alleged exclusionary conduct drove such outcomes. Below, I summarize the evidence for this 

conclusion arising from the application of my analytic framework to the firms in the industry, 

and then present Exhibit V.D.1 with a summary of results by supplier.1391

465. Foresight: Firms must exercise foresight across a wide range of decision points to anticipate 

features demanded by OEMs and downstream customers. For example, firms must decide how 

to invest in improving current products (e.g., by further integrating chips or providing 

backward compatibility); what future standards to begin developing (e.g., LTE versus 

WiMAX); what customers to attempt to sell to (e.g., OEMs participating in emerging markets 

 

1391 For additional information regarding points summarized in this section, see my analysis and sources in Section 

V.C. 

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and/or those targeting high-end downstream customers); and what product characteristics will 

be most important to these customers (e.g., low-cost turnkey solutions and/or thin modems). 

466. Based on a supplier’s expectations of the future, it will develop one or multiple products that 

it believes has the capability of generating sales and ultimately profit. A firm with incorrect 

foresight will fail to sell sufficient products based on those decisions, while a firm with 

successful foresight will be well positioned to sell products if it can invest efficiently and 

execute on its plans. Across the set of decisions that firms make, those without sufficient 

foresight will lose sales and, over time, may exit the industry completely. Examples of such 

failures in foresight include the following: 

a.

. 

b. Although TI’s early modem chip activities enabled it to be one of the largest modem 

chip suppliers for much of the 2000s, it did not remain successful. TI’s reliance on 

its customers to provide modem chip software proved troublesome when the 

industry transitioned to 3G, as potential customers decided to purchase modem 

chips from other suppliers that were able to provide both software and hardware 

components. Additionally, TI failed to foresee the threat from low-cost competitors 

such as MediaTek, Spreadtrum, and Infineon, and it was undercut on price for 2G 

modem chips. 

c. Foresight errors precipitated ST-Ericsson’s exit. For example, ST-Ericsson lacked 

foresight by failing to diversify its customer base. As a result, when Nokia migrated 

its phones to the Windows operating system, which ST-Ericsson’s SoC did not 

support, ST-Ericsson faced a substantial drop-off in demand. Additionally, after 

the split of ST-Ericsson in 2013, Ericsson focused on developing thin modems at a 

time when demand for such products was shrinking, and Ericsson achieved few 

design wins before exiting the industry itself. 

d. Broadcom exercised poor foresight in setting its priorities for investing in 2G, 3G, 

and 4G technologies. For example, while Broadcom continued to invest in 2G and 

3G technologies, it did not focus on producing 4G modem chips until 2010, when 

it acquired Beceem. However, Broadcom did not start shipping LTE modem chips 

until 2014, after it had also acquired Renesas to accelerate its LTE modem chip 

development. This delay was potentially related to Broadcom’s decision not to retask Beceem to focus on LTE until 2011, having allowed it to split its expertise 

between WiMAX and LTE prior to that. 

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e. Nvidia erred by attempting to provide products that were not demanded. For 

example, it created SoCs by combining its high-performance AP with midperformance modem chips for use in mid-tier phones. However, after the 

advancement of LTE technology, Nvidia reassessed that mid-tier phones were no 

longer a viable segment of the industry. Additionally, Nvidia planned to pair its 

AP with a CDMA-capable modem for high-end devices, but these non-integrated 

solutions tended to be less popular than SoCs. 

467. Investment: The experiences of different firms show that R&D investment alone is not 

sufficient for a firm to succeed; rather, a modem chip supplier must allocate its investments 

efficiently. Firms have chosen to invest either by internal R&D efforts or by coupling these 

efforts with the targeted acquisition of firms that have previously developed modem chips or 

related technology. Lack of efficient and targeted investment, or an inability to combine 

acquired technology and once-external R&D efforts with its internal R&D efforts, may prevent 

a supplier from successfully creating desirable modem chip products. 

468. My analyses demonstrate that modem chip suppliers have developed individualized strategies 

for investment and innovation as they compete with one another for sales, but in some cases 

have invested inefficiently and failed to capitalize as a result. For example: 

a.

. 

b.

 

ST-Ericsson split apart in 2013. 

c. While Broadcom used a fast-follower strategy and invested successfully in GSM 

and WCDMA through its acquisitions of assets from Mobilink and of Zyray 

Wireless, its LTE acquisitions were unsuccessful despite acquiring both Beceem 

and Renesas Mobile, as Apple found its modem chips inferior to other options. 

469. Importantly, as these examples illustrate, substantial investment is not sufficient in itself to 

ensure success in the modem chip industry. In particular, Intel’s often-low R&D efficiency – 

i.e., poor productivity in terms of converting investment to development of products in high 

demand – resulted in limited success at times despite substantial investment. In addition, good 

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foresight is needed to ensure investment is well directed, and strong execution is necessary to 

bring a product to market quickly and with demanded product characteristics. 

470. Execution: Finally, investment and foresight cannot make up for poor execution. To execute 

successfully, a modem chip supplier must deliver products on time and with functionality 

desired by the customers that the firm is targeting. Satisfactory execution in only one year is 

insufficient; the firm must continue to deliver new products year after year, each with 

incremental improvements relative to competitors and relative to what the firm has previously 

offered. Firms that are delayed in delivering products can easily be surpassed by competitors 

that keep up with rapidly evolving technology. Additionally, considerable advantage comes 

from being the first competitor to market with products that have a given set of demanded 

features. 

471. Examples of the importance of execution include the following: 

a. Marvell lost its primary customer, Blackberry, after falling behind on LTE 

development and consistently missing development deadlines more broadly. 

Moreover, Marvell relied on third parties for GPS technology that increased the 

cost and size of its modem chips, and its modem chips were considered at a 

disadvantage with respect to power consumption. Following failures of execution, 

Marvell exited in 2015. 

b. TI fell behind in developing 3G chips following, among other problems, delayed 

transceiver development and difficulties integrating various multimedia 

capabilities. TI began phasing out its modem chip business in 2008 and exited the 

modem chip industry altogether in 2012. 

c. Following the development of successful products through 2005, Freescale 

stuggled to master its own 3G software and was not able to keep pace with other 

WCDMA chip suppliers. Freescale announced its exit from the modem chip 

industry in 2008 and ceased legacy sales in 2013. 

d. Other chip suppliers also struggled to offer advanced features on the timelines 

demanded by OEMs. 

 

. 

472. Because a firm’s success can be limited by poor foresight, poor investment, or poor execution 

in isolation, as demonstrated by my analysis and the specific examples above, success requires 

performance on all dimensions. Examples of modem chip suppliers that have achieved such 

performance, and that have earned success as a result, include the following: 

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a.

b. As Spreadtrum entered the modem chip industry, it focused on providing low-cost 

turnkey solutions to enable the growth of low-cost OEMs. It used acquisitions and 

strategic R&D investments to focus effectively on providing low cost technology. 

Spreadtrum’s modem chip sales have grown substantially, from just under 115 

million units in 2010 to over 460 million in 2017. 

c.

 

d. Samsung has strategically leveraged its fabrication capabilities in its modem chip 

manufacturing and has a long history of extensive R&D into all parts of the mobile 

device supply chain. Samsung S-LSI’s LTE modem chips have improved 

considerably over the past few years, to the point where certain of its SoCs have 

been deemed as good as Qualcomm’s. As a result, Samsung has substantially 

shifted its modem chip sourcing from external suppliers such as Qualcomm to its 

internal self-supply: 

. 

e.

 More 

recently, Intel was selected to be the primary and potentially exclusive supplier of 

modem chips for Apple’s iPhone. 

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473. Of note, these firms have succeeded irrespective of not having an exhaustive component-level 

patent license from Qualcomm.1392 Therefore, their success contraindicates a key component 

of Plaintiff’s Hypothesis – that modem chip suppliers cannot compete effectively without an 

exhaustive license to Qualcomm’s cellular SEPs. Instead, their success has derived from their 

ability to consistently exercise foresight, appropriately target their investments to their chosen 

strategies, and execute well in developing chips with desirable characteristics, integrating 

additional features, and otherwise striving to meet OEMs’ requirements. 

474. The industry factors I have emphasized throughout, when taken together, explain the success, 

failure, exit, and entry seen within the modem chip industry. Exhibit V.D.1 summarizes the 

insights gained from my analysis of individual modem chip suppliers. Put simply, when firms 

have demonstrated poor foresight, investment, and/or execution, they have had limited success, 

while firms that have consistently demonstrated strong foresight, efficient and targeted 

investment, and effective execution have succeeded. This body of evidence is inconsistent 

with Plaintiff’s Hypothesis and strongly supports the Industry Factors Hypothesis. 

VI. ANALYSIS OF INDUSTRY PERFORMANCE 

475. Plaintiff’s Hypothesis predicts that Qualcomm’s alleged exclusionary conduct has inhibited 

competition and driven modem chip suppliers out of the industry, which I would expect to lead 

to poor performance in the modem chip industry overall. In this section, I directly examine 

the performance of the modem chip and mobile device industries and evaluate whether there 

is evidence of any such impaired performance. 

 

1392 Qualcomm Incorporated’s Objections and Supplemental Responses to Apple Inc.’s Special Interrogatory Nos. 

9, 12, 13 and 15 and Interrogatory Nos. 19, 20 and 31, March 10, 2018, pp. 14–37

 As discussed above, 

MediaTek was successful prior to, during, and after this agreement. 

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476. Performance in this context refers to the ability of the industry to efficiently deliver value to 

consumers. Key measures of performance include the pace of innovation, quality-adjusted 

prices, and overall benefits to consumers. I address each of these in turn, and I show that the 

industry has exhibited impressive performance on each dimension, which is inconsistent with 

Plaintiff’s Hypothesis. 

A. Pace of innovation 

477. In this subsection, I document the rapid pace of innovation observed in the modem chip 

industry with two groups of metrics: investments of modem chip designers in innovation, as 

measured by their R&D spending; and the resulting improvements in modem chip quality and 

efficiency. 

478. As discussed above and shown in Exhibit III.E.3, the pace of innovation in the modem chip 

industry is well documented by the intensity of R&D. Firms in the modem chip industry have 

been consistently investing around 23 percent of their revenues into R&D, second only to the 

biotechnology industry (27 percent) but more than other innovative industries such as 

pharmaceuticals (14 percent).1393

479. The continued R&D investment in innovation of modem chips has been translated into 

impressive improvements in the performance of mobile devices used by end consumers. Some 

of the most important and valued features of devices can be directly traced to improvements in 

modem chip performance, including the data transmission speed, power consumption, and 

size.1394 Specifically, technological innovations in increasing downlink and uplink speeds 

have allowed mobile devices to perform the basic voice and data functions (e.g., email) of 

mobile phones faster and more efficiently than before. They have also enabled the newer and 

more data intensive functionalities that consumers demand, including for example multimedia 

 

1393 See, e.g., Bezerra, Julio et al., “The Mobile Revolution,” BCG, January 2015, pp. 27–29 and Exhibit 14 at p. 29. 

1394 For example, according to Will Strauss, founder and president of Forward Concepts, a market research 

publisher focusing on digital signal processing: “Without modems, smartphones would be little more than 

personal information managers or personal digital assistants (PDAs). [...] Smartphones consist of two main 

components: Modems and application processors. [...A]pplication processors with 4, 6, 8 or even 10 CPUs 

become irrelevant if the  ̔on-the-air ̓ performance is hindered by poor LTE modems.” Strauss, Will, “How LTE 

Modems Make or Break a Smartphone,” EE Times, December 16, 2015. 

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sharing, audio and video streaming, and video conferencing. 1395 Reductions in size and 

improvements in the power efficiency of modem chips resulted in smaller devices with longer 

battery life and available talk time. 

480. Furthermore, improvements in modem chip technologies prodded the development of 

innovative functionalities enabled by the high-bandwidth mobile data communication. Before 

modem chips allowed access to high-bandwidth mobile data communication, consumers were 

limited to the computing ability and storage that the device OEM initially included in a mobile 

device, or the data downloaded through a stationary network. Accessing a reliable highbandwidth connection through an advanced modem chip gave consumers access to more 

powerful computing and storage capability. The list of innovations enabled by advancements 

in modem chips is long and varied. For example, while speech recognition remains a 

computationally intensive task, mobile devices are able to offload more difficult recognition 

tasks to a large remote server because they have the mobile bandwidth to do that quickly.1396 

Similarly, storage may be offloaded to remote servers, alleviating concerns about running out 

of storage when away from home. For instance, pictures taken on vacation can transparently 

be uploaded to the cloud via the cellular network.1397 MLB Advanced Media allows fans to 

watch baseball games while riding a train or waiting on a bench.

1398 Google Maps and Waze 

use cellular data to keep a driver’s route constantly updated, accommodating traffic and 

detours.1399

 

1395 See, e.g., SFT-17749084 at p. 16 (showing that the exponential growth in data transmission was accompanied 

by the introduction of multimedia, streaming, and video conferencing). 

1396 See, e.g., Nusca, Andrew, “How Voice Recognition Will Change the World,” ZDNet, November 4, 2011. 

1397 See, e.g., “Apple Introduces iCloud,” Apple, June 6, 2011, available at 

https://www.apple.com/newsroom/2011/06/06Apple-Introduces-iCloud/ (“iCloud’s innovative Photo Stream 

service automatically uploads the photos you take or import on any of your devices and wirelessly pushes them 

to all your devices and computers. So you can use your iPhone to take a dozen photos of your friends during 

the afternoon baseball game, and they will be ready to share with the entire group on your iPad (or even Apple 

TV®) when you return home.”). 

1398 Hoffert, John, “How MLB Advanced Media Is Taking a More Tech-Focused Business Approach,” SportTechie, 

available at https://www.sporttechie.com/how-mlb-advanced-media-is-taking-a-more-tech-focused-businessapproach/. 

1399 “Waze” homepage, available at https://www.waze.com/. 

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481. These functionalities depend crucially on the data transmission speed associated with modem 

chips. Exhibit VI.A.1 shows that the maximum downlink speed among all 3G-compatible 

devices available at a given time has increased from 3.6 Mbps in Q4 2007 to 100 Mbps in Q1 

2013, while the maximum uplink speed has increased from 0.38 Mbps in Q4 2007 to 50 Mbps 

in Q1 2013. Among 4G-compatible devices, the maximum downlink speed has increased from 

150 Mbps in Q1 2013 to 1,024 Mbps in Q2 2017, while the maximum uplink speed has 

increased from 50 Mbps in Q1 2013 to 150 Mbps in Q2 2017. These improvements in speed 

would allow, for example, for a two-hour HD movie that took over three hours to download 

on a 3G-compatible device in 2007 to be downloaded on a 4G-compatible device in 39 seconds 

in 2017, on a cellular network able to provide data at the maximum available speed.1400 

482. The downlink and uplink speeds described above and shown in Exhibit VI.A.1 are the 

theoretical maximum speeds, which represent the total capacity available to the set of 

connected devices in a particular sector of a base station.1401 These theoretical speeds are often 

much faster than the speeds that are experienced by subscribers in practice, because they do 

not adjust for factors such as the distance of the device from the base station, network traffic, 

and even the weather.1402 However, actual average speeds that are experienced by consumers 

have also grown rapidly. Exhibits VI.A.2 and VI.A.3 show the average connection speed and 

average peak connection speed over time for a few selected countries from 2010 to 2017.1403 

For example, in the U.S., the average connection speed increased from less than 1 Mbps in Q1 

2010 to 6.7 Mbps in Q2 2016 and to 10.7 Mbps in Q1 2017, and the peak connection speed 

increased from less than 2.5 Mbps in Q1 2010 to 33 Mbps in Q2 2016. The exhibits show not 

 

1400 A two-hour HD movie is approximately 5GB (or 40,000 Mb) of data, which can be download in 11,111 seconds 

or 185 minutes on a 3.6 Mbps connection and in 39 seconds on a 1,024 Mbps connection. See, e.g., “Internet 

Data Calculator,” AT&T, available at https://www.att.com/esupport/data-calculator/index.jsp (showing that two 

hours of streaming high-definition video corresponds to 5GB of data usage). 

1401 See, e.g., “Realistic LTE Performance: From Peak Rate to Subscriber Experience,” Motorola White Paper, 

2009, p. 4, available at https://www.apwpt.org/downloads/realistic_lte_experience_wp_motorola_aug2009.pdf. 

1402 See, e.g., Segan, Sascha, “Theoretical 4G Speeds Aren’t Real Speeds,” PCMag, December 3, 2010. 

1403 According to Akamai, “the ‘average peak connection speed’ metric represents an average of the maximum 

measured connection speeds. [...] The average is used in order to mitigate the impact of unrepresentative 

maximum measured connection speeds. In contrast to the average measured connection speed, the average peak 

connection speed metric is more representative of what many end-user Internet connections are capable of.” 

See, e.g., Akamai, “The State of the Internet, 4th Quarter, 2010 Report,” p. 31. 

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only overall growth in speeds but also variation within and across countries. As an example, 

the peak mobile speeds for the four U.S. mobile network carriers ranged from 8.8 Mbps to 27.7 

Mbps in Q4 2013. The average peak connection speed in Brazil was 22 Mbps in Q1 2016, 

while the peak average connection speed in Germany reached over 170 Mbps in the same 

quarter. 

483. Examination of wireless data traffic reveals that not only were these improvements in speed 

rapidly evolving, they were also highly demanded by consumers. In particular, the volume of 

mobile data traffic in the U.S. has increased in recent years, growing by a factor of 35 from 

2010 to 2016, when it reached 13.7 EB.1404 The total wireless data consumed in the U.S. in 

2016 is equivalent, for example, to streaming HD video for nearly 1.6 million years.1405 

Exhibit VI.A.4 shows that average data traffic per device has continued to increase at a rapid 

pace, and Exhibit VI.A.5 shows that global mobile data traffic has increased to over 100 EB 

per year, growing by a factor of 14 from 2011 to 2016. These results indicate that the output 

of the modem chip and mobile device industries has been expanding at a remarkable rate. 

484. Improvements in integrated AP functionality have also contributed to the innovative mobile 

devices functionalities described above. For example, increasing AP speed and the number of 

CPU cores allow for faster and smoother mobile device performance.1406 Exhibit VI.A.6 

shows that between Q2 2012 and Q1 2017 the processor speed grew from 0.90 GHz to 1.27 

GHz for 3G mobile devices and from 1.42 GHz to 1.74 GHz for 4G mobile devices. Similarly, 

Exhibit VI.A.7 shows that the average number of CPU cores increased from 1.4 to 3.5 for 3G 

mobile devices and from 1.9 to 5.7 for 4G mobile devices. Given that 89 percent of mobile 

devices sold in Q2 2012 supported 3G as their highest standard, while in Q1 2017 88 percent 

supported 4G as their highest standard, the processor speed of a typical device almost doubled 

 

1404 1 Exabyte = 1018 bytes or 1 trillion MB. 

1405 “Wireless Snapshot 2017,” CTIA, available at https://www.ctia.org/docs/default-source/default-documentlibrary/ctia-wireless-snapshot.pdf. 

1406 See, e.g., Naha, Abhi and Peter Whale, Essentials of Mobile Handset Design, Cambridge University Press, 

2012, pp. 111–113 (“By introducing a multi-core approach, it becomes possible to run two (or more) functions 

at the same time for a particular clock speed. So, in theory at least, it should be possible to double the 

performance of a chipset for the same power consumption by moving from a single- to a dual-core 

architecture.”). 

