Apple and Qualcomm end their “Legal Beef” and drop lawsuits

The convoluted legal battle between Apple and chipmaker Qualcomm may be coming to an end. The companies said Tuesday that they’re dismissing all litigation against each other. Apple will pay Qualcomm an undisclosed sum as part of the settlement, which includes a six-year licensing agreement between the two.

The settlement also covers suits brought by Apple’s manufacturing partners, which wanted Qualcomm to repay $9 billion—a number that reportedly could have been tripled under antitrust law—that they say the chipmaker overcharged them for patent royalties.

The announcement came while Qualcomm’s lawyer was delivering his opening remarks in a trial of numerous claims and counterclaims that started Tuesday morning in San Diego, according to CNET. Qualcomm told investors last year that Apple would stop using its wireless chips, switching instead to chips made by competitors like Intel.

One potential catalyst for the settlement emerged a few hours later: Intel said it won’t make wireless modems capable of connecting to the coming generation of 5G networks. Earlier this year, Intel had said it would have sample 5G modems ready in 2019, and officially launch the products next year. With Intel no longer an option, that would explain why Apple needed to work out a new deal with Qualcomm. There are few 5G-capable networks operating yet, but Huawei, Samsung, and other smartphone makers have announced 5G-capable phones based on Qualcomm’s wireless chips.

The dispute between Apple and Qualcomm involved the unusual way Qualcomm licenses its technology to other companies. Qualcomm generally charges handset makers like Apple and Huawei around 5 percent of the total price of a phone for the right to use its technology, up to about $20 per device, according to a legal brief filed by Qualcomm. In other words, if you pay $300 for a phone that uses Qualcomm technology, $15 of that might go to the company, even if there are no chips made by Qualcomm in the device. If you paid $1,000, Qualcomm would get $20. Those licensing fees come on top of what a manufacturer would pay for Qualcomm’s chips. Apple referred to this as double-dipping and argued that Qualcomm only got away with it because it effectively holds a monopoly on high-end wireless chip technologies.

Though terms of the agreement were not disclosed, investors viewed it as good news for Qualcomm. Its shares rose 23 percent. Apple shares were little changed.

It’s not necessarily the end of the legal woes that have pitted Qualcomm against regulators around the world in recent years. The company is still awaiting a decision in an antitrust suit brought by the Federal Trade Commission alleging the company uses its dominant position in the wireless chip market to overcharge customers to use its technology.

During the FTC trial, Qualcomm said it doesn’t factor the value of its intellectual property into its chip prices. In other words, Qualcomm claims that it essentially sells the chips at a discount and then makes up for it with the patent licensing fee. It’s an odd arrangement, but it’s one that Qualcomm has had in place for decades, long before it became a major player in the semiconductor industry.

The history of Apple and Qualcomm’s legal beef sounds a bit like a Game of Thrones recap. Apple sued Qualcomm in January 2017, alleging that Qualcomm had withheld $1 billion in royalty rebates in retaliation over Apple’s cooperation with antitrust regulators in South Korea, where Qualcomm was hit with a $854 million fine in 2016.

Qualcomm countersued Apple that spring, claiming that Apple deliberately slowed Qualcomm modems used in some iPhones to cover up slower performance of Intel-made modems used in other iPhones. Apple retaliated by withholding payments for the patent licensing fees its manufacturing partners were supposed to pay to Qualcomm, and by expanding its lawsuit to include the double-dipping allegations. Qualcomm responded by suing Apple’s manufacturers over the unpaid licensing fees and by suing Apple itself for patent infringement.


Sam Sloma: Two must-reads for financial planners

If you had told me 10 years ago that not only would I be a chartered financial planner but that I would enjoy it so much I would be reading about the “science” of retirement and the “new retire-mentality” in my spare time, I reckon I would have asked you to kill me.

But it seems the lifestyle planning element has ignited a spark within me and, once the passion for what you do kicks in, you just want to learn as much as you can.

I have just finished The New Retire-mentality by Mitch Anthony, who spoke last month at Paul Armson’s BACK2Y conference. I saw Anthony speak last year and he was fantastic.

