So why doesn’t Apple just move to the end game and buy Qualcomm? I just don’t think Tim Cook has really thought this through strategically at all. I mean, if you want to buy your neighbor’s car you just walk up and ask what his price is and start negotiating. You don’t first threaten his wife and kids or write nasty letters to his employer, because you may still end up buying the car in terms of legal fees, likely several times over, the only thing is you may not actually have a car (or house) to enjoy when the smoke clears.
So, Apple is playing chicken with the iPhone putting it at needless risk for a benefit that is at most transitory against a risk that could be crippling. Oh, I should add one more thing. Because Qualcomm’s charges are capped (they are based on the price of phone but there is a max amount that only Apple always exceeds, Apple effectively gets a unique and sustainable discount now). So, for maybe two quarters of potentially higher margins they will give up their unique sustainable discount and likely be forced into paying a huge premium for a company they don’t want to buy. That makes no sense to me but then I’m not an overpaid CEO…