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and the average number of CPU cores in a typical device increased by more than a factor of 

four over this time period.1407

B. Price trends 

485. In this subsection, I examine the price trends in the modem chip and mobile device industries. 

Exhibit VI.B.1 shows that average selling prices of modem chips have declined considerably 

over time. While the prices of modem chips generally increase with each successive generation 

of wireless standards, the observed downward trends are similar for each new generation. The 

differences in prices across generations can be attributed to improving technology along 

various dimensions, including data transmission speeds, AP integration, and multi-mode 

functionality. 

486. The observed decline in prices is even more impressive after accounting for the fact that the 

average modem chip in, say, 2008 was very different from the average modem chip in 2012. 

Data collected by Forward Concepts show that, for example, from 2008 to 2012, the share of 

SoCs has grown from six to 33 percent of all modem chip units. In the same period, SoCs 

were significantly more expensive than thin modems: in 2012, the former cost, on average, 

more than four times the latter. Nonetheless, steep declines in the prices of both thin modems 

and SoCs still result in the average price declines depicted in Exhibit VI.B.1. Prices vary 

greatly even within thin modems and within SoCs, depending on the presence of multi-mode 

functionality. For example, between 2011 and 2013, LTE multi-mode thin modems were on 

average 149 percent more expensive than LTE single-mode thin modem chips. The average 

price of LTE modem chips has declined even as the share of multi-mode thin modem chips has 

continued to grow from 89 percent in 2011 to 92 percent in 2013.1408

487. A comparison of Exhibit VI.B.1 to Exhibits VI.A.1, VI.A.6, and VI.A.7 suggests that although 

prices of modem chips compatible with 4G standards were higher than those of chips 

compatible with 3G standards, their performance, measured by maximum transmission speed, 

AP speed, and the number of CPU cores, was higher as well. For example, in Q2 2012, the 

 

1407 See IDC, “IDC’s Worldwide Mobile Phone Tracker,” Q4 2017. 

1408 “Cellular Handset & Chip Markets,” Forward Concepts, 2013; “LTE Chip Market Trends,” Forward Concepts, 

2014. 

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prices of 4G modem chips were almost twice as high as those of 3G chips and eight times 

higher than those of 2G chips. At the same time, 4G modem chips allowed devices to 

download data more than twice as fast as 3G-compatible devices, and more than 32 times faster 

than 2G-compatible devices in terms of maximum downlink speed. The APs of 4G-compatible 

devices were also 57 percent faster than the APs of 3G-compatible devices and 182 percent 

faster than those of 2G-compatible devices, and 4G-compatible devices had on average 1.90 

CPU cores, whereas 3G- and 2G-compatible devices had 1.44 and 1 CPU cores, respectively. 

488. Further, the exhibits indicate that as modem chip prices declined over time, their performance 

along all these dimensions continued to increase rapidly. In particular, from Q1 2010 to Q2 

2017, 3G modem chips became 62 percent less expensive, while 3G-compatible handsets 

became almost ten times faster, in terms of maximum downlink speed. During the same time, 

their processor speed increased by 134 percent and the average number of CPU cores more 

than tripled. Similarly, between Q2 2012 and Q2 2017, prices of 4G modem chips declined 

by almost 50 percent, while the maximum downlink speed of 4G-compatible handsets 

increased more than tenfold, their processor speed increased by 24 percent, and the average 

number of CPU cores tripled. 

489. These observed modem chip price declines follow similar trends as those found in industry 

surveys for the cost of data. For example, a study by BCG found that as the maximum 

downlink speeds increased from 20 kbps for 2G technologies to 250 Mbps for 4G technologies 

and data volumes increased exponentially, the cost of network infrastructure per megabyte fell 

by 98 percent and the global average cost of mobile subscriptions per megabyte fell by 99 

percent between 2G and 4G technologies.1409

C. Consumer surplus 

490. Consumer surplus is a widely used measure of the impact that a good or a service has on 

consumers. Formally, consumer surplus generated by a product is defined as the difference 

between the amount that a consumer is willing to pay for the product and the product’s 

 

1409 Bezerra, Julio et al., “The Mobile Revolution,” BCG, January 2015, p. 9. 

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price.1410 As an example, suppose that the price of a smartphone is $700 and that a consumer 

values it at $1,000 or, in other words, a consumer would be willing to pay up to $1,000 for that 

smartphone. In this case, the consumer surplus generated by the sale of that smartphone to that 

consumer is $300. Total consumer surplus, or consumer surplus in brief, sums the impact of 

a product on all buyers, accounting for the fact that different consumers differ in the value they 

derive from that particular product. 

491. Measuring the overall impact of improvements in modem chips on consumers presents many 

challenges stemming from the complexity of the mobile internet ecosystem, which includes 

participants such as OEMs; providers of telecommunications network, infrastructure, and 

services; and operating system, software, and app developers. 1411 Technological 

improvements in modem chips have effects on many other parts of the ecosystem. In this 

subsection, I present some estimates of the consumer surplus attributable to mobile devices. 

While the total change in consumer surplus is due to advancements in different parts of the 

mobile technology, improvements in the modem chip technology explain a substantial part of 

this change. At the end of the subsection, I discuss academic literature that attempts to single 

out the contribution of particular features to the surplus generated by mobile handsets. 

492. An early analysis of the market for mobile devices, from the time of their introduction in the 

U.S. in 1983 to 1996, estimated that the gain in consumer welfare attributable to cellular 

technologies was between $24 billion and $50 billion per year.1412 After the introduction of 

2G wireless standards, this surplus was re-estimated to range from $53 billion to $111 billion 

per year.1413 In 2000, the Council of Economic Advisers used this estimate to argue that the 

 

1410 See, e.g., Marshall, Alfred, “Principle of Economics,” MacMillan, 8th edition, 1920, p. 103 (“The excess of the 

price which he would be willing to pay rather than go without the thing, over that which he actually does pay, is 

the economic measure of this surplus satisfaction. It may be called consumer’s surplus.”). 

1411 See, e.g., Bock, Wolfgang et al., “The Mobile Internet Economy in Europe,” BCG, December 10, 2014, Exhibit 

9. 

1412 Hausman, Jerry A., “Valuing the Effect of Regulation on New Services in Telecommunications,” Brookings 

Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Vol. 28 , 1997, pp. 22–23 

(“The gain in consumer welfare measured as the compensating variation is in the range of $24 billion to $50 

billion per year ...”). 

1413 Hausman, Jerry A., “Mobile Telephone,” in Cave, Martin E. et al., Handbook of Telecommunication 

Economics, Volume 1, Emerald Group Publishing Limited, 2002. 

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3G wireless technology would bring benefits of the same order to the U.S. economy.1414 

Studies focusing on South Korea have found that the consumer surplus from mobile 

communications grew from $72 million in 1996 to $8.8 billion in 2004,1415 and that by 2014 

the consumer surplus in South Korea had risen to roughly twice as much, at $18 billion per 

year.1416

493. Consumer surplus from mobile technologies has also been measured with surveys, which yield 

a self-reported measure of the dollar value attributed by consumers to their use of smartphones. 

This method differs from the way economists typically measure surplus, but the results are 

analogous, in that they consistently indicate that consumers have derived substantial benefits 

from mobile technology. For example, BCG estimated consumer surplus due to mobile 

internet (and the induced market for apps, services, and access) to be about $1 trillion per year 

in EU5 (France, Germany, Italy, Spain, and United Kingdom) alone,1417 and it found that data 

on the demographics of smartphone users suggest that this consumer surplus is bound to 

increase.1418 Another BCG study estimated the surplus created by different generations of 

mobile technologies and found that mobile technologies have created approximately $1.5 

trillion of annual consumer surplus in the U.S. and around $4.8 trillion combined in five other 

countries studied (Germany, South Korea, Brazil, China, and India).1419 The study further 

concluded that 3G and 4G capabilities contributed to approximately 65 percent of this overall 

consumer surplus.1420

 

1414 “The Economic Impact of Third-Generation Wireless Technology,” The Council of Economic Advisers, 2000, 

p. 1 (“The annual consumer benefit from today’s wireless telephone services is estimated at $53 $111 billion. 

The consumer benefits from 3G services will likely be of this order of magnitude.”). 

1415 Lee, Duk Hee and Dong Hee Lee, “Estimating Consumer Surplus in the Mobile Telecommunication Market: 

the Case of Korea,” Telecommunications Policy, Volume 30, issue 10-11, 2006, Table 3. 

1416 Lee, Stephanie, “Quantifying the Benefits of Smartphone Adoption: Digital Device Substitution and Digital 

Consumption Expansion,” 2017, available at https://ssrn.com/abstract=3014995. 

1417 Bock, Wolfgang et al., “The Mobile Internet Economy in Europe,” BCG, December 10, 2014. 

1418 Bock, Wolfgang et al., “The Mobile Internet Economy in Europe,” BCG, December 10, 2014 (“Consumer 

surplus and the other benefits of the mobile Internet are only set to increase - exponentially. ... Smartphone 

penetration among 16- to 24-year-olds in the UK is 88 percent, compared with 65 percent for other age 

groups.”). 

1419 Bezerra, Julio et al., “The Mobile Revolution,” BCG, January 2015, Exhibit 12. 

1420 Bezerra, Julio et al., “The Mobile Revolution,” BCG, January 2015, p. 23. 

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494. Several factors provide additional evidence of an increase in consumer surplus generated by 

mobile devices, including the decrease in the average price of smartphones,1421 the increased 

willingness to pay for smartphones, and the penetration of mobile devices over time. For 

example, worldwide sales of smartphones have grown more than 12-fold since their first 

commercial launch, from 122 million units in 2007 to 1,536 million units in 2017.1422

495. Mobile device, and particularly smartphone, penetration has been increasing over time. 

According to a survey of 40 countries (including emerging and developing countries as well 

as advanced economies) conducted by the Pew Research Center, in 2015 the median country 

had a 43 percent smartphone penetration and an additional 45 percent cellphone adoption.1423 

Smartphone ownership was found to be the highest in South Korea, at 88 percent, with the 

remaining 12 percent of the adult population owning a cellphone. In the U.S, smartphone 

penetration was 72 percent and an additional 19 percent of adults reported owning a 

cellphone.1424

496. The modem chip is one of many components that contribute to the overall consumer surplus 

from mobile devices. Available evidence indicates that consumers are willing to pay 

considerably more for a smartphone with LTE technology,1425 suggesting that the modem chip 

has an effect on consumers’ demand and, therefore, on their surplus. 

 

1421 See, e.g., Bock, Wolfgang et al., “The Growth of the Global Mobile Internet Economy,” BCG, February 10, 

2015 (“Average smartphone selling prices fell 25 percent worldwide between 2011 and 2013 and are expected 

to drop a further 19 percent by 2017 [...].”). See also Exhibit 2 in “The Growth of the Global Mobile Internet 

Economy,” BCG, February 10, 2015. 

1422 See, e.g., “Number of Smartphones Sold to End Users Worldwide from 2007 to 2017 (in Million Units),” 2018, 

Statista, available at https://www.statista.com/statistics/263437/global-smartphone-sales-to-end-users-since2007/. 

1423 “Smartphone Ownership and Internet Usage Continues to Climb in Emerging Economies,” Pew Research 

Center, February, 2016 (“Overall, a global median of 43% say that they own a cellphone that is a smartphone, 

which is defined as a cellphone that can access the internet and apps, such as an iPhone or an Android. An 

additional 45% across the 40 countries say they have a cellphone that is not a smartphone. A median of only 

12% among respondents say that they do not own a cellphone of any kind.”). 

1424 “Smartphone Ownership and Internet Usage Continues to Climb in Emerging Economies,” Pew Research 

Center, February 2016, p. 16. 

1425 See, e.g., Montenegro, José A. and José L. Torres, “Consumer Preferences and Implicit Prices of Smartphone 

Characteristics,” Working Papers, Universidad de Malaga, Department of Economic Theory, Malaga Economic 

Theory Research Center, No. 2016-04, 2016, Table 4. Hedonic regression results. 

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D. Conclusion 

497. Standard indicators of industry performance do not provide any support for Plaintiff’s 

Hypothesis. The modem chip industry has performed incredibly well, delivering huge 

improvements in modem chips at the same time as prices continued to decline. Specifically, 

while the performance of modem chips improved greatly in terms of their transmission speed, 

processor speed, and the number of CPU cores, modem chip prices roughly halved. For 

example, maximum downlink speed increased from 150 Mbps in 2013 and to 1,024 Mbps in 

2017 among 4G-compatible devices, while prices of 4G LTE modem chips have declined by 

approximately half since 2012. Along with other improvements, e.g., greater processing power, 

the modem chip industry has contributed to increased levels of consumer surplus This 

performance is evidence against the implication of Plaintiff’s Hypothesis that Qualcomm’s 

alleged exclusionary conduct has impaired industry performance.

VII. ASSESSMENT OF PROFESSOR SHAPIRO’S OPINIONS 

498. In this section, I address Professor Shapiro’s conclusions that certain adverse outcomes for 

individual modem chip suppliers have been caused by Qualcomm’s alleged exclusionary 

conduct. Based on a three-part theory of anticompetitive effects, 1426 Professor Shapiro 

concludes that Qualcomm’s alleged exclusionary conduct (a) reduced the output of rival 

suppliers’ modem chips, (b) discouraged investment by Qualcomm’s rivals, (c) caused rivals 

to exit, and (d) delayed entry by rivals into his claimed “market for CDMA Modem Chips” 

 

1426 Professor Shapiro’s theory of anticompetitive harm has three main components. 

First, Professor Shapiro contends that, “[a]s a result of Qualcomm’s no-license/no-chips policy, Qualcomm has 

been able to obtain unreasonably high royalties for its cellular SEPs,” and that this has “raised the cost to 

handset manufacturers of using non-Qualcomm chips.” 

Second, Professor Shapiro contends that “Qualcomm’s policy of refusing to license its cellular SEPs to its rivals 

[...] has worked in concert with Qualcomm’s no-license/no-chips policy to raise the royalties for Qualcomm’s 

cellular SEPs [...], and to raise the combined cost to handset manufacturers of a modem chip and a Qualcomm 

cellular SEP license.” 

Third, Professor Shapiro contends that Qualcomm has “obtain[ed] exclusivity at Apple” by making “large 

exclusivity payments” that “created a powerful incentive for Apple not to use non-Qualcomm modem chips in 

any new Apple device.” 

Shapiro Report, ¶ 9. 

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and “market for Premium LTE Modem Chips.”1427 Professor Shapiro’s conclusions are, of 

course, in contrast to my conclusion that modem chip supplier outcomes have been fully 

explained by industry factors and were not caused by Qualcomm’s alleged exclusionary 

conduct. My conclusion is based on development of the Industry Factors Hypothesis and 

identification of relevant industry factors in Section III as well as my tests of the Industry 

Factors Hypothesis against Plaintiff’s Hypothesis in Section IV, Section V, and Section VI. 

499. As I explain in this section, Professor Shapiro’s conclusions concerning anticompetitive effects 

lack foundation.1428 Professor Shapiro does not evaluate his claims against the clearly relevant 

counterfactual in which Qualcomm’s alleged exclusionary conduct is removed, but relevant 

industry factors influence outcomes. Without doing so, Professor Shapiro cannot isolate the 

effects of Qualcomm’s alleged exclusionary conduct, if any, from the effects of industry factors 

that would be present in a world without Qualcomm’s alleged exclusionary conduct. 

500. Applying the insights from my detailed case analyses in Section V of 14 modem chip suppliers, 

including all major modem chip suppliers since 2002, it is clear that Professor Shapiro’s claims 

concerning TI, Broadcom, Marvell, Nvidia, ST-Ericsson, MediaTek, the “Dragonfly” joint 

venture, and Intel all suffer from a fundamental deficiency, i.e., that Professor Shapiro does 

not have a clear counterfactual and is therefore not able to causally connect and isolate the 

effects of Qualcomm’s alleged exclusionary conduct. Beyond citing only scant evidence to 

support his claims that Qualcomm’s alleged exclusionary conduct may have been related to 

certain outcomes of these companies as modem chip suppliers, Professor Shapiro does not 

consider that industry factors and industrial organization principles generally could account 

for those outcomes and indeed, as supported by the extensive evidence presented above, do 

account for those outcomes. 

501. The case-by-case evaluations below of Professor Shapiro’s claims demonstrate clearly that 

industry factors, including the importance of foresight, efficient investment, and execution, 

 

1427 Shapiro Report, ¶¶ 9, 258. 

1428 To be clear, I do not address all aspects of Professor Shapiro’s opinions. I focus on the modem chip supplier 

outcomes that Professor Shapiro asserts have resulted from Qualcomm’s alleged exclusionary conduct through 

his proposed theoretical mechanisms, and I assess whether Professor Shapiro has a sufficient basis to conclude 

that such outcomes were caused by those mechanisms rather than other unrelated industry factors. In that 

regard, lack of assessment of any of Professor Shapiro’s opinions does not indicate agreement on my part. I 

understand that other Qualcomm experts are addressing other aspects of Professor Shapiro’s opinions. 

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fully explain the outcomes that Professor Shapiro cites. Given his lack of consideration of the 

most important alternative hypothesis and the strong evidence in support of the alternative 

explanation, Professor Shapiro’s conclusions in support of Plaintiff’s Hypothesis cannot be 

accepted. Indeed, all of his claimed anticompetitive outcomes are fully explained by industry 

factors. 

A. Claimed anticompetitive effects in terms of certain modem chip suppliers’ 

margins and exits 

502. Given his theory concerning Qualcomm’s alleged “no-license/no-chips policy,” which I 

interpret as a claim that Qualcomm “ties” its modem chips to its patent licenses,1429 Professor 

Shapiro claims that Qualcomm excluded rival modem chip suppliers.1430 Even though he 

acknowledges that “it is difficult to isolate the effect of Qualcomm’s conduct on its modem 

chip rivals,”1431 he concludes that Qualcomm’s alleged exclusionary conduct caused the exits 

 

1429 Professor Shapiro refers to Qualcomm’s alleged “no-license/no-chips policy” as Qualcomm’s “linking the 

supply of modem chips to the royalty rate [...].” Shapiro Report, ¶ 275. Antitrust economists typically refer to 

cases where “buyers wanting to purchase one (‘tying’) product” must “also buy a second (‘tied’) product” as 

“tying” or “tie-in sales.” “Tying the Sale of Two Products,” FTC, available at https://www.ftc.gov/tipsadvice/competition-guidance/guide-antitrust-laws/single-firm-conduct/tying-sale-two-products. 

1430 Professor Shapiro asserts that “Qualcomm is using the market power associated with its modem chips to induce 

OEMs to agree to pay a per-handset royalty in excess of a reasonable level when purchasing modem chips from 

any of Qualcomm’s rivals. [...] Put simply, an OEM’s demand for a rival modem chip is reduced if the OEM 

must pay the excess royalty x when it uses a rival modem chip.” Shapiro Report, ¶ 298. He asserts further that 

“this excess royalty excludes rival modem-chip suppliers. In the short run, that exclusion takes the form of 

reducing the competitive constraint that the rivals impose on Qualcomm, which leads to reduced output of rival 

modem chips. [...] In the long run, that exclusion also takes the form of reduced investments by rival modem 

chip suppliers, leading those rivals to offer lower quality modem chips and/or to have reduced capacity. In 

time, the excess royalty can induce exit from the market altogether.” Shapiro Report, ¶ 301. In doing so, he 

ignores testimony by

 

1431 Shapiro Report, ¶ 302. 

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of TI, Broadcom, Marvell, Nvidia, and ST-Ericsson.1432 He also suggests that Qualcomm’s 

alleged exclusionary conduct affected the margins of Broadcom, Marvell, Nvidia, and 

MediaTek.1433

503. The record on the experiences of each of these rival suppliers does not support Professor 

Shapiro’s claims. Instead, industry factors account for each case, and Professor Shapiro has 

not demonstrated that outcomes would have been different given these industry factors in the 

counterfactual world where Qualcomm did not have a “no-license/no-chips policy.” 