The crux of the book is that retirement should not have to mean stopping work and switching off one’s brain. In fact, there is plenty of evidence to support the idea that doing so has a negative impact on your life.

Advances in medicine and healthy lifestyles mean people are living longer and are far more able to work until they feel they cannot or do not want to.

The internet and progression in human connectivity have also meant that, instead of putting a finite date on one’s working life, it is now easier for people to phase the slowdown, to start new businesses or follow passions in their spare time.

Traditional ideas of retirement are changing and there is an element of responsibility on planners to make sure retirees understand they have options. It was an enjoyable, easy read and I would give it an eight out of 10.

The second book I want to recommend is Start with Why by Simon Sinek. While not specific to financial services, it is a brilliant book about understanding the “why” within your business.

Understanding why the business exists provides a fundamental foundation to build on, of which you only realise the importance once you have found it. Sinek gives numerous examples of business leaders, including high-profile chief executives such as Apple’s Steve Jobs, who have started with why, and how it leads to repeated success.

It is not difficult for a business to explain what it does and it is also fairly easy (though possibly more technical) to explain how it does it.

But very few businesses can clearly articulate their why. Why is it not about financial assets or profits? Why does your business exist? Why does it do the things it does? Why do customers really choose one company over another? Why are consumers loyal to some businesses, but not others?

Starting with why works across businesses of all sizes and across all industries. Those that start with why are more likely to achieve the consumer behaviour they desire through inspiration. And the people who follow them do not do so because they have to; they follow because they want to.

Now, the comparison between companies like Apple and a local financial planning business is not really a fair one. However, it does not mean we cannot learn lessons from these successful businesses. It is a huge asset to be able to look at your business from the ground up and have everything aligned to your why.

Start with Why is a bestseller and for anyone looking at starting their own business, I would say it is a must-read. I give it a solid nine out of 10.

Sam Sloma is Managing Director at Engage Financial Services


High Court blocks iPhone data breach class action against Google

The High Court has blocked a mass legal action against Google over claims that it collected sensitive personal data from more than four million iPhone users.

Mr Justice Warby, sitting in London, announced his decision on Monday.

The litigation was brought by campaign group Google You Owe Us, led by former Which? director Richard Lloyd.

The tech giant faced claims that it bypassed privacy settings on Apple iPhone handsets between August 2011 and February 2012 and used data to divide people into categories for advertisers.

The campaign group hoped to win at least £1 billion in compensation for an estimated 4.4 million users of the device in the UK.

At the first hearing of the case in London in May, lawyers for Mr Lloyd told the court that information collected by Google included racial or ethnic origin, physical and mental health, political affiliations or opinions, sexuality and sexual interests and social class.

They said information about an individual’s financial situation, shopping habits and their geographical location were also obtained.

Hugh Tomlinson QC, representing Mr Lloyd, said information was then “aggregated” and users were put into groups such as “football lovers” or “current affairs enthusiasts”.

These were then offered to subscribing advertisers to choose from when deciding who to direct their marketing to.

Mr Tomlinson said the data was gathered through “clandestine tracking and collation” of information relating to internet usage on iPhone users’ Safari browser – known as the “Safari Workaround”.

He told Mr Justice Warby the activity was exposed by a PhD researcher in 2012 and Google has already paid 39.5 million US dollars to settle claims in the United States.

Google argued that the type of “representative action” being brought against it by Mr Lloyd is unsuitable and should not go ahead.

Lawyers for the California-based company said there is no suggestion that the Safari Workaround resulted in any information being disclosed to third parties.

They also said it is not possible to identify those who may have been affected and the claim has no prospect of success.


20 great career tips from successful entrepreneurs

Being an entrepreneur is about the journey, not the destination. For those who have an entrepreneurial spirit, the following career tips are a reminder that it’s okay to fail—it’s all about learning from your mistakes and moving forward. Here are 20 great tips from successful entrepreneurs.

1. Elon Musk – Co-Founder of PayPal, CEO of Tesla & Founder of SpaceX

Elon Musk is a South African-born American entrepreneur, inventor, and investor. He is best known as CEO of electric-car manufacturer Tesla, co-founder of PayPal, and founder of commercial space program SpaceX. For an article in Time magazine, Musk was asked whether he had ever doubted his chances of success:

“I always knew that there was a chance of failure in all my endeavors,” he said. “But I felt that they were important enough that I had to try, even if I thought the probability of success was less than 50%.”