1. Texas Instruments 

504. Professor Shapiro’s inclusion of TI on his list of firms that “stopped selling modem chips 

between 2012 and 2015” and that had “sale[s] of Premium LTE Modem Chips” is not 

consistent with TI’s timeline.1434 As explained in Section V.C.7, TI decided as early as 2008, 

prior to the launch of any LTE networks, to phase out its modem chip business in favor of APs. 

Indeed, elsewhere in his report, Professor Shapiro himself does not include TI on his list of 

modem chip suppliers that exited between September 2012 and September 2015.1435 TI, which 

was the largest modem chip supplier until 2009,1436 completed its exit from the modem chip 

industry by 2013. I have seen no evidence that it had any LTE products planned or in 

development prior to its exit. Indeed, Nvidia’s Deepu Talla, formerly of TI, testified that TI’s 

AP sales were impaired by lack of a LTE solution.1437

 

1432 Shapiro Report, ¶¶ 258, 302. 

1433 Shapiro Report, ¶¶ 302–304, 334. 

1434 Shapiro Report, ¶ 302. 

1435 Shapiro Report, ¶ 251 (“Between September 2012 and September 2015, Broadcom, ST-Ericsson, Nvidia, and 

Marvell all exited the modem chip business [...].”). 

1436 See Exhibit III.D.3. 

1437 Talla Deposition, Nvidia, pp. 14–15 (“Q. And prior to Nvidia, did you work at Texas Instruments? A. Yes. 

[...] Q. And the TI -- TI had an applications processor. Is that right? A. Correct. Q. And that was referred to 

as OMAP, O-M-A-P? A. That’s correct. Q. And at any point in time were you the head of the OMAP business 

unit? A. Not the complete OMAP business unit, but I was reporting in to the complete general manager of the 

OMAP business unit.”) and pp. 103–104 (“Q. Okay. And what did you discuss about TI? A. The same idea 

that access -- lack of access to a thin modem from Qualcomm impaired TI OMAP also. [...] Q. [...] TI sold 

OMAP to OEMs that used other thin modems, did they not? [...] [A.] Yes. We would sell an application 

processor. And the idea is to pair with any thin modem in the market [...]. [...] Q. But TI was successful in 

selling to Motorola, for example, with other modems other than Qualcomm, were they not? [...] [A.] In 2009, 

’10, ’11, that was absolutely true. But the landscape completely changed with 4G LTE starting in 2012, and 

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505. As discussed in Section V.C.7 and summarized in Exhibit V.D.1, TI’s exit from the modem 

chip industry is fully explained by industry factors. TI’s 2G modem chips eventually became 

uncompetitive, and TI lost business to MediaTek, Spreadtrum, and Infineon.1438 Within 3G, 

TI was regarded as being focused on hardware only, and analysts expressed that TI was thus 

vulnerable, as demand from OEMs was shifting toward 3G modem chips with embedded 

software.1439 Indeed, TI sold a large share of its modem chips to Nokia and EMP,1440 and its 

sales thus fell rapidly when these OEMs switched to other modem chip suppliers.1441 Analysts 

attributed this in part to TI’s “under-invest[ment] in 3G,”1442 although TI’s overall R&D 

spending was comparable to that of other modem chip suppliers at the time.1443 In addition, 

 Qualcomm thin modems were not available starting in that time. [...] Q. So it was really the lack of LTE that 

impaired TI. A. Primarily.”). 

1438 See, e.g., Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband 

Exit,” Strategy Analytics, June 2009, pp. 6–7 (“TI has had some success with its own baseband designs in the 

low-end GSM/GPRS market [...]. However, TI faced increased competition from Infineon, MediaTek and 

Spreadtrum in this segment.”). See also McGrath, Dylan, “Why OMAP Can’t Compete in Smartphones,” EE 

Times, September 27, 2012 (“TI, having tired of the baseband business after being undercut on price by 

MediaTek and others, had no intention of reversing its field.”). 

1439 See, e.g., Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband 

Exit,” Strategy Analytics, June 2009, p. 18 (“The cellular baseband market is shifting from custom ASICs to 

ASSP solutions as handset manufacturers like Nokia, Motorola and Sony Ericsson are turning to off-the-shelf 

solutions to focus more on user experience and software. This has left TI vulnerable as the company currently 

doesn’t have a 3G baseband design of its own [...].”). 

Cellular Handset & Chip Markets,” Forward Concepts, 2009, p. 155 (“Texas Instruments 

continues as the global leader in ‘stackless’ WCDMA baseband chip sales [...]. [...] TI supplies the silicon, 

and EMP the 3G-protocol stack and software based voice/audio codecs-.”). 

1440 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, pp. 5, 12. 

1441 See, e.g., Sideco, Francis, “Qualcomm and ST-Ericsson Shine, Even as Wireless Chip Market Tanks,” IHS 

Markit, April 30, 2009 (“Texas Instruments Inc. (TI), suffered the worst performance among the Top-5 

suppliers in 2008, with revenue plunging by 22.5 percent for the year. The company continued to share [sic] as 

its major customer, Nokia, took steps to diversify its supply base and engage more with other wireless chip 

makers.”). See also Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ 

Baseband Exit,” Strategy Analytics, June 2009, p. 5 (“The recent diversification of the supplier base at Nokia 

was a big blow to TI’s baseband ambitions and this, along with the loss of EMP (Ericsson Mobile Platforms) to 

ST-Ericsson, caused the company to rethink its baseband market strategy.”). 

1442 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 18 (“TI under-invested in 3G basebands and as a result lost its EMP account 

and is losing share at its largest customer Nokia also.”). 

1443 See Exhibit III.E.1 and Exhibit III.E.2. 

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TI executed poorly in terms of its attempts to respond to OEMs’ demands for integrated 

solutions and for components beyond modem chips. Analysts expressed that, while TI had 

established a large engineering team, it underestimated the difficulty of integrating multimedia 

capabilities onto its modem chips and lagged in transceiver development.1444

506. Each of these factors would be present in the counterfactual world absent Qualcomm’s alleged 

exclusionary conduct. Professor Shapiro’s approach thus erroneously attributes the effects of 

these industry factors to such conduct. In addition, Professor Shapiro provides no information 

regarding, for example, TI’s modem chip margins or R&D strategy or spending, let alone 

evidence that Qualcomm’s alleged exclusionary conduct caused TI’s exit from the modem chip 

industry. To the contrary, a report he cites states that TI exited the modem chip industry in 

connection with the shift from 2G to 3G technology (i.e., prior to the subsequent shift from 3G 

to 4G), due in part to “increasing competition.”1445

2. Broadcom 

507. While Professor Shapiro claims that low margins caused or contributed to Broadcom’s exit 

from the modem chip industry, he provides no evidence that Qualcomm’s alleged exclusionary 

conduct caused Broadcom’s margins to be low or caused Broadcom to exit the modem chip 

industry, and he does not evaluate the relevant alternative hypothesis.1446 Professor Shapiro in 

fact cites a document that attributes Broadcom’s slowing sales of 3G modem chips in 2013, 

and low 3G margins generally, to “intense competition” related to low “barrier[s] to entry in 

 

1444 Kundojjala, Sravan and Stuart Robinson, “Baseband Processor Profile: Texas Instruments’ Baseband Exit,” 

Strategy Analytics, June 2009, p. 17 (“TI underestimated the investment and time-to-market requirements of 

developing transceivers, then compounded this mistake with 3G basebands. We believe that TI also 

underestimated the difficulty of integrating multimedia capabilities into its SoCs. TI had more than 1,000 

engineers working on cellular RF and basebands, but failed to keep up with competitors. According to 

competitors, TI has never done a good job in software and system integration, leaving those tasks to its 

customers.”). See also Zander Deposition, Ericsson, p. 77 (“Q. Has TI supplied integrated solutions? A. They 

have provided integrated solutions for feature phones only. Q. Okay. Was there a reason that you understood 

or that TI did not provide the integrated solutions for smartphones? A. The reason was because they did not 

have access to the technology. Q. And why was that? A. The cellular technology, because they couldn’t 

develop it themselves.”). 

1445 Shapiro Report, ¶ 251 n.525, citing Macquarie Research, “US Semiconductors: The Money Pit,” September 18, 

2014, p. 9. See also Shapiro Report, ¶ 258. 

1446 Shapiro Report, ¶ 303. 

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3G” and the “maturity of 3G baseband technology.”1447 The same document states that, 

notwithstanding Broadcom’s “access to a dual-core LTE SoC that was ready for volume 

production and was carrier-validated by leading global operators in North America, Japan and 

Europe” following its acquisition of Renesas in 2013, its “technological roadmap” was “still 

considered to be behind peers like Qualcomm, MediaTek and Marvell Technology” when it 

exited the modem chip industry in 2014.1448 Moreover, elsewhere in his report, Professor 

Shapiro himself notes an industry factor independent of Qualcomm’s alleged exclusionary 

conduct that would be expected to affect Broadcom’s margins – namely, competition arising 

from Samsung’s plan to “use multi-sourcing from Intel, Broadcom, and Samsung’s internal 

modem chip business” and to “drive down the prices it faced” – but he fails to account for this 

industry factor in his discussion of Broadcom’s margins.1449

508. As discussed in Section V.C.8 and summarized in Exhibit V.D.1, Broadcom’s exit from the 

modem chip industry is fully explained by industry factors, each of which would be present in 

the counterfactual world absent Qualcomm’s alleged exclusionary conduct. Broadcom 

exercised poor foresight in setting its priorities for investing in 2G, 3G, and 4G technologies. 

Broadcom’s Robert Rango stated in 2011 that Broadcom had “invested in [2G EDGE] when 

we should have invested in 3G [...] four years ago,” and he characterized this as a “mistake” 

that Broadcom would “pay for.”1450 In addition, while Broadcom continued to invest in 2G 

and 3G technologies, it did not focus on producing 4G modem chips until 2010. At that point, 

after having searched for a 4G acquisition for about a year, Broadcom acquired Beceem, which 

it acknowledged was likely a more costly strategy than having developed a 4G solution in 

 

1447 Shapiro Report, ¶ 251 n.525, citing Trefis Team, “Rising Competition Forces Broadcom to Exit the Baseband 

Market,” Forbes, June 4, 2014. 

1448 Shapiro Report, ¶ 251 n.525, citing Trefis Team, “Rising Competition Forces Broadcom to Exit the Baseband 

Market,” Forbes, June 4, 2014. 

1449 Shapiro Report, ¶ 188. See also Rango Deposition, Broadcom, pp. 28–29 (“By the time Broadcom had a viable 

product line, the prices in the cellular baseband business decreased at a rate that was faster than our financial 

projections. [...] Q. Do you have an understanding as to why the ASPs were declining faster than projected? 

A. Could have been a number of things. There was many competitors in the marketplace. Certainly there’s at 

least three or four different companies vying for each piece of business. I’m sure that contributed to it. Market 

was growing very rapidly as well, which led to a lot of price erosion.”). 

1450 BRCM174660–4661 at 4660, email from Robert Rango, Broadcom, July 25, 2011 (“We invested in edge when 

we should have invested in 3G (mistake made four years ago. We are going to pay for this in 2012, 13)[.]”). 

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house.1451 It also proved to be an unsuccessful strategy, as Broadcom did not start shipping 

LTE modem chips until 2014, after it had also acquired Renesas to accelerate its LTE modem 

chip development.1452 This failure was potentially related to Broadcom’s decision not to retask Beceem to focus on LTE until 2011, having allowed it to split its expertise between 

WiMAX and LTE prior to that.1453

509.

 

 

1451 See, e.g., “Broadcom Sees WiMAX/LTE Combo Key Differentiator with Beceem Buy,” FierceWireless, 

October 14, 2010 (“Broadcom announced it has signed a $316-million deal to acquire Beceem Communications 

to enable it to get a leg up in the next-generation chip market that consists of WiMAX and LTE. [...] ‘The 

development costs associated with 4G are substantial. We have technologists who could have developed this, 

but we saw opportunities in 2G and 3G we wanted to leverage instead. So we let outside startups continue to 

invest,’ [general manager of Broadcom‘s mobile platforms group Scott] Bibaud said. ‘It probably meant that 

we could have built a 4G solution a little more cheaply if we built it in-house [...].’ Broadcom has been 

searching for a 4G chip acquisition for about a year.”). See also Merritt, Rick, “Analysis: Inside Broadcom’s 

Bid for Beceem, LTE,” EE Times, October 13, 2010 (“‘We have had internal development work on LTE in 

Broadcom for a few years,’ Bibaud said. ‘What we get with Beceem is technology that has seen a lot more of 

the market and a fuller team to accelerate our time to market,’ he said. The Beceem deal ‘is not a big surprise – 

it was well known Broadcom was looking for a 4G core,’ said Eran Eshed, co-founder and vice president of 

marketing at Altair Semiconductor [...].”). 

1452 See, e.g., Rango Deposition, Broadcom, p. 167 (“Q. Did Broadcom have an in-production LTE chipset in 

February 2013? A. I think, just to keep the record straight, the first LTE solution that Broadcom had came after 

the Renesas acquisition, which I believe was in 2013, and it was the EOS2 chip. So I don’t know -- this was 

February 2013, and I think that acquisition happened in 2013, but I -- I can’t recall the exact date.”). See also 

“Analyst Day 2013,” Broadcom, p. 55 (slide titled “Portfolio of 3G and 4G SoC Platforms,” listing the 

M320/EOS2 as a 4G LTE SoC); Ray, Tiernan, “Broadcom Rises: Street Cheers Turn in LTE Outlook,” 

Barrons, December 10, 2013 (“[... Broadcom] announced that its M320 dual-core LTE SoC would ship into a 

Samsung phone in early 2014.”); BROADCOM-USFTC00000100, pp. 4–5, presentation titled “Project Ravello 

Deal Presentation,” Broadcom, September 3, 2013 (“Rationale[:] Accelerate our LTE program and take clear #2 

position in industry[.]”); Yoshida, Junko, “Broadcom Buys Renesas’ LTE Assets – IP, SoC & Engineers,” EE 

Times, September 4, 2013 (“With the new acquisition deal, Broadcom, which has shipped no LTE products to 

date, will suddenly own a dual-core LTE SoC, developed by Renesas Mobile, ready for volume production and 

certified by leading global operators in North America, Japan, and Europe.”). 

1453 “Broadcom Acknowledges WiMAX’s U.S. Decline,” FierceWireless, August 12, 2011 (“Broadcom, which 

bought WiMAX/LTE chipmaker Beceem last year or $316 million in a bid to get a leg up in the 4G market, is 

acknowledging that WiMAX’s position in the U.S. market is fading fast. [...] Hurlston [i.e., Michael Hurlston, 

senior vice president of Broadcom’s wireless LAN business at the time] said Broadcom is ‘re-tasking’ its 

Beceem team to focus on LTE. Beceem [...] has hedged its bets with an LTE/WiMAX combo chip.”). 

1454 

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3. Marvell 

510. According to Professor Shapiro, low margins also caused or contributed to Marvell’s exit from 

the modem chip industry.1457 Professor Shapiro again provides no evidence that Qualcomm’s 

alleged exclusionary conduct was the cause and does not evaluate the relevant alternative 

hypothesis. One document he cites attributes Marvell’s declining mobile and wireless 

revenues into 2015 to “modem pressures” stemming from “the slowdown in the Chinese 

economy.”1458 The same document also notes that Marvell’s early success had been in China, 

“where new competitors are emerging most strongly.”1459

511. As discussed in Section V.C.12 and summarized in Exhibit V.D.1, Marvell’s exit from the 

modem chip industry is fully explained by industry factors. Marvell demonstrated poor 

foresight in failing to plan adequately in advance for LTE development. Analysts stated in 

2009 that Marvell did not have a LTE roadmap and predicted that Marvell could fall behind 

 

1456 

1457 Shapiro Report, ¶ 303. 

1458 Gabriel, Caroline, “Marvell is Latest Casualty of Mobile Modem Meltdown,” Rethink Technology Research, 

October 2, 2015. See also Shapiro Report, ¶ 251 n.525. 

1459 Gabriel, Caroline, “Marvell is Latest Casualty of Mobile Modem Meltdown,” Rethink Technology Research, 

October 2, 2015. See also Shapiro Report, ¶ 251 n.525. 

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competitors as a result.1460 In addition to its late LTE development, Marvell also failed to meet 

delivery deadlines, which caused it to lose a major customer, BlackBerry; some also expressed 

that Marvell had lost credibility more broadly.1461 Moreover, Marvell relied on third parties 

for RF transceivers, certain software, and GPS technology, which increased the cost and size 

of its modem chips and reduced Marvell’s ability to compete on the number of components it 

could supply OEMs.1462 

 Marvell also faced pricing pressure from Spreadtrum, 

MediaTek, and Qualcomm in sales for lower-end mobile devices.1464

4. Nvidia 

512. As in other cases, Professor Shapiro asserts that Nvidia’s exit from the modem chip industry 

was related to “depressed margins.”1465 But he provides no evidence that Qualcomm’s alleged 

 

1460 Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to Reconsider Its 

Baseband Position,” Strategy Analytics, November 2009, p. 11 (“Marvell currently does not have HSPA 

basebands and a visible LTE product roadmap. We believe this lack of an LTE roadmap could put Marvell 

behind its competitors Qualcomm, ST-Ericsson and Infineon.”). 

1461 See, e.g., Grubbs Deposition, BlackBerry, pp. 110–112 (“Q. Why did BlackBerry stop purchasing BlackBerry 

baseband processors chips from Marvell? A. There were several reasons. We [...] were having some issues 

with [...] commitments to timelines for deliveries from Marvell. They had slipped on several deadlines that 

they had promised to deliver things to us by. They apparently -- or from what I -- what I understand were 

about two years behind on LTE development.”). 

1462 See, e.g., Kundojjala, Sravan and Stephen Entwistle, “Baseband Processor Profile: Time for Marvell to 

Reconsider Its Baseband Position,” Strategy Analytics, November 2009, p. 11 (“Marvell did not inherited [sic] 

a complete modem protocol software stack from Intel and the company had to license it from TTPCom to port it 

to its PXA 90x products. Competitor companies have in-house protocol stacks which disadvantages Marvell 

when competing in the cellular baseband market. [...] Marvell currently depends on third parties to source RF 

transceivers that work with its cellular basebands.”). See also Chhabra Deposition, Marvell, pp. 36–38 (“Q. 

And did Marvell’s reliance on external vendors for GPS and NFC technology increase the cost of the overall 

chipset solution? A. Yes. [...] Q. [...] Did Marvell’s reliance on external vendors for GPS and NFC 

technology have implications for the overall printed circuit board size? A. Yes. Q. And what were those 

implications? A. More chips. Q. And did more chips then lead to a larger size? A. Larger printed board size. 

Q. And for some OEM customers, could that be undesirable? A. Possible.”). 

1463 

.”). 

1464 Chhabra Deposition, Marvell, p. 151 (“Q. Earlier, when you were testifying about a price war involving 

Marvell, MediaTek, Qualcomm, and Spreadtrum, was that a price war in the mid to low tier of LTE chips? [...] 

[A.] I would say so.”). 

1465 Shapiro Report, ¶ 303. 

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exclusionary conduct decreased Nvidia’s margins or caused its exit. A document he cites 

indicates that Nvidia’s “plan of integrating the Icera modems into its Tegra processors never 

fully materialized.”1466 Another document he cites states that, “although [Nv]idia has roots in 

graphics chips, its Tegra chip does not stand out among GPU solutions” and was “losing 

support in super high-end smartphones [...].”1467

513. As discussed in Section V.C.13 and summarized in Exhibit V.D.1, industry factors fully 

explain Nvidia’s experience and eventual exit from the modem chip industry. Nvidia 

demonstrated poor foresight with respect to its modem chip business by misjudging the size of 

different mobile device segments. Specifically, Nvidia’s strategy was to integrate its highperforming APs onto its Icera modem chips, which lacked features required for high-end 

mobile devices. This strategy was premised on Nvidia’s anticipation that this combination 

would be successful in what it considered “mainstream” mid-tier mobile devices.1468 However, 

Nvidia later assessed that this was no longer a large enough segment, as OEMs focused more 

on producing either higher-end mobile devices or lower-end and high-volume mobile 

devices.1469

514. Related, Nvidia’s strategic decision not to develop CDMA solutions reduced its ability to 

compete for sales of modem chips used in high-end mobile devices. As Nvidia recognized, 

OEMs typically demand CDMA support for their high-end mobile devices. Because Nvidia’s 

 

1466 “Nvidia To Sell Its Icera Business & Exit The Mobile Chip Market,” Forbes, May 7, 2015. See also Shapiro 

Report, ¶ 251 n.525. 

1467 Yu, Peter, “The Building Blocks of a 4G Superphone,” BNP Paribas, May 9, 2013, pp. 22, 27. See also Shapiro 

Report, ¶ 251 n.526. 

1468 See, e.g., Talla Deposition, Nvidia, p. 111 (“Q. And were the modems that Nvidia launched in the LTE space 

[...] in the high-end tier? A. No. We considered them in the mainstream. So that was the whole premise of our 

investment: that we cannot -- you know, we would target the mainstream by offering a high-end application 

processor performance, but bring that to the mainstream with a mainstream modem.”). See also Talla 

Deposition, Nvidia, p. 64 (“So our positioning with Tegra 4i was, we were offering very close to Qualcomm’s 

premium-end application processor performance, but at a mainstream segment price, based on our application 

processor advantage.”). 

1469 Talla Deposition, Nvidia, pp. 107–109 (“Q. In what way did the market commoditize pretty quickly? A. 

[...W]hen we started the market, in around the 2012-13 time frame, we looked at the market as three different 

segments: One was high-end premium smartphone; the second, the middle, was a middle end or a mainstream, 

if you will, that will offer close to premium performance; and then at the very low end, you know, very big 

volume. [...] But what we found is, by 2015 time frame, the market, instead of having all those different tiers, 

quickly consolidated to the premium and the volume tier.”). 

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modem chips did not provide CDMA support, OEMs wishing to use one of Nvidia’s APs in a 

high-end device would need to pair it with a modem chip supporting CDMA from another 

supplier.1470 However, as explained in Section III.E.1.c.i and Section V.C.4.b, OEMs’ demand 

has increasingly shifted toward integrated solutions due to size, cost, and power consumption 

concerns, and Nvidia did not provide an integrated solution with CDMA support. In addition, 

Nvidia faced execution challenges at times related to the power consumption of its thin 

modems and SoCs.1471

515. Nvidia announced in 2015 that it would exit the modem chip industry to focus on other areas 

where it believed its expertise would result in greater returns, such as virtual reality and selfdriving cars.1472 It continues to produce successful Tegra APs,1473 and it recently announced 

 

1470 Talla Deposition, Nvidia, pp. 55–56 (“Q. [...] Is it correct that you ended up deciding not to have an integrated 

modem for Erista? A. Correct. Q. And why? Why was that? A. Because it was a premium application 

processor, and it was going after the very high end of the market. And the very high end of the market, you 

need the -- you know, on the high end of the market, you need CDMA; you need other features that our modem 

was -- the roadmap in that time frame was not supporting it. [...] Q. So your strategy was to [...] pair your AP 

with somebody else’s modem for the [...] high-end phones. A. Correct.”). 

1471 See, e.g., Exhibit QX2685, Miller Deposition, Nvidia, p. 4 (“i500 validation program[:] Project is ongoing as 

planned. But LG has 2 main concerns. One is RF performance which is under LG’s expectation. And the other 

is high power consumption.”). See also Exhibit QX2684, Miller Deposition, Nvidia, p. 5 (“[...] i450 could 

meet neither performance requirement no[r] power consumption requirement[.]”); Exhibit QX2731, Talla 

Deposition, Nvidia, pp. 1–2 (“Power[:] We are still not in great shape on power, or I should say we are not 

really at what we can achieve with the current platform[.] [...] This is a blocker to adoption until this is good 

enough[.]”). 

1472 See, e.g., “Nvidia to Wind Down Icera Modem Operations,” Nvidia Press Releases, May 5, 2015, (“Nvidia 

today announced that it will wind down its Icera modem operations in the second quarter of fiscal 2016. The 

company is open to a sale of the technology or operations.”). See also Exhibit CX4051, Talla Deposition, 

Nvidia, CX-4051-001−004 at 003–004 (also marked NVIDIA-00609168−9173), email from Deepu Talla, May 

14, 2015 (“We felt (and still feel) that having modem technology for a platform company is an advantage. 

However, we had to wind down as we have higher ROI elsewhere and we need to grow in deep learning, virtual 

reality, and self-driving cars. [...] Going after the phone/mobile revolution was cover charge even if we did 

not succeed in phones today. We are looking at other ways (GPU IP) to address the phone market. Our DNA is 

technology and platform leadership. Which means that we need to be #1 in a market truly to build a sustainable 

business.”). 

1473 See, e.g., Niu, Evan, “Appreciating Nvidia Corporation’s Stunning Tegra Recovery,” The Motley Fool, 

November 12, 2016, (“Last quarter, Tegra sales soared 87% to $241 million, driven by both gaming 

development platforms and momentum in automotive.”). See also Talla Deposition, Nvidia, pp. 60–61 (“Q. 

And can you tell me again what the product name for Erista ended up being? A. TX1. Q. And is that still on 

the market? A. It is certainly on the market. [...] It is in -- if you are familiar with the Nintendo Switch game 

console, it includes the Tegra X1. The Shield Android TV includes the Tegra X1. There’s plenty of video 

analytics devices all over the world that’s doing autonomous machines. TX1, and also a lot of robots. Plenty of 

customer interactions for that device.”). 

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record quarterly revenues of $3.21 billion, driven by its leadership in GPU technology, 

including in mobile platforms.1474

5. ST-Ericsson 

516. Professor Shapiro provides no information regarding, for example, ST-Ericsson’s modem chip 

margins or R&D strategy or spending. Nor does he establish that Qualcomm’s alleged 

exclusionary conduct caused harm to this rival. To the contrary, one of the source documents 

that Professor Shapiro cites attributes Ericsson’s exit from the modem chip industry in 2014, 

following the break-up of ST-Ericsson in 2013, in part to the fact that “more device makers 

choose to buy system-on-a-chip solutions with modems married to application processors, 

which Ericsson d[id] not offer.”1475

517. As discussed in Section V.C.6 and summarized in Exhibit V.D.1, ST-Ericsson’s exit is fully 

explained by industry factors, each of which would be present in the counterfactual world 

absent Qualcomm’s alleged exclusionary conduct. The record indicates 

.

1476 As a result, when its customers’ 

mobile device sales fell, and when, around 2010, Nokia migrated its phones to the Windows 

operating system, which the SoC that ST-Ericsson was developing at the time would not 

support, ST-Ericsson faced a drop-off in demand.1477 Additionally, after the split of ST-

 

1474 “Nvidia Announces Financial Results for First Quarter Fiscal 2019,” May 10, 2018 (“N[vidia] today reported 

record revenue for the first quarter ended April 29, 2018, of $3.21 billion, up 66 percent from $1.94 billion a 

year earlier, and up 10 percent from $2.91 billion in the previous quarter. [...] ‘We had a strong quarter with 

growth across every platform,’ said Jensen Huang, founder and chief executive officer of N[vidia]. [...] ‘At 

the heart of our opportunity is the incredible growth of computing demand of AI, just as traditional computing 

has slowed. The GPU computing approach we have pioneered is ideal for filling this vacuum. And our 

invention of the Tensor Core GPU has further enhanced our strong position to power the AI era,’ he said. [...] 

New Platforms[:] [...] Announced that Arm will integrate the open-source N[vidia] Deep Learning Accelerator 

to bring AI inference to mobile, consumer electronics and Internet of Things devices.”). 

1475 Goldstein, Phil, “Ericsson To Exit Wireless-Modem Market, Cut 1,000 Jobs,” FierceWireless, September 18, 

2014. See also Shapiro Report, ¶ 251 n.525. 

1476 See, e.g., ERIC-QCOM_SDCA-00042073–2163 at 2146, presentation titled “ST-Ericsson Board Meeting,” STEricsson, April 20, 2012 

1477 See, e.g., Taylor, Chris, “ST-Ericsson Responds to Dimming Prospects with More Cost-Cutting, Focus on New 

Technology,” Strategy Analytics, June 4, 2012 (“ST-Ericsson’s main customers lost market share in 2011, 

among these Nokia and Sony-Ericsson, accounting for much of ST-Ericsson’s loss of sales.”). See also 

“Cellular Handset & Tablet Chip Markets,” Forward Concepts, 2012, p. 118 (“ST-Ericsson’s shipments in TDREDACTED VERSION OF DOCUMENTS SOUGHT TO BE SEALED

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Ericsson in 2013, Ericsson focused on developing thin modems,1478 while OEMs, as discussed 

in Section III.E.1.c.i, have increasingly demanded integrated solutions. 

1479

518.

 

 

 HSPA declined from 2010 as the midrange market shifted away from foreign suppliers Samsung, Motorola, 

HTC and Nokia, leaving them with Huawei as their only active bidder.”); Q2014FTC03837571–7600 at 7596, 

email from Jim Lederer, Qualcomm, February 28, 2011, with attachment titled “QCT Competitive Update” 

1478 Zander Deposition, Ericsson, p. 207 (“Q. And so why was Ericsson focusing on LTE multimode thin modems 

for smartphones and tablets at this time [i.e., after the split of ST-Ericsson]? A. [...O]ur strategic interest in STEricsson was the cellular technology that supported our radio business, and with the technology leadership that 

Ericsson has in its radio business we also had an interest of having a corresponding modem to support that 

business, hence we wanted to focus on the latest technologies with the most reference to our core business.”). 

1479 

1480 See, e.g., ERIC-QCOM-00040884–0947 at 0901, 

 also Zander Deposition, Ericsson, p. 73 

 and p. 172 

1481 See, e.g., Zander Deposition, Ericsson, pp. 68–69

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6. MediaTek 

519. Professor Shapiro also discusses forecasted margins for certain modem chips made by 

MediaTek, which, as discussed in Section V.C.3 and summarized in Exhibit V.D.1, has been 

a successful modem chip supplier. 1484 Professor Shapiro provides no evidence that 

Qualcomm’s alleged exclusionary conduct has had any causal impact on MediaTek’s modem 

chip margins or other outcomes. 

 

 

 See also ERIC-QCOM-00040883, p. 2, presentation titled “ST-Ericsson Board Members 

Briefing,” Ericsson, October 2011 

1482

 

1483 

1484 Professor Shapiro asserts that, “as MediaTek has attempted to move from lower tiers to the premium tier, it has 

found that the margins it earns on its more premium products are unsustainable.” Shapiro Report, ¶ 304. 

1485 . 

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.

1486

520.

 

1488 In doing so, he 

ignores MediaTek’s recent successes and ongoing efforts to develop modem chips for higherend mobile devices. For example, as discussed in Section V.C.3, MediaTek in 2017 

incorporated some of the high-end features of its Helio X series into its lower-priced Helio P 

series in response to emerging demand trends.1489 Mr. Moynihan testified that he believes 

MediaTek is now competing with Qualcomm in that segment and, more generally, that 

MediaTek has closed the gap with Qualcomm on modem chip technologies since 2010, 

including by doing a better job than Qualcomm in certain dimensions such as power 

consumption.1490 

 

1486 

1487 

1488 Shapiro Report, ¶ 304. 

1489 See, e.g.,

1490 Moynihan Deposition, MediaTek, pp. 283–286 (“Q. Do you believe that MediaTek has closed the gap a lot on 

Qualcomm on the modem technologies? [...] In the time period from 2010 to 2017. A. Yes. I think the gap is 

probably a little bit shorter today than it was in 2010. [...] Q. Do you believe that MediaTek has tended to do a 

better job than Qualcomm on power consumption and batter life? A. Yeah. I think -- I think we’ve -- at least 

I’ve seen enough data internally that suggests under certain use cases that’s true. Yes. [...] Do you believe 

that at the high end, there are certain features on which MediaTek is doing a bit better and other features in 

which Qualcomm is doing a bit better? A. [...] I think, yes, I think on some -- some technologies, some 

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521. Professor Shapiro also ignores MediaTek’s earlier success supplying modem chips for lowerend mobile devices. As discussed in Section V.C.3, MediaTek sold its first GSM modem chips 

in 2004,1493 and it exploited the opportunity for increased sales presented by growing demand 

for mobile devices in emerging economies.1494 In particular, MediaTek also provided software 

solutions and detailed reference designs, which aided OEMs in shortening their mobile device 

design and production cycles.1495 MediaTek introduced its first WCDMA modem chip in 2010 

and its first WCDMA modem chip with integrated AP in 2011,1496 and its WCDMA sales grew 

 features around the multimedia user experience, CPU, yeah, I think we’re doing a pretty good job. [...] Q. 

Okay. Is it your view that MediaTek is competing, today, with Qualcomm in the new premium tier? A. I think 

we’re starting to, yes.”). 

1491 

 

1492 

1493 MediaTek 2007 Annual Report, p. 6 (“Jan. 2004[:] Launched GSM Mobile Phone Chipsets[.]”). 

1494 

1495 See, e.g., Kwong, Robin, “MediaTek Breaks Out Into Mobile Phones,” Financial Times, March 16, 2011 

(“Instead of just offering a chip to power the phone, MediaTek also provided its customers with reference 

designs and a suite of ‘turnkey software solutions.’ By making these available, the company drastically lowered 

the entry barrier to the mobile phone manufacturing industry. The relative ease with which a phone could be 

made using MediaTek’s solution was highlighted by the company’s early customers, who typically had no 

previous experience in the phone industry and sometimes fewer than 10 staff.”). See also Tilley, Aaron, 

“MediaTek’s Plan to Take on Qualcomm and Move Up in the Cut-Throat World of Mobile,” Forbes, June 3, 

2015 (“MediaTek’s talent lies in getting smartphone makers up and running, fast. It provides reference designs-

-blueprints that new manufacturers can follow quickly to put together their own phones. ‘We reduce the whole 

phone-design, mass-production cycle from one and a half years to six months,’ says MediaTek’s senior vice 

president, Jeffrey Ju.”). 

1496 See Exhibit V.B.5. 

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rapidly thereafter,1497 based in part on its strategy of bringing high end features to low-end 

mobile devices.1498 In 2010, MediaTek overtook TI and Qualcomm to become the world’s 

largest supplier of modem chips, and it has remained the second largest supplier since 2011.1499

B. Claimed anticompetitive effects of Qualcomm’s licensing practices 

522. Given his theory concerning Qualcomm’s licensing practices, Professor Shapiro claims that 

Qualcomm harmed its rivals by “eliminating a valuable option” to them and by “discourag[ing] 

investment.”1500

523. Not only does Professor Shapiro acknowledge that, in the absence of “excess royalties,” the 

“effects of Qualcomm’s refusal to license to its modem-chip rivals might be relatively 

minor,”1501 he fails to establish that any harm has actually arisen through either of these 

channels. 

 

1497 See Exhibit V.C.3. 

1498 See, e.g., MTK_00748746, p. 12, presentation titled “MWS All-Hands Meeting,” MediaTek, November 28, 

2012. See also “MediaTek Launches MT6575 Android Platform,” MediaTek Press Release, February 13, 2012 

(“MediaTek [...] today announced the availability of the MT6575, its 3rd generation platform for mid and 

entry-level Android smartphones. [...] ‘We expect significant growth in entry and mid-level smartphones, with 

wholesale prices under US$190, over the coming years. We forecast that this segment will almost triple in size 

from 191 million shipments in 2012 to 551 million by 2016. At that time, we also expect approximately 75% of 

those entry and mid-level smartphones to ship to emerging markets’ said Neil Mawston, Executive Director, 

Global Wireless Practice, at Strategy Analytics. The MediaTek MT6575 platform is ideally suited to cater to a 

wide range of smartphone devices that target this growing segment in multiple markets around the world.”). 

1499 See Exhibit III.D.3. 

1500 Professor Shapiro claims that Qualcomm’s practice of licensing OEMs and not providing modem chip suppliers 

with exhaustive licenses to its SEPs harms modem chip suppliers in two ways, separate from the harm he claims 

arises from his theory of Qualcomm’s charging “excess royalties.” 

First, Professor Shapiro asserts that, “[b]ecause Qualcomm’s policy of refusing to license its modem chip rivals 

precludes those rivals from offering customers licensed modem chips, Qualcomm’s refusal to license its modem 

chip rivals directly harms those rivals and weakens them as competitors to Qualcomm by eliminating a valuable 

option that would otherwise be available to them.” 

Second, Professor Shapiro asserts that “Qualcomm’s refusal to license its modem chip rivals further harms 

competition to the extent that rivals’ inability to obtain a license from Qualcomm on reasonable terms 

discourages investment.” 

 Shapiro Report, ¶¶ 326–328, 334. 

1501 Shapiro Report, ¶¶ 328, 334. 

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1. Claimed harm from “eliminating a valuable option” 

524. Professor Shapiro does not identify why the option of licensing cellular SEPs from Qualcomm 

would be “valuable” to other modem chip suppliers. To the extent he is suggesting that OEMs 

may prefer to purchase modem chips from suppliers that have an exhaustive license to 

Qualcomm’s cellular SEPs because they would then not require patent licenses, he has not 

established that assertion. 

525. Professor Shapiro ignores that there are many cellular SEP holders other than Qualcomm,1502

and that these other cellular patent holders do not typically offer exhaustive component-level 

licenses to modem chip suppliers. 

504 As another example, Via Licensing licenses a pool of LTE SEPs on behalf 

of several licensors (i.e., the SEP holders),1505 and modem chip suppliers such as MediaTek, 

 

1502 See, e.g., Hong Deposition, Samsung, pp. 248–249 (“Q. But there are SEP holders, aside from Qualcomm, in 

the cellular industry. Is that correct? A. Sure, yes. [...] My understanding is that there are companies other 

than Qualcomm that hold standards essential patents in the cellular field.”). 

1503 

1504 

1505 Deposition of Taraneh Maghame, Senior Director of Wireless Programs and Corporate Development at Via 

Licensing, March 14, 2018, pp. 15–16 (“Maghame Deposition, Via Licensing) (“The LTE pool consists of a 

number of companies that have joined our program as licensors. In doing so, they have signed what we call a 

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Intel, Spreadtrum, HiSilicon, and Samsung have not held licenses to Via Licensing’s LTE 

patent pool.1506 MediaTek, however, is a licensor to Via Licensing’s LTE patent pool.1507 

Professor Shapiro does not explain why, if MediaTek considers SEP licenses “valuable,” it 

does not hold a license for a patent pool to which MediaTek itself is a licensor. Professor 

Shapiro also does not assess whether an exhaustive component-level SEP license from these 

parties would be more or less of a “valuable option” than an exhaustive license for Qualcomm’s 

cellular SEPs, or whether an exhaustive license for Qualcomm’s cellular SEPs would be a 

“valuable option” in the absence of exhaustive component-level licenses from other SEP 

holders. 