2. J.K. Rowling – Author of the Harry Potter Series

Known for her bestselling Harry Potter novels that have sold 450 million copies and won numerous awards, J.K. Rowling has a net worth of about US$850 million. Rowling has risen from rags to riches, and as she discussed in her 2008 commencement speech at Harvard University, knows that failure is not a bad thing:

“So why do I talk about the benefits of failure? Simply because failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me. Had I really succeeded at anything else, I might never have found the determination to succeed in the one arena I believed I truly belonged.”

3. Stewart Butterfield – Co-Founder of Flickr & Slack

Canadian Stewart Butterfield is an entrepreneur and businessman, best known for being a co-founder of the photo sharing website Flickr and team messaging application Slack.

He recently shared some advice for young people with Adam Bryant of the New York Times: “Some people will know exactly what they want to do at a very young age, but the odds are low. I feel like people in their early- to mid-20s are very earnest. They’re very serious, and they want to feel like they’ve accomplished a lot at a very young age rather than just trying to figure stuff out. So I try to push them toward a more experimental attitude.”

4. Mark Cuban – Shark Tank Investor & Owner of the Dallas Mavericks

Known for his appearances on the ABC show Shark Tank, Cuban made his fortune through the sale of startups MicroSolutions and in the 1990s, and later became known as the enthusiastic owner of the NBA’s Dallas Mavericks.

Cuban has made some controversial statements, but he does also give some pretty good advice. “One thing we can all control is effort. Put in the time to become an expert in whatever you’re doing. It will give you an advantage because most people don’t do this.”

5. Sheryl Sandberg – COO of Facebook

As the COO of Facebook, Sheryl Sandberg juggles the tasks of monetizing the world’s largest social networking site while keeping its users happy and engaged. It’s a huge responsibility, but one well suited to Sandberg, who earlier in her career developed Google’s successful online advertising programs, but also worked as an economist at the World Bank and as chief of staff to then-U.S. treasury secretary Larry Summers.

Here’s her take on how to be yourself at work, no matter what. “I don’t believe we have a professional self from Mondays through Fridays and a real self for the rest of the time. That kind of division probably never worked, but in today’s world … it makes even less sense. I’ve cried at work … I talk about my hopes and fears and ask people about theirs. I try to be myself. Honest about my strengths and weaknesses and I encourage others to do the same.”

6. Bill Gates – Founder of Microsoft

Bill Gates is an American business leader, entrepreneur, and philanthropist, best known as the co-founder of Microsoft. Famous for being one of the richest people in the world, Bill Gates tweeted the following career advice to new college graduates: “AI, energy, and biosciences are promising fields where you can make a huge impact. It’s what I would do if starting out today.” He also encouraged grads to “surround yourself with people who challenge you, teach you, and push you to be your best self.”

7. Simon Sinek – Leadership Expert & Author

Simon Sinek describes himself as someone who tries to “find, celebrate, and teach leaders how to build platforms that will inspire others.” He is a trained ethnographer and the author of the book Start With Why: How Great Leaders Inspire Everyone to Take Action. In 2012, Sinek tweeted the following advice: “Dream big. Start small. But most of all, start.”

8. Steve Jobs – Co-Founder of Apple

As the co-founder and former CEO of Apple Inc., Steve Jobs was known for his relentless pursuit of excellence in everything the company did. At the root of his exacting standards was a deep passion for his work. In his commencement address at Stanford University in 2005, Jobs said: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.”

9. Jeff Bezos – Founder & CEO of Amazon.Com

Jeff Bezos, the founder and CEO of online retailer and founder of space company Blue Origin, is currently the world’s richest person, with a total net worth of $134 billion as of May 2018. At a forum on leadership in April 2018, Bezos explained that space travel is his calling, and offered this advice: “You can have a job, or you can have a career, or you can have a calling. And if you can somehow figure out how to have a calling, you have hit the jackpot, ’cause that’s the big deal.”