526. Professor Shapiro also ignores the “valuable options” modem chip suppliers have in terms of 

the range of mobile device inputs they offer OEMs. As discussed in Section III.E.2.b.i, many 

modem chip suppliers have chosen to be broadliners, i.e., they compete by developing and 

selling multiple mobile device components, such as APs, RF transceivers, GPS chips, and chips 

for non-modem connectivity (such as Wi-Fi or Bluetooth), in addition to modem chips.1508 

Broadliners generally must invest more in R&D than other modem chip suppliers to develop 

the full portfolio of products they offer, but they also have more opportunities to earn revenue 

given their broader portfolios. Furthermore, if a modem chip supplier pursuing a broad product 

line strategy decides to exit the modem chip industry, its decision may be motivated not by a 

failure to achieve profitability in selling modem chips, but rather by the opportunity to earn 

higher returns by allocating more resources to other segments of the semiconductor industry 

where it has a comparative advantage. For example, as discussed in Section V.C.13 and 

 commercialization agreement, which gives Via the ability to license all of their standard-essential patents that 

relate to LTE to third parties as part of a pool license. [...] And then, of course, as the licensing administrator 

for the patent pool, we negotiate licenses with third parties who then assign a patent license agreement, a PLA, 

whereby they get rights to all of the standard-essential patents for LTE that are owned or controlled by our 

licensors.”). 

1506 Maghame Deposition, Via Licensing, pp. 113–114 (“Q. Okay. Do you know if MediaTek is a licensee today of 

the LTE pool? A. It is not. Q. Do you know if Intel is a licensee of the LTE pool? A. It is not. Q. Do you 

know if Spreadtrum is a licensee of the LTE pool? A. It is not. [...] Q. Do you know if HiSilicon is a licensee 

of the LTE pool? A. No, it’s not. Q. Do you know if Samsung is a licensee of the LTE pool? A. No [...] it’s 

not.”). 

1507 Maghame Deposition, Via Licensing, p. 109 (“Q. [...B]y this particular addendum, MediaTek joined the Via 

LTE licensor pool. Correct? A. That’s right.”) and p. 113 (“So MediaTek, at least at this point in time, was a 

licensor, but it was not a licensee. Correct? A. That’s correct.”). 

1508 See Exhibit III.D.5. 

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Section VII.A.4, Nvidia has earned record revenues since it exited the modem chip industry, 

driven by its leadership in GPU technology. Professor Shapiro does not assess how 

relationships between modem chip suppliers and OEMs are affected by the development and 

sale of all the products in suppliers’ portfolios of mobile device inputs. 

527. In addition, Professor Shapiro offers no examples of modem chip suppliers that he claims were 

harmed by not having the “valuable option” he asserts an exhaustive license to Qualcomm’s 

cellular SEPs would have provided. Moreover, Professor Shapiro does not explain how, 

conversely, numerous modem chip suppliers have succeeded despite not having an exhaustive 

component-level license to Qualcomm’s SEPs. As discussed in Section V.D and summarized 

in Exhibit V.D.1, several modem chip suppliers have succeeded irrespective of not having an 

exhaustive component-level patent license from Qualcomm. For example: 

a. MediaTek’s strategy has, in the past, focused in part on designing modem chips 

targeted at low-end mobile devices with some features normally targeted only 

toward high-end mobile devices. MediaTek has expanded its capabilities over time 

to shift away from supplying modem chips primarily for low-end mobile devices 

toward also targeting high-end mobile devices. It also incorporated support for 

CDMA into its modem chips starting in 2015. 

b. Spreadtrum used acquisitions and strategic R&D investments effectively to focus 

on providing low-cost technology. Spreadtrum’s modem chip sales have grown 

substantially, from just under 115 million units in 2010 to over 460 million in 2017. 

c.

 

d. Samsung has strategically leveraged its fabrication capabilities in its modem chip 

manufacturing and has a long history of extensive R&D into all parts of the mobile 

device supply chain. Samsung S-LSI’s LTE modem chips have improved 

considerably over the past few years, to the point where certain of its SoCs have 

 

1509 Professor Shapiro states that HiSilicon produced its first modem chip in 2014, but he appears to be mistaken. 

See Shapiro Report, ¶ 387. As discussed in Section V.C.5, HiSilicon launched its first modem chip in 2006. 

Indeed, Professor Shapiro’s own Figure 4 and associated backup indicate HiSilicon modem chip sales for each 

year shown, i.e., 2008–2016. 

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been deemed as good as Qualcomm’s, 

e.

2. Claimed harm from “discourag[ing] investment” 

528. Professor Shapiro offers a single example where he claims that a lack of an exhaustive 

component-level SEP license from Qualcomm “discourage[d] investment” in modem chip 

supply, related to a joint venture involving Samsung and others.

1510 However, Professor 

Shapiro fails to demonstrate that the lack of an exhaustive component-level SEP license caused 

investment in modem chip development to decline in this example. Specifically, he ignores 

evidence that the joint venture likely would have been terminated even if it had obtained an 

exhaustive component-level SEP license from Qualcomm, and he ignores evidence that 

Samsung and other partners 

a. Background on the joint venture 

529. Samsung used “Dragonfly” as a code name for a joint venture it explored with NTT DoCoMo, 

Fujitsu, NEC, and Panasonic beginning in 2011.1511 

.

1512 

 

1510 Professor Shapiro asserts that, 

 Shapiro Report, ¶ 327. 

1511 See, e.g., “DoCoMo, Others to Make Smartphone Chips With Samsung: Report,” Reuters, September 12, 2011. 

See also Kim Deposition, Samsung, p. 106. 

1512 Kim Deposition, Samsung, p. 106

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1513

530. NTT DoCoMo announced in April 2012 that the joint venture agreement the partner companies 

had signed in December 2011 had been terminated “because a consensus on the details of the 

envisioned company could not be reached [...].”1514 As I discuss further below, some of the 

partners formed a new joint venture to continue carrying out their development plans. 

b. There were several reasons that the joint venture likely would have been 

terminated 

531. In asserting that “[o]ne of the key conditions for that joint venture was that it obtain a license 

from Qualcomm to sell modem chips,”1515

,

1516 and he also fails to 

discuss whether NTT DoCoMo or other joint venture partners sought licenses from other 

cellular SEP holders.1517

 

1513 Kalkman Deposition, Samsung, pp. 230–232 

nd p. 245 (

1514 “NTT DoCoMo to Dissolve Communication Platform Planning Co., Ltd.,” NTT DoCoMo Press Release, April 

2, 2012. 

1515 Shapiro Report, ¶ 327. 

1516 Hong Deposition, Samsung, pp. 137–138

). 

1517 See, e.g., Hong Deposition, Samsung, pp. 248–250 

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351 

532. Furthermore, Professor Shapiro ignores factors that explain the termination of the joint venture. 

An internal Samsung memo lists “key show stopper issues” that are independent of Qualcomm. 

1518 In addition, 

.”1519

533. Therefore, it is inappropriate to conclude that Dragonfly would have continued in Professor 

Shapiro’s counterfactual world, in which modem chip suppliers could obtain an exhaustive 

license for Qualcomm’s cellular SEPs. That is, even if the joint venture had obtained an 

exhaustive component-level SEP license from Qualcomm, there were still several reasons that 

the joint venture likely would have been terminated. 

c. Partners in the joint venture continued to invest in modem chip development 

534. Moreover, even if Dragonfly had continued in Professor Shapiro’s counterfactual world, 

notwithstanding the reasons it likely would have been terminated independent of Qualcomm 

discussed above, it would also be inappropriate to conclude that investment in modem chip 

development would have been any greater in that counterfactual world than it was in the actual 

world. This is because, in the actual world, the joint venture partners continued their modem 

chip development efforts after Dragonfly was terminated. 

535. Four months after the Dragonfly joint venture agreement was terminated, NTT DoCoMo, 

Fujitsu, and NEC formed a new joint venture called Access Network Technology Ltd., with 

 

1518 SFT-0036334–6336 at 6334–6335, memo titled “S.LSI Strategic Growth Development (SGD) Weekly 

Highlights,” Samsung, March 24, 2012. 

1519 SFT-0036334–6336 at 6335, memo titled “S.LSI Strategic Growth Development (SGD) Weekly Highlights,” 

Samsung, March 24, 2012

 SFT-0036334–6336 at 6335, memo titled “S.LSI Strategic Growth Development 

(SGD) Weekly Highlights,” Samsung, March 24, 2012. 

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the same modem chip development objectives as the former Dragonfly.1520 NTT DoCoMo 

and Qualcomm appear to have been on good terms at this point.1521 Over the next 18 months, 

Access Network Technology developed modem chips that were used in some Fujitsu 

smartphones. However, after failing to establish a substantial customer base, in part due to 

competition from MediaTek in the low-cost segment in China, the joint venture decided to exit 

the modem chip industry.1522

536.

.

1523 More generally, as discussed in Section 

V.C.4, Samsung had developed its first LTE modem chip by 2010,1524 and it continued to make 

improvements to its LTE modem chips thereafter. Samsung released its first SoC in 2015,1525

and by 2017, some analysts deemed certain Samsung SoCs to be as good as certain Qualcomm 

 

1520 “Qualcomm Will Battle Asian Chip Makers For China’s Smartphone Market,” Forbes, August 6, 2012 (“Of the 

original five that had initially come together last year, only Fujitsu, NTT DoCoMo and NEC Corp agreed to 

create a new collaboration named Access Network Technology Ltd., with Samsung and Panasonic dropping off. 

However, the idea still remains the same – to develop home-grown mobile chipsets and reduce dependence on 

foreign players such as Qualcomm. While the focus initially will be on the Japanese market, Fujitsu hopes to 

expand internationally and capture 7% of the global market share of smartphone chips by 2014.”). 

1521 QAPPCMSD10052361, Email from Satoru Adachi, NTT DoCoMo, to Jeff Altman, Qualcomm, April 1, 2012 

(“I’m really appreciate [sic] your cooperation and effort so far to achieve a new and good relationship between 

Qualcomm and DOCOMO.”). 

1522 “Fujitsu, DoCoMo, NEC Abandon Development of Smartphone Chips,” Nikkei Asian Review, February 27, 

2014 (“Taiwanese chipmaker MediaTek supplies low-cost chips for the affordable smartphones sweeping 

across China, boosting its market share. Fujitsu smartphones used Access Network Technology’s chips for a 

time, but the venture was unable to cultivate a customer base either at home or abroad. Its current global market 

share is believed to be close to zero.”). 

1523 SFT-0036334–6336 at 6335, memo titled “S.LSI Strategic Growth Development (SGD) Weekly Highlights,” 

Samsung, March 24, 2012. See also Hong Deposition, Samsung, pp. 250–251 

1524 Professor Shapiro asserts that the LTE modem chips Samsung sold in 2010 were for data cards only, but he 

appears to be mistaken. Shapiro Report, n.131 (“[T]hese early Samsung LTE modems were LTE-capable 

dongles, which are USB devices enabling a personal computer to access a wireless network, as opposed to 

modem chips for handsets [...].”). As indicated in Exhibit V.B.7, Samsung launched its Craft handset, with 

self-supplied LTE modem chips, in 2010. 

1525 Cunningham, Andrew, “Samsung’s New Exynos 8 SoC Includes an LTE Modem and Its First Custom CPU”, 

Ars Technica, November 12, 2015 (“[...T]oday Samsung has announced its next-generation Exynos 8 SoC, the 

Octa 8890 [...] Samsung is integrating an LTE modem into the chip for the first time [...].”). 

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Snapdragon 800 series SoCs.1526 Samsung also introduced at least two SoCs supporting 

CDMA in 2018, and Samsung S-LSI has been Samsung’s largest modem chip supplier since 

2017.1527

537. Even if Dragonfly had continued, Samsung’s investment in the joint venture would have been 

minimal. 

1528 

 

. 1530 

 

1526 Shah, Agam, “Beyond Smartphones, Samsung Wants Its Exynos 9 Chip in VR Headsets,” Computerworld, 

March 1, 2017 (“On paper, the Exynos 8895 chip is as good as the Snapdragon 835, and better than MediaTek’s 

Helio X30.”). 

1527 Frumusanu, Andrei, “Meizu Announces M6s with Exynos 7872,” AnandTech, January 17, 2018 (“This is also 

the first time we’ve seen an Exynos SoC released with integrated CDMA capability [...].”); Frumusanu, Andrei, 

“Samsung Announces the Galaxy S9 and S9+,” AnandTech, February 25, 2018 (“Indeed the Exynos 9810’s 

new modem supports CDMA.”); “Mobile Processor Exynos 7 Series (7885),” Samsung (“The modem supports 

multi-modes from 2G to 4G including CDMA [...]”); Exhibit IV.B.3, Exhibit V.B.2, and Exhibit V.C.14c. 

1528 SFT-0036334–6336 at 6335, memo titled “S.LSI Strategic Growth Development (SGD) Weekly Highlights,” 

Samsung, March 24, 2012. 

1529 . Exhibit CX2628, Hong Deposition, 

Samsung, SFT-0036341–6382 at 6348–6349, 6351.

. See “Treasury Reporting Rates of Exchange As of December 31, 2011,” U.S. 

Department of the Treasury, available at 

https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/1211.pdf. See also “NTT DoCoMo to Dissolve 

Communication Platform Planning Co., Ltd.,” NTT DoCoMo Press Release, April 2, 2012 (“[...T]he company 

signed [the joint venture agreement] with Fujitsu Limited, Fujitsu Semiconductor Limited, NEC Corporation, 

Panasonic Mobile Communications Co., Ltd. and Samsung Electronics Co., Ltd. in December 2011”). 

. 

1530 

nt. Exhibit 

CX2628, Hong Deposition, Samsung, at 6349, 6351

ee “Treasury Reporting Rates of Exchange As of December 31, 2011,” 

U.S. Department of the Treasury, available at 

https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/1211.pdf. See also “NTT DoCoMo to Dissolve 

Communication Platform Planning Co., Ltd.,” NTT DoCoMo Press Release, April 2, 2012 (“[...T]he company 

signed [the joint venture agreement] with Fujitsu Limited, Fujitsu Semiconductor Limited, NEC Corporation, 

Panasonic Mobile Communications Co., Ltd. and Samsung Electronics Co., Ltd. in December 2011”). 

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1531

C. Claimed anticompetitive effects of Qualcomm’s “exclusive dealing” agreements 

with Apple 

538. Given his theory concerning Qualcomm’s “exclusive dealing” agreements with Apple, 

Professor Shapiro claims that Qualcomm weakened its modem chip rivals.1532 However, he 

does not establish that Apple’s agreements with Qualcomm caused any modem chip supplier 

to be foreclosed from Apple or other customers. 

1. Broadcom and ST-Ericsson 

539. Professor Shapiro suggests that Broadcom and ST-Ericsson exited the business of supplying 

modem chips “in response” to Apple’s signing various agreements with Qualcomm in 2013.1533 

However, there are several problems with his assertion. 

 As discussed above, I have shown that Broadcom’s and ST-Ericsson’s outcomes 

are fully explained by industry factors. 

. 

Professor Shapiro’s approach thus erroneously attributes the effects of these industry factors 

to those agreements. 

 

1531 See Exhibit III.E.2. See also Exhibit III.E.1. Data on Samsung’s modem chip-related R&D are not available. I 

note that Broadcom’s 2012 mobile and wireless R&D, for example, was approximately $1 billion, compared to 

approximately $2.3 billion firm-wide. Renesas had the lowest modem chip-related R&D in 2012 among all 

modem chip suppliers shown in Exhibit III.E.1, with mobile SoC R&D of approximately $100 million. 

1532 Professor Shapiro asserts that certain agreements between Apple and Qualcomm “created a powerful incentive 

for Apple not to use non-Qualcomm modem chips in any new Apple device” and that this “provided a strategic 

benefit to Qualcomm, namely the weakening [of] its modem-chip rivals, especially Intel.” Shapiro Report, ¶ 9. 

See also Shapiro Report, Section V.E. 

1533 Shapiro Report, ¶ 366. 

1534 Shapiro Report, ¶¶ 256, 366, citing Investigative Testimony of Tony Blevins, Apple, January 28, 2016. 

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541.

 

 

1535 Zander Deposition, Ericsson, pp. 194–196

1536 

 See also Section V.C.6 and 

Section VII.A.5 above; Zander Deposition, Ericsson, pp. 196–197

). 

 

See also Section V.C.6 and 

Section VII.A.5 above. 

1538 

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. 

542.

 

 

543. Second, as I discuss below, Professor Shapiro suggests that Apple would have chosen Intel 

rather than Qualcomm for at least some of its mobile devices released between 2014 and 2016 

 

1539 

 See also Section V.C.8 and Section VII.A.2 above. 

1540 

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357 

in his counterfactual world. Specifically, Professor Shapiro asserts that, absent Apple’s 2013 

agreements with Qualcomm, “[s]ome” of Apple’s 2014–2016 iPad models “most likely” 

would have used Intel modem chips, and this “could well have led” Apple to source modem 

chips from Intel for an iPhone prior to 2016 as well.1541 However, as discussed in Section V 

and summarized below, Qualcomm’s design wins over Intel with Apple were based on the 

superiority of Qualcomm’s modem chips, which would also have been the case absent 

Qualcomm’s alleged exclusionary conduct. In any case, to the extent Professor Shapiro is 

concluding that Apple would have sourced modem chips only from Intel and Qualcomm absent 

Apple’s 2013 agreements with Qualcomm, his conclusion implies that Apple would not have 

sourced modem chips from either Broadcom or ST-Ericsson in the counterfactual world. Thus, 

to the extent Broadcom and ST-Ericsson exited the modem chip industry in part because Apple 

did not choose them as modem chip suppliers in the actual world, they also would have exited 

in the counterfactual world absent Apple’s 2013 agreements with Qualcomm, as Apple also 

would not have chosen them as modem chip suppliers in that counterfactual world either. 

544. Third, as discussed in Section IV, Apple typically sources modem chips from one or two 

suppliers, driven by its strategic decision to focus on a small portfolio of highly customized 

mobile devices. This is an industry factor that also would have been present in the 

counterfactual world absent Qualcomm’s alleged exclusionary conduct. Therefore, to the 

extent Professor Shapiro is concluding that, instead of Apple’s sourcing only from Intel and 

Qualcomm, Apple could source modem chips from each of Qualcomm, Broadcom, STEricsson, and Intel in the counterfactual world, that conclusion does not make sense. Even if 

Apple had chosen not to use Qualcomm modem chips for any of its 2013–2014 and subsequent 

mobile devices, the evidence is inconsistent with Apple’s sourcing modem chips from all of 

the other three modem chip suppliers. Hence, even if Apple had determined that all three 

suppliers could supply modem chips meeting its requirements, contrary to the evidence above 

for Broadcom and ST-Ericsson and contrary to the evidence below for Intel, one or more of 

them would nonetheless have failed to supply Apple with modem chips. Moreover, Professor 

Shapiro suggests that Apple would have sourced modem chips from Intel for at least some of 

its mobile devices. Thus, to the extent ST-Ericsson and Broadcom exited the modem chip 

 

1541 Shapiro Report, ¶ 365. 

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358 

industry in part because Apple did not choose them as modem chip suppliers in the actual 

world, at least one of them would have exited in the counterfactual world absent Apple’s 2013 

agreements with Qualcomm, as Apple also would not have chosen at least one of them as a 

modem chip supplier in that counterfactual world either. 