10. Mark Zuckerberg – Co-Founder & CEO of Facebook

Mark Zuckerberg is the co-founder and CEO of Facebook and one of the richest people in the world. Back in 2011, he offered this advice to entrepreneurs during an interview at Y Combinator’s Start-up School in Palo Alto, California: “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

11. Tobias Lütke – Founder & CEO of Shopify

Tobias Lütke is the founder and CEO of Shopify, a Canadian e-commerce company that went public in 2015. In an interview with Canadian Business, he said: “I really encourage people to find a place that sort of culturally aligns with what they’re trying to accomplish, and then just go for it.”

12. Marla Malcolm Beck – Co-Founder & CEO of Bluemercury

Marla Malcolm Beck is the co-founder and CEO of Bluemercury, a luxury beauty retailer and spa that was sold to Macy’s for $210 million in 2015. In an interview with Adam Bryant of the New York Times, Beck offered the following advice to graduating college students: “Bring an expertise or skill set into an organization, or be the expert at something that nobody else is doing.”

13. Chip Wilson – Founder & Former CEO of Lululemon Athletica

Chip Wilson, the founder and former CEO of athletic apparel company Lululemon Athletica, now manages a portfolio of companies under the name Hold It All. Back in 2013, Wilson shared the best advice he had ever received with Business Insider: “It took me a long time to understand it, but [the advice was] to ask for help and that I don’t know it all. People love to help. I don’t have to be insecure and know it all.”

14. Brian Chesky – Co-Founder & CEO of Airbnb

Brian Chesky, the co-founder and CEO of peer-to-peer apartment rental service Airbnb, told the New York Times’ Adam Bryant that recent grads shouldn’t listen to their parents.

“They’re the most important relationships in your life, but you should never take your parents’ career advice, and I’m using parents as a proxy for all the pressures in the world,” Chesky said. “I also say that whatever career you’re in, assume it’s going to be a massive failure. That way, you’re not making decisions based on success, money and career. You’re only making it based on doing what you love.”

15. Tony Robbins – Inspirational Speaker

Tony Robbins is a life and business strategist, bestselling author, and philanthropist. In a 2016 Facebook Live discussion hosted by Business Insider, Robbins shared the advice given to him early in his career by his mentor, the late motivational speaker Jim Rohn:

“Your worth in the marketplace is based on your ability to add more value than anyone else. If you can find a way to do more for others in your company, more for the employees, more for the clients, than anybody else, your gifts will make room for you. But in order to do that, you’ve got to build skills.”

16. Maya Angelou – Author & Activist

The many inspiring quotes from the late Maya Angelou are evidence of the celebrated writer and civil rights activist’s entrepreneurial spirit. Take this piece of advice, for example: “You can only become truly accomplished at something you love. Don’t make money your goal. Instead pursue the things you love doing and then do them so well that people can’t take their eyes off of you.”

17. Melanie Whelan – CEO of SoulCycle

Melanie Whelan, the CEO of fitness chain SoulCycle, believes that new college graduates should focus on the present and not get hung up on what they feel they “should” be doing. In an interview with the New York Times’ Adam Bryant, she said: “The first thing I say is to get a job and work hard. You are going to learn a ton in whatever that job is, so don’t stress too much about what it is or where it is. Just take a job and put your head down, work hard, raise your hand for anything anybody asks you to do.”

18. Rick Goings – CEO of Tupperware Brands

Rick Goings, the CEO of Tupperware Brands, began his career as a door-to-door salesman of encyclopedias—a job at which he was not successful. In an interview with Business Insider in 2015, Goings explained why failure is an important step on the road to success: “The experiences you get in failure are some of the best lessons you can apply in life. I truly believe you need to fail in order to succeed. It’s never a straight line to success, and it’s the bumps and pivots that help you get there.”

19. Salli Setta – President of Red Lobster

Salli Setta, the president of popular restaurant chain Red Lobster, told Business Insider that she sees lunchtime as a prime networking opportunity.

“It isn’t about saying ‘hi, what are we going to talk about, let’s talk about sports.’ It’s about identifying the object of this lunch in your mind.” Setta recommends preparing questions and ideas ahead of time for a more productive discussion.