2. Intel 

545. Professor Shapiro claims that Intel was excluded from supplying modem chips to Apple by 

Qualcomm’s “exclusive dealing” agreements with Apple.1542 However, his claims have a 

number of flaws. 

546. First, as discussed in Section V.B, Qualcomm’s design wins have been based on the superiority 

of its modem chips. Moreover, as discussed in Section V.C.2 and summarized in Exhibit V.D.1, 

Intel had a number of problems with foresight, inefficient investment, and execution that 

substantially impaired its success with mobile device OEMs. These factors would also have 

been present in a counterfactual world where Qualcomm’s alleged “exclusive dealing” 

agreements were not in place. Therefore, Professor Shapiro has no basis to claim that Apple 

would have chosen to use Intel modem chips earlier than it actually did absent those 

agreements. 

547. Professor Shapiro asserts specifically that 

 

 

 

1542 Professor Shapiro asserts that Apple’s “exclusive dealing” agreements with Qualcomm “provided a strategic 

benefit to Qualcomm, namely the weakening [of] its modem-chip rivals, especially Intel” and that “[e]xclusion 

from Apple denied Intel scale” and “weakened Intel’s incentives to invest in modem development,” such that 

“Intel could not compete as effectively for the business of other OEMs.” Shapiro Report, ¶¶ 9, 369, and 384. 

1543 Shapiro Report, ¶ 362. 

1544 Shapiro Report, ¶ 362. 

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359 

 

548.

 Furthermore, some at Apple indicated that Intel’s ability to meet Apple’s 2015 

requirements was also uncertain, as Intel’s “7292 [i]s the next possible intercept point, for 2015 

products, but this emphasizes the importance of intra-band carrier aggregation which is still 

TBD in I[ntel]’s own technical investigations.”1548

549.

 

 

1546 APL-QC-FTC_12123224–3226 at 3224, email from Steve Schell, Apple, January 31, 2013. See also Apple 

Inc.’s First Supplemental Responses to Interrogatory Nos. 1, 6, 7, 11, and 21 of Qualcomm Incorporated’s First 

Set of Interrogatories, January 5, 2018, p. 8. 

1547 APL-QC-FTC_01197513–7514 at 7513, email from Steve Schell, Apple, January 31, 2013. See also Apple 

Inc.’s First Supplemental Responses to Interrogatory Nos. 1, 6, 7, 11, and 21 of Qualcomm Incorporated’s First 

Set of Interrogatories, January 5, 2018, pp. 8, 24; “Qualcomm Third Generation LTE Chipsets Are First to 

Support HSPA+ Release 10, LTE Advanced with LTE Carrier Aggregation,” Qualcomm Press Release, 

February 27, 2012 (announcing that Qualcomm’s MDM9225 would begin sampling in the fourth quarter of 

2012 and would support carrier aggregation). 

1548 APL-QC-FTC_12123224–3226 at 3225, email from Steve Schell, Apple, January 31, 2013. 

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360 

 

 

550. In fact, as discussed in Section III.E.1.a, 

 Others in the 

industry have made similar statements. For example, in a 2013 article on Paul Otellini, Intel’s 

outgoing CEO at the time, Magnus Hyde, a former TSMC executive, was quoted as saying that 

“Intel is still suffering with the inability [...] to enter a new major segment that changes the 

game,” and that this would “probably be a problem going forward.”1553 Similarly, as discussed 

in Section V.C.2, Mr. Otellini was quoted as saying that it “took a while to move the machine” 

at Intel in terms of being “able to build chips for $10 and sell a lot of them.”1554 Mr. Otellini 

also related that, years earlier, he had decided against pushing Intel to win the opportunity to 

supply Apple when it was developing the first iPhone: 

 

1549 Shapiro Report, ¶ 362, citing APL-QC-FTC_00389948 and APL-QC-FTC_00364563. 

1550 Shapiro Report, ¶ 362, 

1551 Shapiro Report, ¶ 362. 

1552 APL-QC-FTC_12123224–3226 at 3224, email from Steve Schell, Apple, January 31, 2013. 

1553 Madrigal, Alexis C., “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, 

May 16, 2013. 

1554 Madrigal, Alexis C., “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, 

May 16, 2013. 

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361 

We ended up not winning it or passing on it, depending on how you want to view it. 

[...T]here was a chip that they were interested in that they wanted to pay a certain price 

for and not a nickel more and that price was below our forecasted cost. I couldn’t see 

it. [...] And in hindsight, the forecasted cost was wrong and the volume was 100x 

what anyone thought.1555

551. Second, in claiming that Intel “could not compete as effectively for the business of other OEMs” 

as a result of Qualcomm’s alleged “exclusive dealing” agreements with Apple,1556 Professor 

Shapiro ignores other factors that would have impaired Intel’s ability to compete in a 

counterfactual world absent those agreements. For example, even if Apple had chosen to use 

Intel’s modem chips in some of its 2014 mobile devices in that counterfactual world, despite 

its numerous concerns discussed above, other OEMs may still have had the same concerns 

when considering Intel’s modem chips. Professor Shapiro does not explain how Intel could 

have competed effectively for sales to other OEMs given issues such as uncertainty in its ability 

to meet its development milestones and lack of support for carrier aggregation. His suggestion 

that Apple, other OEMs, or consumers would have been better off given such issues is mere 

speculation.1557

552. As another example, as discussed in Section V.C.2, Intel canceled its SoFIA line of SoCs in 

2016 after its lengthy development and eventual release in 2015 of its SoFIA 3G and 3G-R 

SoCs.1558 

 

1555 Madrigal, Alexis C., “Paul Otellini’s Intel: Can the Company That Built the Future Survive It?,” The Atlantic, 

May 16, 2013. 

1556 Shapiro Report, ¶ 384. 

1557 Shapiro Report, ¶ 384 (“Because Intel was weakened as a rival to Qualcomm by Qualcomm’s agreements with 

Apple, Intel could not compete as effectively for the business of other OEMs. [...] These OEMs were harmed 

by the lack of viable alternative suppliers of Premium LTE Modem Chips during this period of time.”). 

1558 Eassa, Ashraf, “Intel Corporation’s Most Disappointing Product in 2015,” The Motley Fool, December 22, 

2015 (“The only integrated applications processor and modem products that Intel brought to market this year 

were chips known as SoFIA 3G [...] and SoFIA 3G-R.”); Hruska, Joel, “SoFIA Later: Intel Kills Upcoming 

Smartphone and Tablet Hardware,” ExtremeTech, April 29, 2016 (“The entire SoFIA project is canceled, in all 

flavors [...]. We reached out to Intel, which confirmed the news: SoFIA 3GX, SoFIA LTE, SoFIA LTE2, and 

Broxton have all been canceled.”). 

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362 

.

1559 Having no SoC to offer, as was the case for Intel except for its 3G 

products in 2015 and 2016, limits a modem chip supplier’s potential customers, as few mobile 

device OEMs other than Apple demand thin modems. Professor Shapiro acknowledges that, 

“[b]ecause Intel [...] was focused on thin modems and did not have a high-end SOC option, 

Intel could not immediately turn to customers who required SOCs,”1560 but he then contradicts 

himself by suggesting that Intel could indeed have turned to and even “compete[d] [...] 

effectively for the business” of such customers absent Qualcomm’s alleged “exclusive dealing” 

agreements with Apple, despite having no SoC to offer.1561

553. Third, in claiming that Intel’s “incentives to invest in modem development” were weakened as 

a result of Qualcomm’s alleged “exclusive dealing” agreements with Apple,1562 Professor 

Shapiro ignores that Intel has typically invested a comparable amount to Qualcomm in 

R&D.1563 However, as discussed in Section III.E.2.b.ii and Section V.C.2, while Intel has 

invested billions of dollars in acquiring companies with modem chip products and in its own 

R&D, its investments have tended to be inefficient in that they have led to the successful 

development of fewer products compared to its competitors’ efforts. 

554. Fourth, Professor Shapiro asserts that “[s]upplying modem chips to Apple’s [...] latest flagship 

handsets provides a modem chip supplier significant financial and strategic benefits,” 

including “learn[ing] directly from engaging with the engineering teams at Apple [...].”1564 

 

1559 See, e.g.,

 See also Intel, 

Press Release, “Intel is Accelerating the 5G Future,” February 21, 2017 (“Intel is at the forefront of this 

revolution, accelerating the path to 5G in collaboration with our customers and partners in the industry [...]. 

Intel’s portfolio brings a unique advantage to the acceleration of 5G.”); Exhibit QX93, Evans Deposition, Intel, 

INTEL-QCOM002458604, p. 33 (“iCDG PGBP Summary[:] 5G – LEAD, End to End is Intel’s advantage ... 

[.]”). 

1560 Shapiro Report, ¶ 368. 

1561 Shapiro Report, ¶ 384. 

1562 Shapiro Report, ¶ 369. 

1563 See Exhibit III.E.1, Exhibit III.E.2, and Section III.E.2.b.ii. 

1564 Shapiro Report, ¶ 42. 

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363 

However, Professor Shapiro ignores that modem chip suppliers can engage directly with 

engineering teams at Apple without supplying modem chips to Apple, as is clear from his 

discussions of Intel’s interactions with Apple prior to its design wins with Apple. Moreover, 

as discussed in Section V.C.2, Intel has engaged with and learned from other OEMs. 

 

.

1566 

Furthermore, even if Intel could have obtained benefits from supplying thin modems to Apple 

that it could not have obtained through all of these other interactions, those benefits may have 

been of limited value to Intel in terms of achieving other design wins, as other OEMs primarily 

demand SoCs, which, as discussed above, Intel has not developed successfully beyond its 3G 

SoCs that were available in 2015 and 2016 only. 

 

 

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D. Claimed barriers to entry 

555. Professor Shapiro asserts that Qualcomm’s alleged exclusionary conduct represents a barrier 

to entry into modem chip supply.1567 He also suggests that a number of other barriers to entry 

exist.1568 His discussion of barriers to entry is flawed for at least the following two reasons. 

556. First, and generally, Professor Shapiro does not differentiate between barriers to de novo entry 

into the modem chip industry and entry into his claimed CDMA and “premium” LTE modem 

chip markets by existing modem chip suppliers. This is an important distinction when 

evaluating barriers to entry into these claimed markets. For example, in asserting that “the full 

value of CDMA is only realized with complementary multi-mode technology, backwards 

compatibility, and advanced LTE,” such that “an investment in CDMA requires 

contemporaneous development of complementary technologies,” 1569 Professor Shapiro 

ignores that incumbent modem chip suppliers may already have developed such 

“complementary technologies.” Such modem chip suppliers would not face incremental costs 

to developing those “complementary technologies,” and this claimed barrier to entry would 

therefore not exist for such modem chip suppliers. Similarly, Professor Shapiro asserts that 

“an entrant into the market for Premium LTE Modem Chips would need to make a substantial 

investment in research and development.”1570 However, as discussed in Section III.E.2.b.ii, 

numerous companies have already made the required investments, and continue to make the 

investments needed to develop new products. These companies include Intel, Samsung, and 

Huawei, each with firm-wide R&D of more than $13 billion in 2017, more than twice as much 

as Qualcomm’s firm-wide R&D in 2017 of $5.5 billion.1571

557. Second, Professor Shapiro ignores the large number of firms that have entered his claimed 

markets. Such entry indicates that firms have overcome his claimed barriers to entry, which 

calls into question the existence or at least the magnitude of those claimed barriers to entry. 

 

1567 Shapiro Report, ¶¶ 220–221, 257–258. 

1568 Shapiro Report, ¶¶ 217–219, 249–256. 

1569 Shapiro Report, ¶ 218. 

1570 Shapiro Report, ¶ 249. 

1571 See Exhibit III.E.2. 

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365 

For example, Professor Shapiro suggests that firms could be deterred from developing CDMA 

modem chips because “CDMA specifications are poorly documented,”1572 but he ignores that 

many modem chip suppliers appear to have interpreted and implemented that documentation 

successfully. In particular, by including only 2008 through 2016 in his figure showing CDMA 

sales volumes, Professor Shapiro ignores modem chip suppliers that developed CDMA modem 

chips outside that period, including Samsung, Intel, and HiSilicon. By 1999, nine modem chip 

suppliers had developed modem chips supporting cdmaOne, and by 2004, five modem chip 

suppliers had developed modem chips supporting CDMA2000. As of 2018, five modem chip 

suppliers have developed LTE/CDMA2000 multi-mode modem chips.1573

558. Furthermore, as discussed in Section V.B.1.c, there has frequently been considerable 

uncertainty in the industry regarding the future of CDMA due to, for example, the relatively 

small subscriber base,1574 fluctuating sales forecasts,1575 and ambiguity from carriers.1576 Due 

in part to these factors, some modem chip suppliers have made strategic decisions, 

independently of any claimed barriers to entry, not to prioritize CDMA development.1577 

 

1572 Shapiro Report, ¶ 217. 

1573 See Exhibit V.B.2. 

1574 “Cellular Handset & Chip Markets,” Forward Concepts, 2011, p. 43 (“CDMA2000 clearly is a viable and 

effective wireless technology and, to its credit, many of its innovations were brought to market ahead of 

competing technologies. Today, however, the GSM family has in excess of 3.8 billion subscribers – nine times 

the total number of subscribers in the CDMA2000 family of technologies.”). 

1575 See Exhibit V.B.4. 

1576 See, e.g.,

1577 See, e.g., Ristelhueber, Robert, “Philips Throttles Back on CDMA Business to Focus on GSM, GPRS,” EE 

Times, September 21, 2001 (“Philips will also stop developing standard chipsets for CDMA handsets, and focus 

its efforts on the GSM and GPRS cellular standards, said Ivo Rutten, vice president and general manager of BL 

Cellular Americas at Philips, Sunnyvale, Calif. [...] Rutten said GSM represented a better opportunity for the 

company. ‘It’s a bigger market and we’ve already got a significant market share there.’”). See also LaPedus, 

Mark, “Intel Backs Away from CDMA Chip Market,” EE Times, August 25, 2000 (“Instead of CDMA, Intel 

will focus more on developing and selling cell-phone chip sets for other digital-cellular standards, such as 

TDMA [...], PDC [...], and third-generation (3G) wireless, according to Ronald Smith, vice president and 

general manager of Intel’s Wireless Communications and Computing Group. [...] Smith added that Intel is 

more bullish on a next-generation CDMA standard called W-CDMA, which is being endorsed by Motorola, 

Nokia, NTT, and other large OEMs and carriers.”). 

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366 

Therefore, absent these factors, even more modem chip suppliers may have developed CDMA 

solutions. 

559. As another example, Professor Shapiro himself acknowledges that there has been considerable 

entry into his claimed “market for Premium LTE Modem Chips,” stating that Samsung, 

HiSilicon, Intel, and MediaTek all entered that claimed market between 2014 and 2016.1578

E. Professor Shapiro acknowledges the importance of industry factors 

560. In several places in his report, Professor Shapiro appears to acknowledge that industry factors 

unrelated to Qualcomm’s alleged exclusionary conduct are important determinants of industry 

outcomes. However, his discussion of industry outcomes fails to account for these industry 

factors, and he instead attributes those outcomes, without basis, to Qualcomm’s alleged 

exclusionary conduct. 

561. For example, as discussed in Section III.E.1, rewards can be high for first movers in the modem 

chip industry. Professor Shapiro appears to agree, stating that “Qualcomm enjoyed a 

significant first-mover advantage in the sale of LTE chips,” that, “at the time of the transition 

to LTE and in the two years after, Qualcomm possessed a one-to-two year lead on premium 

LTE features,” and that this “conferred a competitive advantage on Qualcomm.”1579

562. As another example, as discussed in Section IV.C.2, the increasing self-supply of modem chips 

by Samsung and Huawei has important implications for the success of modem chip suppliers 

that are not vertically integrated, because it diminishes these OEMs’ sourcing from other 

modem chip suppliers. Professor Shapiro likewise states that “Qualcomm faced competition 

from Samsung’s Galaxy S4 largely from Samsung’s own LTE solutions,” and he cites 

.

1580 As discussed in Section III.D.2, Xiaomi also recently released its own modem chip 

and appears to be developing another. This suggests that the trend toward vertical integration 

of OEMs into the supply of modem chips may continue, resulting in further competitive 

 

1578 Shapiro Report, ¶ 223. 

1579 Shapiro Report, ¶¶ 232–234. 

1580 Shapiro Report, ¶¶ 186–187. 

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367 

pressures such as those noted by Professor Shapiro but ignored by him in explaining industry 

outcomes. 

563. In addition, as discussed in Section III.F, success in the modem chip industry at a point in time 

does not guarantee continued success in itself, in that current leaders must continue to innovate 

to stay ahead. Professor Shapiro’s discussion of entry into his claimed “market for Premium 

LTE Modem Chips” illustrates this notion that even leading modem chip suppliers face 

continuous competitive threats. In particular, he states that “Qualcomm’s share of Premium 

LTE Modem Chips decreased in 2015 and again in 2016 as Samsung, Intel, and MediaTek 

increased their volumes of premium LTE chips” and that this “entry by rivals MediaTek, Intel, 

and Samsung led to downward pressure on Qualcomm’s prices – including in Premium LTE 

Modem Chips.”1581

564. The foregoing examples demonstrate that Professor Shapiro himself acknowledges the 

explanatory power of industry factors on industry outcomes. However, as discussed 

throughout this section, Professor Shapiro fails to account for industry factors in his discussion 

of industry outcomes. His conclusions in support of Plaintiff’s Hypothesis therefore cannot be 

accepted. 

F. Conclusion 

565. Professor Shapiro has provided no basis for his conclusion that Qualcomm’s alleged 

exclusionary conduct has caused anticompetitive effects on modem chip supplier outcomes. 

He has failed to undertake an analysis that isolates potential anticompetitive effects from the 

effects of industry factors, he has provided no empirical evidence to support his conjectures, 

and he has disregarded evidence contrary to his conclusions. 

566. Professor Shapiro’s conclusions are also contradicted by the evidence. As my analyses have 

demonstrated, when firms have exited the modem chip industry, their exits have been fully 

explained by industry factors and those firms’ own strategic decisions, not by Qualcomm’s 

alleged exclusionary conduct. More generally, when firms have demonstrated poor foresight, 

inefficient investment, and/or weak execution, they have had limited success, while firms that 

 

1581 Shapiro Report, ¶¶ 183–185. 

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368 

have consistently demonstrated strong foresight, efficient and targeted investment, and 

effective execution have succeeded. 

567. Moreover, Professor Shapiro’s conclusions are contradicted by the performance of the modem 

chip industry. As discussed in Section VI, the modem chip industry has performed remarkably 

well in terms of rapid innovation, declining prices, and increased levels of consumer surplus. 

This performance corroborates my conclusion that Professor Shapiro’s claims of 

anticompetitive effects are not supported. 

___________________________ 

Edward A. Snyder 

June 28, 2018 

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EDWARD A. SNYDER

CONTACT INFORMATION: 

email: tsnyder@yale.edu

regular mail: express mail:

 Yale School of Management Yale School of Management

 P.O. Box 208200 165 Whitney Avenue 

 New Haven, CT 06520-8200 New Haven, CT 06520 

office tel.: 203-432-6037 website: http://edwardasnyder.com/ 

EDUCATION

B.A., Colby College, 1975 (Economics, Government)

M.A., University of Chicago, 1978 (Public Policy)

Ph.D., University of Chicago, 1984 (Economics)

CURRENT APPOINTMENTS (July 2011 to present; on partial sabbatical leave from August 2017 to July 2018) 

Yale School of Management

Indra K. Nooyi Dean 

William S. Beinecke Professor of Economics and Management

Yale Department of Economics

Professor of Economics (Secondary Appointment)

Major research interests: Industrial Organization, Antitrust Economics, Law and 

Economics, Financial Institutions.

Decanal Responsibilities: 

Overall academic, financial, and administrative leadership of Yale School of 

Management; 

Member of the Yale University Cabinet (2013 – 2017); 

Member of Yale University Cabinet Steering Committee (2016 - 2017); 

Chair, Steering Committee, Global Network for Advanced Management (2012 to 

Present);

Member of the Yale School of Management Board of Advisors (2011 to present); 

APPENDIX A

Curriculum Vitae

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 Member of Yale SOM’s Appointments, Curriculum, and Strategy Committee (2014 

– 2017); and 

 Member of Yale University Carbon Task Force (2015 - 2016). 

Teaching: 

o “Analysis of Global Competition Law” (co-taught with Pierre Cremieux and Fiona 

Scott Morton); Fall 2013. 

o “Field Project in Commercial Real Estate Development: Yale Golf Course” (co- taught with Roland Betts); Fall 2015. 

 Major achievements and initiatives: o Conception and development of the Global Network for Advanced Management

(GNAM), a network of 32 top business schools. 

o Conception and introduction in 2012 of the Master of Advanced Management – a 

one-year degree program, post-MBA, for students from GNAM member schools. 

o Introduction in 2017 of Master of Management Studies, a one-year degree 

program with multiple tracks of study. o Introduction of Global Studies Requirement and Global Studies Accounts for all 

MBAs and MAM students. o New Leadership Curriculum for all MBAs and MAM students. o Establishment of the Initiative for Organizational Performance. 

o Development and introduction of Foundational Courses for Yale Master-level 

students and Yale College students. o Build-out of Yale SOM’s Entrepreneurship Program and appointment of 

Inaugural Director of Entrepreneurship Programs. o Appointment of Yale SOM’s first Director of Community and Inclusion. 

o Substantial increase in scholarship support for Masters-level students. 

o Central role in establishment of Yale Center Beijing in 2014 and responsible for 

subsequent management of the Center. 

o Establishment of the Yale SOM Council of Global Advisors. 

o Launch of school-wide initiatives on Asset Management, Healthcare, and 

Sustainability. 

o Increased levels of alumni involvement; the highest percentage of annual giving 

by alumni of any Yale academic unit. 

o Six consecutive years of operating surpluses (FY2012-FY2017). 

o Improvements in the influence, visibility, and recognition of Yale SOM.

PREVIOUS APPOINTMENTS

University of Chicago, Booth School of Business 

Dean, University of Chicago Booth School of Business (July 1, 2001 to June 30, 2010); George 

Shultz Professor of Economics (July 1, 2001 to June 30, 2011). 

Decanal Responsibilities: Overall academic, financial, and administrative leadership of 

the school. 

Teaching responsibilities: Economic Analysis of Major Policy Issues (co-taught with 

Gary S. Becker and Kevin M. Murphy). 

Editor: Journal of Law & Economics (2002 – 2009) 

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 Major achievements and initiatives: 

o Dramatic increases in the number of endowed faculty professorships, endowed 

faculty fellowships, and the endowments in research and teaching centers.

o Nine years of 17.1% annual growth of MBA scholarship support. 

o Naming of the school with unrestricted funds provided by David Booth – the 

largest gift ($300m) to the University of Chicago and the largest gift ever to a 

business school. 

o Increased the school’s endowment from approximately $200m in 2001 to over 

$500m, independent of the Booth gift. 

o Substantial improvements in the influence, visibility, and recognition of the 

school, including improved rankings, e.g., BusinessWeek #1 rankings in 2006, 

2008, and 2010, and Economist #1 rankings in 2006 and 2009. 

o Improvements in the quality and diversity of the MBA classes.

o Large increases in support for PhD students, including dramatic increases in 

endowment for PhD program. 

o Established the Global Advisory Board, with Councils for Asia; the Americas; 

and Europe, Middle East, and Africa.

o Oversaw the launch of the Initiative on Chicago Price Theory, which became the 

Becker Center.

o Developed funding for the Fama-Miller Center. 

o Successfully moved the School’s Europe Campus from Barcelona to London. 

o Moved into the school’s new campus (Harper Center) in Hyde Park on time and 

on budget. 

o Developed first-of-kind positioning advertising campaign by a business school.

o Appointments of two women to decanal positions. 

o Elimination of debt on three facilities.

o Cumulative operating surpluses of $100.4m over nine-year period. 

Service to the University: 

o Member, Academic Leadership Group, July 2001 – June 2010. 

o Oversight Responsibilities for two University Centers (Stigler Center and Becker 

Center). 

o Member, Provost Ad Hoc Tenure Review Committees, 2002 – 2010. 

o Member, Board of Directors, Argonne National Laboratories, July 2008 – June 

2010. 

o Member of various Dean and VP Search Committees, 2003 – 2009. 

o Advisory work on University’s globalization efforts, 2007 – 2010. 

o Member, Social Sciences Deans Group, 2009 – 2010. 

University of Virginia

Dean and Charles C. Abbott Professor of Business Administration (July 1998 – June 2001) 

Decanal Responsibilities: Overall academic, financial, and administrative leadership of 

the Darden School.

 Major achievements and initiatives: 

o First MBA Program growth in 24 years. 

o Increase in nine-year capital campaign from $98m to $212m. 

o Establishment of Batten Institute in 1999. 

o Established Financial Self-Sufficiency for the Darden School, eliminating 

reliance on unrestricted state support.

o Completion Phase II of new Darden Grounds. 

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o Increased diversity of MBA classes.

o Appointments of two women to decanal positions. 

o Appointments of two African-Americans to faculty positions. 

o Innovative programs on e-business with global partners. 

o Established program partnerships with University of Michigan and University of 

California at Berkeley. 

University of Michigan

Senior Associate Dean, University of Michigan Business School (1995-1998) 

Responsibilities: MBA Programs (full-time, evening, global); BBA Program, and 

Masters of Accounting Program. Managed many of the School’s international 

programs and corporate relationships. Oversight of Admissions & Student Services 

and the Office of Career Development. Significant responsibility for faculty 

recruitment and development. Member of School’s Executive Committee. 

 Major achievements and initiatives: 

o Global initiatives including International Multi-disciplinary Action Program 

(IMAP) and Brazil node of Global MBA program. 

o Integration of admissions and career development functions. 

o Rationalization of real estate curriculum.

Director, Davidson Institute at the University of Michigan Business School (1992-1995) 

Responsibilities: Executive and academic leadership to establish a legally-independent 

Institute focused on business and public policy issues in transition economies and 

emerging markets. 

 Major achievements and initiatives: 

o Developed corporate relationships in China, Central Europe, India, and Russia, 

and with U.S. firms committed to operating in transition economies. 

o Major research initiative on bank privatization in Central Europe and Russia. 

o Design and development of in-company projects involving teams of Master’s 

level students working in transition economies. 

o Design and delivery of executive education programs for managers from 

transition economies. 

o Progressive increases in outside funding contributing to a $3m quasi-endowment 

for the Institute.

Chair, Business Economics and Public Policy (1992-1995) 

Responsibilities: Curriculum and staffing of BBA and MBA courses. Faculty 

development of group of 11 faculty members specializing in business economics. 

Faculty Member (1982-1994) 

Responsibilities: MBA Core course coordinator of Applied Microeconomics (four years). 

Design and development of Competitive Tactics, a course analyzing competition and 

cooperation among firms; marketing and distribution of products; and related 

antitrust issues. 

Member, Board of Directors, Davidson Institute (focusing on transition economies and emerging 

markets) (1995-1998) 

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Member, Executive Committee, Tauber Manufacturing Institute, University of Michigan (1996-

1998) 

Member, Executive Committee, Erb Institute (focusing on environmental management), 

University of Michigan (1996-1998) 

Research Consultant, Federal Home Loan Bank Board / U.S. Sen. Comm. on Banking (1989) 

Consultant, Antitrust Division, U.S. Department of Justice (1982-1985) 

University of Chicago 

John M. Olin Visiting Associate Professor, Center for the Study of the Economy and the 

State (1991-1992) 

Antitrust Division, U.S. Department of Justice 

Economist (1978-1982; intermittent service through 1985) 

Staff Economist, National Commission to Review Antitrust Laws and Procedures (1978-

1979) 

PUBLICATIONS

Articles in Journals:

“Enforcement of Anti-Collusion Laws Against Domestic and Foreign Firms” (Co-author: 

Pierre Cremieux), Journal of Law & Economics, Vol. 59 (November 2016), pp. 775-

803. 

Reprinted in Concurrences, No.4-2017 (in press). 

“Proof of Common Impact in Antitrust Litigation: The Value of Regression Analysis”, 

(Co-authors: Pierre Cremieux and Ian Simmons), The George Mason Law Review, Summer 2010, pp. 939-967. 

“Bank Privatization in Transitional Economics: A General Framework with Application to 

Hungary’s Magyar Kulkereskedelmi Bank Transaction”, (Co-authors: Karen 

Schnatterly, Roger C. Kormendi and Christopher Jereb), The Financier , vol. 5, No. 2 

& 3 (1998), pp. 6-23. 

“Allocation of Litigation Costs--American and English Rules,” (Co-author: James W. 

Hughes) in The New Palgrave Dictionary of Economics and the Law, ed. Peter 

Newman, Macmillan Publishers Ltd, vol. 51 (1998), pp. 51-56.

“Transactional Structures of Bank Privatizations in Central Europe and Russia,” (Co- author Anna Meyendorff), Journal of Comparative Economics, (August 1997), pp. 5-

30. 

“Privatization and Performance of the Czech Republic’s Komercni Banka,” (Co-author: 

Roger C. Kormendi), Journal of Comparative Economics, (August 1997), pp. 97-128. 

“Litigation under the English and American Rules: Theory and Evidence,” (Co-author: 

James W. Hughes), Journal of Law & Economics, vol. 38 (April 1995), pp. 227-250. 

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“United States v. United Shoe Machine Corporation: On the Merits,” (Co-author: Scott 

E. Masten), Journal of Law & Economics, vol. 36 (April 1993), pp. 33-70.

Reprinted in Transaction Cost Economics, vol. 2, O. Williamson and S. Masten, eds.,

(Edward Elgar Publishing, Ltd., London), 1995, pp. 588-625.

Reprinted in Case Studies in Contracting and Organization, S. Masten, ed., (Oxford

University Press), 1996, pp. 224-254.

Reprinted in Journal of Reprints for Antitrust Law and Economics, issue on

Landmark Antitrust Decisions Revisited, 26, 1997, pp. 643-680.

Reprinted in Pricing Tactics, Strategies, and Outcomes, (M. Waldman & J. Johnson,

ed.). Cheltenham, UK: Edward Elgar Publishing. 2007

“Misuse of the Antitrust Laws: The Competitor Plaintiff,” (Co-author: Thomas E. 

Kauper), Michigan Law Review, vol. 90, (December 1991), pp. 551-603. 

Reprinted in The Journal of Reprints for Antitrust Law and Economics, vol. 25, no. 

2, (1995), pp. 657-709. 

“The Costs of Organization,” (Co-authors: Scott E. Masten and James W. Meehan, Jr.), 

Journal of Law, Economics, and Organization, vol. 7, (Spring 1991), pp. 1-25. 

Reprinted in Transaction Cost Economics, vol. 2, O. Williamson and S. Masten, eds., 

(Edward Elgar Publishing, Ltd., London), 1995, pp. 119-143. 

“The Effect of Higher Criminal Penalties on Antitrust Enforcement,” Journal of Law & 

Economics, vol. 33, (October 1990), pp. 439-462. 

“The English Rule for Allocating Legal Costs: Evidence Confronts Theory,” (Co-author: 

James W. Hughes) Journal of Law, Economics, and Organization, vol. 6, (Fall 

1990), pp. 345-380. 

“The Design and Duration of Contracts: Strategic and Efficiency Considerations,” (Coauthor: Scott E. Masten) Law and Contemporary Problems, vol. 52 (Winter 1989), 

pp. 63-85. 

“The Origins and Resolution of the Thrift Crisis,” (Co-authors: Roger C. Kormendi, Victor 

L. Bernard, S. Craig Pirrong) Journal of Applied Corporate Finance, vol. 2 (Fall

1989), pp. 85-100.

“Vertical Integration in the U.S. Auto Industry: A Note on the Influence of Transactions 

Specific Assets,” (Co-authors: Scott E. Masten, James W. Meehan, Jr.) Journal of 

Economic Behavior and Organization, vol. 12 (October 1989), pp. 265-73. 

“New Insights into the Decline of Antitrust Enforcement,” Contemporary Policy Issues, vol. 7 (October 1989), pp. 1-18. 

“Policy Analysis of Medical Malpractice Reforms: What Can We Learn from Claims 

Data?” (Co-author: James W. Hughes) Journal of Business & Economic Statistics, vol. 7, (October 1989), pp. 423-431. 

“Evaluating Medical Malpractice Reforms,” (Co-author: James W. Hughes) 

Contemporary Policy Issues, vol. 7, (April 1989), pp. 83-98. 

“An Inquiry into the Efficiency of Private Antitrust Enforcement,” (Co-Author: Thomas 

E. Kauper), Georgetown Law Journal, vol. 74, (April 1986), pp. 401-469.

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“Efficient Assignment of Rights to Sue for Antitrust Damages,” Journal of Law & 

Economics, vol. 28, (May 1985), pp. 469-482. Reprinted in The Journal of Reprints 

for Antitrust Law and Economics, vol. 25, no. 2, (1995), pp. 969-982. 

Books / Articles in Books and Volumes: 

“Competitive Discounts and Antitrust Policy,” (Co-authors: Kevin M. Murphy and Robert 

H. Topel), The Oxford Handbook of International Antitrust Economics, Volume 2, 

(2015), edited by Roger D. Blair and D. Daniel Sokol, Chapter 5, pp. 89-119. 

“Five Easy Questions”, Ch.2.3, in Leadership Development for a Global World: The Role 

of Companies and Business Schools, J.Canals (ed.), Palgrave Macmillan Ltd. Houndmills, Basingstoke, London 2012, pp. 145-160. 

Globalization of Management Education: Changing International Structures, Adaptive 

Strategies, and the Impact on Institutions, (Co-authors: Chair of AACSB Taskforce 

Robert F. Bruner, et al.), Emerald Group Publishing, (2011). 

“Social Learning and Transaction Cost Economics,” Advances in Strategic Management, A. Huff and J. Walsh, eds., (1997), pp. 223-228. 

Crisis Resolution in the Thrift Industry, (Co-authors: Roger C. Kormendi, Victor L. 

Bernard, S. Craig Pirrong), Kluwer Academic Press, (1989). 

“Private Antitrust Cases That Follow on Government Cases,” (Co-Author: Thomas E. 

Kauper) in Private Antitrust Enforcement: New Learning and New Evidence, ed. 

Lawrence J. White, M.I.T. Press, (1988), pp. 329-370. 

“Minimizing Waste Water Treatment Costs at the Plant Level,” (Co-Author: Dan Yaron) 

in Environmental Policy, vol. II, ed. George Tolley, et al., Ballinger Publishing Co., 

(1983), pp. 115-136. 

Report to the President and the Attorney General of the National Commission for the 

Review of Antitrust Laws and Procedures, (January 1979), co-authored Chapter 11 

on Insurance. 

Working Papers / Research in Progress : 

“Aftermath of the Sealy Antitrust Litigation.” (Co-author: Michael J. Moore). (June 

2006). 

“Napsterizing Pharmaceuticals: Access, Innovation, and Welfare.” (Co-authors: James 

W. Hughes and Michael J. Moore). (January 2011). 

Book Reviews: 

Confessions of an Economic Hit Man, John Perkins, (Berrett Koehler 2004), Journal of 

Economic Literature, vol. 43 (December 2005), pp. 1063-1065. 

Concentration and Price, ed. Leonard W. Weiss, (M.I.T. Press, 1989), Journal of Economic 

Literature, vol. 30 (September 1991), pp. 1205-1207. 

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Impact Evaluations of Federal Trade Commission Vertical Restraints Cases, ed. Robert H. 

Lande, et al., (Federal Trade Commission, 1984), Journal of Economic Literature, 

vol. 24 (December 1986), pp. 47-48. 

Other Publications: 

“Exponential Alliance,” (Co-authors David Bach and Camino de Paz), BizEd, (July/August 2017), pp. 18-27. 

“Five Good Questions”, CFO Insights (May 14, 2015). 

“The Future of §2 Enforcement and the Analysis of Dominant Firms,” 2010 Antitrust 

Section Symposium: New York State Bar Association, pp. 12-23. 

“A New Approach to Antitrust Class Certification.” (Co-authors: Pierre Cremieux and Ian 

Simmons), Law 360, (June 14, 2010). 

Amicus Brief from Group of Antitrust Economists in Support of Defendants-Appellees, In 

re: Effexor XR Antitrust Litigation, No. 15-1184 (3rd Cir. February 23, 2016). 

Amicus Brief from Group of Antitrust Economists to the U.S. Court of Appeals for the 

Third Circuit, filed May 10, 2016, regarding Wellbutrin XL Antitrust Litigation 

(E.D. Pa. September 23, 2015). 

Amicus Brief from Group of Antitrust Economists to the U.S. Court of Appeals for the 

Third Circuit, filed December 21, 2015, regarding Mylan Pharmaceuticals Inc. v. 

Warner Chilcott Public Limited Company, et al., 2:12-cv-03824 (E.D. Pa. April 16, 

2015).

In Re. DAP Antitrust Litigation, Expert Report, The Antitrust Litigation Course, American

Bar Association (Antitrust Section), Mock Trial in U.S. District Court for E.D. of 

Pennsylvania, MDL. Docket No. 1999, (October 4-5, 2007). 

Amicus Brief from Group of Industrial Organization Economists to the U.S. Supreme 

Court, filed August 24, 2006, regarding Weyerhaeuser Co., v. Ross-Simmons 

Hardwood Lumber Co., Inc., 411 F.3d (9th Cir. 2005). 

Amicus Brief from Group of Industrial Organization Economists to the U.S. Supreme 

Court, filed March 24, 2006, regarding William Twombly, et al., v. Bell Atlantic 

Corporation, et al., 313 F. Supp. 2d 174 (S.D.N.Y. October 7, 2003); William 

Twombly, et al., v. Bell Atlantic Corporation, et al., 425 F.3d 99 (2d Cir. 2005). 

Amicus Brief of Antitrust Economists in People of the State of NY v. Actavis plc and 

Forest Laboratories, LLC (14-4624), filed January 15, 2015; matter on appeal for the 

U.S. District Court for the SDNY (Civil Action No. 1:14-07473). 

“Bank Privatizations in Central Europe and Russia,” Davidson Institute Report to the U.S. 

Department of Treasury, (March 1996). 

“Director's View,” The Davidson Window, vol.1, (Winter 1994), pp. 1-2; vol.1, (Summer 

1994), pp. 1-2; vol. 1, (Spring 1995), pp. 1-2. 

 

“Transitions in Expertise,” The Journal of the International Institute, (Winter 1994), 

(July/August 2017), pp. 6-8. 

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Crisis Resolution in the Thrift Industry: Beyond the December Deals. (Co-authors: Roger 

C. Kormendi, Victor L. Bernard, S. Craig Pirrong), Report of the Mid America 

Institute, (March 1989). 

Popular Press: 

“Statistics and Sports: Deflategate,” Analysis Group, 2015 Year in Review. 