20. Henry Ford – Founder of Ford Motor Company

Henry Ford, the founder of Ford Motor Company and the man who revolutionized the automobile industry by developing assembly line production, reportedly once said, “You can’t build a reputation on what you are going to do”—a helpful reminder for those who have entrepreneurial aspirations but have yet to take action!


China hits back at Trump with tariffs on $60 billion of US goods

China is to slap tariffs on an additional $60bn (£46bn) of imports from the United States in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump.

The latest moves represent a new step towards a full-scale trade war between the world’s two biggest economies. Further escalation is deemed likely because President Trump is facing low approval ratings ahead of the United States midterm elections in November, while China will not want to be seen to back down.

President Trump announced his latest escalation of the bitter trade standoff late on Monday, promising to introduce the additional border taxes of 10% on Chinese goods from next week.

The tariffs – designed to make United States domestic products more competitive against foreign imports – apply to almost 6,000 items, including consumer goods such as luggage and electronics, housewares and food.

The United States president threatened further tariffs on an additional $276bn of goods if Beijing unveils retaliatory measures – a step that would mean tariffs on all Chinese imports to the United States and equate to 4% of world trade.

Early on Tuesday he tweeted to accuse China of “actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me”.

The United States president added: “What China does not understand is that these people are great patriots and fully understand that China has been taking advantage of the United States on trade for many years.

“They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”

However, China then unveiled $60bn of tariffs on US imports including aircraft and coffee.

Ahead of China’s latest move, Jack Ma, the founder of e-commerce giant Alibaba and one of the country’s wealthiest men, warned the conflict could drag on for 20 years and would be a “mess” for all parties.

China faces difficulty in responding on a scale equal to President Trump’s new tariffs because its annual imports from the United States total only about $130bn, while its exports to the United States total more than $500bn.

However, analysts said the Chinese government had a comprehensive toolbox of alternative measures it could deploy to disrupt United States businesses operating in China – and might even devalue its currency to offset the impact of the tariffs.

Erik Britton of research firm Fathom Consulting said he believed China was eventually likely to capitulate and would enter fresh talks to end the threat of tariffs as a result of the trade imbalance.

“Our likeliest outcome is that China yields. They’ve been in a game of chicken – only the United States is driving a 40-tonne truck and China is driving a Fiat Cinquecento.”

Britton added that President Trump was probably using the threat of tariffs to force Beijing to change its economic policies covering United States companies.

“The point is they [the United States] want something to change,” he said. “When I threaten my kids with stopping their pocket money it’s not that I want to raise money. It’s that I want them to tidy their room.”

President Trump has argued Beijing uses “unfair” trade practices such as forcing the transfer of United States firms’ intellectual property when they operate in China. Some analysts, however, said the threat of tariffs could exacerbate these actions, rather than end them.

David Chmiel, the managing director of risk consultancy Global Torchlight, said: “There could be a weaponising of regulation by Beijing. You can see a situation where they target specific United States companies.”

Economists said this could have a significant impact as many United States companies – including Nike, General Electric and Apple – have operations in China. Disruption could range from invasive health and safety checks to tougher labour controls or rules on fire standards. Mergers and acquisitions could be made more difficult, and state contracts could be withheld from United States firms.

Keith Wade, the chief economist at Schroders, said: “Very zealous enforcement of regulations could make life quite difficult for companies. America is also probably more dependent on China than the official trade figures suggest.”

United States Census Bureau figures show China sells about $375bn more to the United States than goes the other way. However, Deutsche Bank reckons taking into account direct in-country sales by United States firms in China would give a $20bn surplus in favour of the United States.


How two strangers set up Dropbox and made billions

The BBC’s weekly The Boss series profiles a different business leader from around the world. This week we spoke to Drew Houston, founder and chief executive of US cloud storage company Dropbox.

Drew Houston says it felt as if he had just two weeks to find a complete stranger to marry.

Back in 2007 the then 24-year-old was desperate to secure funding to get his idea for a cloud storage business up and running.

One of Silicon Valley’s most prestigious backers of new start-ups – Y Combinator – were prepared to take a gamble on Mr Houston and Dropbox, but there was one catch – they demanded that he get a business partner.

Their argument is that new companies are far more likely to succeed if they have more than one founder, more than one person to make decisions and cope with the workload.

Mr Houston’s problem was that he was a one man band at the time, and for various reasons none of his friends were able to join the business. So he had just two weeks to find a complete stranger to become his co-founder.

“It was like getting an email from the dean of admissions to your favourite college, but the application deadline was in the next couple of weeks, and you need to get married in that time, not just find a date.”

Moving very quickly Mr Houston managed – after a chat lasting just two hours – to persuade a 22-year-old student called Arash Ferdowsi to quit university and join him. Mr Ferdowsi was a friend of a friend, but he and Mr Houston had never met before.

That was 11 years ago. Fast forward to today and San Francisco-based Dropbox is valued at more than $12bn (£9bn). while Mr Houston’s net worth is calculated at $3bn, and Mr Ferdowsi’s at $1.3bn.

Not bad at all for a company that many said would never be successful, and one that Apple’s late Steve Jobs is widely reported to have said he would destroy.

Inspiration for a new business can come from anywhere, and for Mr Houston it was on a bus between Boston and New York in late 2006.

As a recent computer science graduate from the Massachusetts Institute of Technology (MIT) he was intending to use the six or so hours long journey to work on some earlier business ideas. But as he sat down in his seat, Mr Houston realised that he had forgotten the memory stick that contained all the files.

“I was so frustrated because I felt like this kept happening,” he says. “I never wanted to have the problem again, so having nothing else to do… I started writing some code [to find a solution], having no idea what it would become.”

What Mr Houston came up with was the idea for Dropbox – remote storage that users can access online wherever they may be. Within two weeks he had created the prototype, and come up with the name.

Just a few months later Y Combinator expressed an interest, and Mr Houston went back to MIT to meet Mr Ferdowsi, who was studying electrical engineering and computer science at his old university.

Mr Houston, who is now 35, says: “We met in the student centre for an hour or two, then Arash dropped out of school the next week.

“In retrospect this was pretty crazy… I’m sure his parents had a different plan for him, one that involved finishing college.

“But he was really excited to do it. And I don’t know if either of us knew quite what we were getting into.”

Moving into Y Combinator’s base in Silicon Valley, Dropbox launched in 2008.

To attract its first customers Dropbox made promotional videos that it put up on discussion websites such as Reddit and Slashdot. The aim was to get technology sector influencers to start using the service in the hope that they would speak positively about the product, and user numbers would then grow thanks to this word of mouth.

This indeed proved successful, and from 5,000 users on a waiting list, within a few days Dropbox had 75,000 sign ups. Then it went from 100,000 users to 200,000 users “in something like 10 days”.

User numbers rocketed even further and faster when Mr Houston and his team came up with an incentivised referral scheme. This offered existing Dropbox customers more free storage space if they could get a friend to sign up. The other person would also get more free space, and so on.

It attracted millions of new customers, and caught the attention of the late Steve Jobs who made an offer for the business in 2011.

While Mr Houston declined to talk about this, in numerous previous interviews he has inferred that Jobs didn’t take it well when he turned down the offer. Website Business Insider last year quoted Mr Houston saying that Jobs had threatened to “kill” Dropbox following the rejection.

Apple launched its own cloud storage service later in 2011, iCloud, but this didn’t hold back Dropbox’s growth.

Today Dropbox has more than 500 million registered users, of whom 11.5 million pay an annual subscription fee for more storage than you get for free. This includes more than 300,000 paying business customers.

The company floated on the New York Stock Exchange earlier this year, and its market capitalisation – the total value of all its shares – currently stands at more than $12bn. Its annual revenues exceed $1bn, and it has a global workforce of more than 2,000 people.

Technology analyst Ben Wood of research group CCS Insight says there are numerous reasons for Dropbox’s success, such as its overall ease of use and “very importantly the fact it allows people to easily save and share photos, videos, and other big files that email servers are still unable to cope with”.

Mr Houston says that he and Mr Ferdowsi, who remains on the senior management team, continue to work well together.

Regarding his specific role as chief executive, Mr Houston says his current main focus is making sure that staff ignore the success of the recent share flotation, and instead “stay focused on why we are here – making customers happy”.