“Dean Of The Year: The Three-Peat Change Agent,” Poets and Quants, December 16, 2015). 

 “10 Business Schools to Watch in 2016,” Poets and Quants, (December 16, 2015). 

 “Faculty and students call for calmer tone in campus protests,” Wall Street

 Journal, (December 3, 2015). 

“IIM-B students can opt for lessons from Yale, Berkeley, and other top Business schools,” Prep Sure (November 19, 2015). 

“Research top priority for IIM-B”, Live Mint (December 2, 2015). 

“Global meet for business students concludes,” Hindu, (November 18, 2015). 

 “IIMB Students to Gain Global Exposure,” New Indian Express, (November 18, 2015). 

“Berkeley Haas becomes 28th school in Yale’s Global Network,” Financial Times, (November 5, 2015). 

“How Yale is beginning to crack into the elite B-school ranks,” Fortune, (December 17, 2014). “Businessweek’s 2014 Winners and Losers,” Poets and Quants, (November 14, 2014). “Is Michigan State Really Better Than Yale?,” New York Times, (August 7, 2012). 

“Yale Redefines What It Means to Be Global,” Wall Street Journal, (June 7, 2012). 

“Can ‘Ted’ Snyder Work His Magic on Yale’s School of Management?”, 

 Poets & Quants, (February 8, 2012). 

“Yale’s Big, Audacious Global Bet,” Poets and Quants, (February 8, 2012). 

“Q&A with Edward Snyder, Dean, Yale School of Management” Business Standard, 

 Mumbai, p. 12, (November 8, 2011). 

“If You Get the People Right, They Build the School,” Financial Times, (October 17, 

 2011). 

“Turnaround Specialist to Take on Yale,” Wall Street Journal, (June 3, 2010). 

“The Subtle Strategist,” Financial Times, (April 11, 2010). 

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“Student ≠ Customer,” Nytimes.com, Room for Debate, (January 4, 2010). 

“2016 Olympics,” Chicago Tribune, (September 17, 2009). 

“The Party’s Over: The Coming Business School Shake-out,” BusinessWeek.com, 

 (April 2, 2009). 

“Global Learning for a Truly Integrated MBA,” Financial Times, (February 19, 2009). 

“Driven Mad by Traffic Congestion,” Business Week Chicago, (April 2008). 

“The Market’s Place,” Chicago Tribune, (August 12, 2007). 

“Advocating a Carbon Tax,” CNBC Europe, (February 19, 2007). 

“Are B-Schools Slacking Off?” Business Week, (February 11, 2007). 

“The Quiet American?”, Global Focus, Vol. 1, No. 2, (2007). 

“Dean’s Column: The Toughest and the Best Advice,” Financial Times, (May 15, 2006). 

“On MBAs,” Financial World, London, (September 2005). 

 “Are Business Schools Becoming Global,” India Times, (August 2005). 

 “Global Challenge,” The Guardian, London, (August 4, 2005). 

“Vigorous Competition Better than any Oath,” Handelsblatt.com, (September 4, 2003). 

“Playing the Game the American Way,” Budapest Business Journal, (July 9, 1993). 

“An English Reform of American Law,” Wall Street Journal, (August 9, 1991). 

Business School Cases and Class Materials:

“Alternative Tools to Influence Market and Non-Market Behavior.” 

“W.R. Grace Co.'s Zonolite Licensee Program: How to Exploit Two Related Monopolies 

and Improve Economic Efficiency.” 

“Job Risk.” 

“Pricing Decisions: Custom Limousines.” 

“The Choice of Technologies.” 

“Mimicking the S&P 500.” 

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“Human Capital, Work, and Leisure.” Co-author: Scott E. Masten. 

“Sugar Quotas.” Co-author: Edward J. Mitchell. 

GRANTS AND FELLOWSHIPS

Grants from University of Virginia Darden School’s Batten Institute and University of 

Chicago Booth School of Business for major extension of previous research, 2009-

10. Resulted in “Napsterizing Pharmaceuticals: Access, Innovation, and Welfare” 

(January 2011). 

Grants from Aventis Pharmaceuticals, University of Chicago Graduate School of Business, 

University of Virginia Darden School, and Bates College 2000-01. Resulted in 

“Napsterizing Pharmaceuticals: Access, Innovation, and Consumer Welfare,” NBER 

Working Paper (October 2002). 

BT Grant of funds and equipment to the University of Michigan Business School to deliver 

educational modules using new technologies (November 1995). 

U.S. Department of Treasury Grant to the Davidson Institute to study bank privatizations 

in Central Europe and Russia. Co-investigator: Roger C. Kormendi (June 15, 1995 – 

December 31, 1995). 

Bradley Foundation Grant to study contract mechanisms to protect non-patentable 

innovations. Co-investigator: Scott E. Masten (July 1, 1989 - June 30, 1990). 

RGK Foundation Grant to study contract mechanisms to protect non-patentable 

innovations. Co-investigator: Scott E. Masten (July 1, 1989 - June 30, 1990). 

University of Michigan Office for the Study of Public and Private Institutions Research 

Grant to study contract mechanisms to protect non-patentable innovations. Coinvestigator: Scott E. Masten (Summer 1989). 

Robert Wood Johnson Foundation Grant to study the effects of tort reforms on medical 

malpractice litigation. Co-investigator: James W. Hughes (June 1, 1987 - December 

31, 1988). 

Earhart Foundation Grant to study the effects of the Supreme Court's Brunswick decision 

on private antitrust litigation (Summer 1986).

University of Michigan Business School Summer Research Grants to study private and 

public antitrust enforcement and other law and economics issues (1984, 1985, 1989, 

1990, 1992, and 1993). 

University of Chicago, Committee on Public Policy Studies Fellowship (1978). 

INVITED PAPERS, CONFERENCE PRESENTATIONS, PUBLIC TESTIMONY* 

 * In this section I include information regarding my testimony and briefings in public 

settings. Please refer to edwardasnyder.com for information regarding my 

consulting testimony in various litigations. 

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“Global Innovation: China and the World,” Remarks at Fortune Brainstorm Tech 

International panel, (December 5, 2017). 

“The Anti-Globalization Narrative: Implications for Business Schools”, Keynote speech at 

Deusto Business School’s Centenary Celebration, (January 17, 2017). 

“The Anti-Globalization Narrative”, Keynote speech at the 6th International Business 

School Shanghai Conference, hosted by Antai College of Economics and 

Management, Shanghai Jiao Tong University, (October 17, 2016). 

“Crafting Strategic Relationships”, panel at the 2016 AACSB International Conference and 

Annual Meeting (ICAM) (with Kai Peters, Chief Executive, Ashridge Business 

School), (April 5, 2016). 

Remarks at the Yale Law School’s Corporate Law Center Advisory Board Dinner, (March, 

8, 2016). 

“Global Antitrust Enforcement”, Keynote at the Annual New York Antitrust, New York 

State Bar Association (NYSBA), (January 28, 2016). 

“Past, Present, and Future of Business Education”, Keynote speech at Fudan University 

School of Management’s Partnership Deans Gathering, (November 5, 2015). 

Keynote Speaker at the 6th Indian Management Conclave, (July 29, 2015). 

“Globalizing Business Schools: The New Frontier”. Closing Keynote speech at the 

Graduate Management Admission Council (GMAC) Leadership Conference, Fort 

Lauderdale, Florida, (January 24, 2014). 

Keynote Speaker at The Rotman School’s Future of Business Education Conference, 

Toronto, Canada, (November 5, 2013). 

“American Law and Economics Association, invited paper (with Pierre Cremieux), 

“Antitrust Enforcement in the EU and US: An Empirical Assessment of the 

Influence of Protectionism”, Vanderbilt University Law School, (May 17, 2013). 

“Emerging Markets and Business School Strategies”. Invited moderator, International 

Conference and Annual Meeting for The Association to Advance Collegiate Schools 

of Business, (April 9, 2013). 

“Turkey as a Pivotal Country in the Global Economy”. Presentation to DEıK, Foreign 

Economics Relations Board, Istanbul, Turkey, (November 30, 2012). 

“Management Challenges in the Global Economy”. Presentation to faculty, students and 

staff at Renmin University of China School of Business. Beijing, China. (March 

2012). 

“The Management Education Industry.” AACSB Annual Deans Conference Plenary 

Session with Deans Christine Poon, Joseph Thomas, and Andrew Policano) Phoenix, 

Arizona, (February 20, 2011). 

“U.S. Business Schools and the MBA: A Long Perspective.” EFMD Annual Meeting of 

Deans and Directors, Lyon, France, (January 25, 2011). 

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“Proof of Common Impact in Antitrust Litigation: The Value of Regression Analysis.” 

George Mason 13th Annual Symposium on Antitrust Law, February 4, 2010; 

Analysis Group Seminar, New York, NY, (October 20, 2010). 

“Digging Out of the Deficit.” Executive Roundtable Panel Discussion with Governors 

Tim Pawlenty (MN), Donald Carcieri (RI), Mark Sanford (SC), Robert McDonnell 

(VA), and John Kasich, Candidate for Governor (OH), Cincinnati, Ohio, (September 

20, 2010). 

“Corporate Governance.” Inside Counsel’s 10th Annual Super Conference, invited panel. 

 Chicago, IL, (May 25, 2010). 

“The Future of §2 Enforcement.” Antitrust Section of the New York State Bar 

Association, Annual Meeting, (January 28, 2010). 

“Global Antitrust Enforcement.” Center for Public Studies, Santiago, Chile, (September 

2009). 

“Globalization of Management Education.” Plenary Speaker at AACSB Annual Deans 

Conference, San Francisco, CA, (February 5, 2009). 

“The Role of Economic Experts in Class Certification in the United States.” The 

American Bar Association Section of Antitrust Law Trial Practice Committee, (June 

17, 2008). 

“How to Use Economics.” Illinois Agricultural Leadership Seminar. Chicago, IL 

(August 2006). 

“Are Business Schools Becoming Truly Global?” with Dean Santiago Iñiguez. AACSB 

Dean’s Conference, San Diego, CA, (February 6, 2006). 

“Strategic Choices in a Global Environment.” Presentation with Dean Santiago Iñiguez. 

European Foundation for Management Development Deans’ Conference, Rotterdam 

School of Management, The Netherlands, (January 26, 2006). 

“How to Use Economics.” Distinguished Alumni Presentation, Colby College, (October 

2005). 

“Hatch-Waxman and Public Policy Toward Pharmaceuticals.” Presentation at Summer 

2002 Conference for Western Attorneys General (2002). 

Congressional Briefing, “Hatch-Waxman Reconsidered: How Best to Promote Prescription 

Drug Innovation and Affordability,” sponsored by the Alliance for Health Reform 

and supported by the National Institute of Health Care Management, (June 13, 2002). 

Combined Federal Trade Commission and Department of Justice Hearings on Competition 

and Intellectual Property Policy. Presentation of testimony on Hatch-Waxman and 

Public Policy Toward Pharmaceuticals, (March 2002). 

Graduate Business Conference, Johnson Graduate School of Management, Cornell 

University, invited panel, The Future of Management Education, (March 2001). 

“Economics and Government Policy.” Panel Discussion with Edward P. Lazear, Randall 

S. Kroszner, and Lawrence H. Summers, Honoring Gary S. Becker: A Conference, 

Chicago, IL, (February 11, 2001). 

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New York State Bar Association, invited panel on Indirect Purchaser Litigation in 

Antitrust, New York, NY, (January 2001). 

University of Virginia, E-Summit’s Plenary Session, (November 1999). 

European Association of Comparative Economics, Annual Conference, invited panel, 

Bank Privatization, Grenoble, France, (September 1996). 

University of Chicago, Conference on Tort Reform, Commentator for Steven Shavell, 

(June 1996). 

U.S. Department of Treasury, Davidson Institute, “Banks in Transition: Investment 

Opportunities in Central Europe and Russia,” New York City, (May 1996). 

U.S. Department of Treasury, Davidson Institute, “Bank Privatization in Central Europe 

and Russia,” Budapest, (April 1996). 

American Law and Economics Association, invited paper (with Greg Niehaus), “Damage 

Schedules in the Products Liability System and the Efficiency of Consumption 

Choices,” (May 1994). 

American Economics Association, invited paper (with James W. Hughes), “Litigation 

under the English and American Rules: Theory and Evidence,” (January 1994). 

University of Michigan Presidential Forum on Constituting International Expertise: Who, 

What, Where Why, How?, “Transitions in Expertise,” (October 1993). 

American Law and Economics Association, invited paper (with James W. Hughes), 

“Litigation under the English and American Rules: Theory and Evidence,” (May 

1992). 

Western Economic Association, 100 Years of the Sherman Act, invited paper (with 

Thomas E. Kauper), “Misuse of the Antitrust Laws,” (June 1990). 

Western Economic Association, Applied Microeconomics, invited paper, “Aftermath of 

the Sealy Antitrust Litigation,” (June 1990). 

Law and Society Association, invited paper (with James W. Hughes), “The English Rule 

for Allocating Legal Costs: Evidence Confronts Theory,” (June 1989). 

Duke University, Conference on the Law and Economics of Contracting, invited paper 

(with Scott E. Masten), “The Design and Duration of Contracts: Strategic and 

Efficiency Considerations,” (April 1988). 

U.S. Senate Banking Committee, testimony based on research paper (“The Origins and 

Resolution of the Thrift Crisis”), (February 1988). 

Georgetown University, Conference on Private Antitrust Enforcement, invited paper (with 

Thomas E. Kauper), “An Inquiry into the Efficiency of Private Antitrust 

Enforcement,” (November 1985). 

Hoover Institution, Conference on Antitrust and Economic Efficiency, invited paper, “Efficient Assignment of Rights to Sue for Antitrust Damages,” (August 1984). 

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SEMINARS AND OTHER PRESENTATIONS

Yale School of Management 

Problems with Global Antitrust Enforcement (2/16).

Vanderbilt Law School, American Law & Economics Association (5/13). 

University of Chicago 

Applied Price Theory Workshop (4/84, 10/84, 10/02). 

Economics and Legal Organization Workshop (10/90, 1/92, and 5/92). 

University of Virginia, e-Summit (11/99). 

U.S Treasury (2/96).

Davidson Institute Research Seminar Series (4/95).

University of Michigan, Center for Chinese Studies (10/94).

Young Presidents Organization, Asia Region Meetings (2/94).

Confederation of Indian Industries, CEO Forum (2/94).

Harvard University Law School, Law and Economics Seminar (4/93).

George Mason University Law School, Law and Economics Seminar (10/92).

University of Illinois, Industrial Organization Workshop (4/92).

Georgetown University Law School, Law and Economics Workshop (11/91).

Cornell University Law School (4/91).

University of Southern California, Applied Micro Workshop (10/90).

University of California at Los Angeles, Industrial Organization Workshop (10/90).

Virginia Polytechnic Institute, Economics Department Seminar (11/89).

Ohio State University, Industrial Organization Seminar (5/88), Microeconomic Theory

Workshop (10/86). 

Federal Trade Commission (10/88, 10/92). 

Western Economic Association (7/87, 7/88, 6/90, and 7/96). 

Duke University, Center for the Study of Business Regulation (11/86 and 12/92). 

Colby College (5/85, 2/92, 3/96). 

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U.S. Department of Justice, Antitrust Division (5/85, 5/86, 5/87, 11/89, and 5/91). 

Washington University, Industrial Organization Workshop (3/85). 

University of Michigan, 

Industrial Organization Workshop (2/84, 4/85, 9/86, 1/88, and 3/88). 

Law and Economics Seminar (10/89, 4/90, and 1/92). 

PH.D. THESIS COMMITTEE SUPERVISION

Alowin M. Th. L. Moses, “A Model of Voucher Privatization” (University of Michigan, 

1996). 

Vijay Singal, “Efficiency Versus Market Power in Mergers: Evidence from the Airline 

Industry” (University of Michigan, 1992). 

David E. Weinstein, “Essays on Japan's Trade and Industrial Structure” (University of 

Michigan, 1991). 

Debra J. Holt, “Understanding Strategic Choice: The Statistical Analysis of Experimental 

Games” (University of Michigan, 1990). 

David J. Denis, “Asymmetric Information and the Market for Seasoned Equity Offerings: 

Theory and Evidence” (University of Michigan, 1988). 

Amy J. Broman, “The Impact of Federal Income Tax Policy on the Charitable 

Contributions Behavior of Households” (University of Michigan, 1987). 

James W. Hughes, “Tort Reforms and Medical Malpractice Litigation” (University of 

Michigan, 1986). 

Barton L. Lipman, “Delaying or Deterring Entry: A Game-Theoretic Analysis”

(University of Michigan, 1985). 

OTHER 

Trustee, Colby College 

International Advisory Committee, School of Business, Renmin University of China 

Member of American Law and Economics Association

Member of the Committee for Economic Development of the Conference Board (CED) 

Member of MIT Corporation Visiting Committee for the Sloan School of Management 

Member of the 3rd Advisory Board of Antai College of Economics and Management, 

Shanghai Jiao Tong University (Term: November, 2015 to October, 2018) 

Chair or Member of AACSB Accreditation Review Committees, including University of 

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California Berkeley (Haas), University of California Los Angeles (Anderson), MIT 

 Sloan, Wharton, Columbia Business School, Georgetown (McDonough), HEC Paris, 

Fudan School of Business, and Stanford GSB. 

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B-1 

APPENDIX B 

EDWARD A. SNYDER 

RECENT EXPERT TESTIMONY 

1. United States District Court, Northern District of California 

In re: Transpacific Passenger Air Transportation Antitrust Litigation, Master File No. C 07-

05634 CRB, MDL No. 1913 

Report and deposition 2018 

2. United States District Court, District of New Jersey 

In Re: Lamictal Direct Purchaser Antitrust Litigation, Master File No. 12-cv-995-WHW 

Report and deposition 2018 

3. United States District Court, Middle District of Florida 

In re: Disposable Contact Lens Antitrust Litigation, Case No. 3:15-md-2626-J-20JRK 

Reports and depositions 2017 & 2018 

4. United States District Court, Eastern District of Virginia, Richmond Division 

Steves and Sons, Inc. v. JELD-WEN, Inc., Case No. 3:16-cv-00545-REP 

Reports, deposition, hearing, and trial testimony 2017 & 2018 

5. United States District Court, Northern District of California 

In re: Optical Disk Drive Products Antitrust Litigation, Master File No. 3:10-cv-2143-RS; MDL 

No. 2143 

Reports and depositions 2017 

6. United States District Court, Northern District of California 

Cathode Ray Tube (CRT) Antitrust Litigation, Master File No. 07-5944-SC, MDL No. 1917 

Reports and depositions 2014 

7. United States District Court, Eastern District of Pennsylvania 

King Drug Company of Florence, Inc. et al., v. Cephalon, Inc., et al., Case No. 2:06-cv-1797; 

Vista Healthplan, Inc., et al., v. Cephalon, Inc., et al., Case No. 2:06-cv-1833; Apotex, Inc., v. 

Cephalon, Inc., et al., Case No. 2:06-cv-2768; Federal Trade Commission, v. Cephalon, Inc., 

Case No. 2:06-cv-2141 

Reports and depositions 2011 & 2014 

8. United States District Court, District of Massachusetts 

Kirk Dahl, et al., v. Bain Capital Partners, LLC, et al., Case No. 07-cv-12388-WGY 

Reports and depositions 2014 

9. United States District Court, Northern District of California 

TFT-LCD (Flat Panel) Antitrust Litigation, Master File No. M-07-1827-SI, MDL No. 1827 

Reports, depositions, and trial testimony 2013 & 2014 

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