...

The fourth is Apple's integrated circuits, their packaging devices, methods and components related patents for packaging multiple integrated circuits.

This aspect is a very core patent content, which is designed with Apple's chip design and related construction architecture.

However, there is only a small part of the content disclosed here. Apple has done a very good job of confidentiality in terms of core chip design, and it is impossible to exchange it with Bomi. The exchange part is other integrated circuit design parts except the processor.

Cao Yang was very excited when he saw this, but when he learned the truth, he could only say that this thing was a bit useless.

...

The fifth is Apple's technical patents in battery:

Adaptive battery life extension; implicit power management mode and state transition…

Bomi's battery has always been a headache, because Bomi itself uses a large screen and consumes much higher power than Apple's small screen. Now Bomi uses a clumsy way to solve this problem. If the battery's battery life can be enhanced through Apple's patents, the market performance will be greatly improved.

The battery of Apple phones is not very good, but they have strong battery capabilities on computers. Now Apple phones can last about 8 hours. If you don’t play games, it will be fine to make phone calls and send text messages for 4 or 5 hours.

Obtaining Apple's battery-related technology can at least help Bomi's own battery improve a lot. With two batteries, the usage can be greatly improved.

...

This part of the explanation was talked about until the evening, when the personnel of the Apple patent team took turns to work and talked about it.

And the same is true for several translations.

Finally, it was past 9 o'clock in the evening, and everyone felt that it was getting late, so they would rest and wait until tomorrow to discuss.

...

This happened almost every day in the next three days.

After Apple's patent team clearly explained the content of the Apple patent they could transfer, Bomi himself held a separate discussion meeting.

"Which of the patent exchanges do you think are more valuable in this time Apple provides?" Cao Yang asked.

Liu Qiang summarized it with everyone and responded, "The most valuable thing is that they are efficient in handling it. If they can obtain Apple's patent license, our mobile phone performance should be greatly improved.

Battery has always been a headache for us, and this part should be more useful, such as power supply equipment, such as power cords, charging... these are valuable and are our weak links.

Then the other more valuable ones are their speakers and musical functions.

Light sense is a relatively high-end and humanized thing, and it actually has certain value…”

Liu Qiang's judgment is similar to Cao Yang's own.

In the end, it took more than half a day to carefully analyze and study the Apple patents that can be exchanged. Finally, it was concluded that there were about 20 patents that were relatively valuable and could be listed in the subsequent negotiation content.

Cao Yang's attitude towards patents that are relatively useless and needy, is to do not have to do anything, which can increase the upper limit of patent licensing fees charged by Bomi in subsequent negotiations.

It’s obvious that the more content you exchange, the less weight you can use to bargain.

Apple wants to reduce the expenses of patents, so it will endure the pain of giving up and take out some of its own stuff to exchange.

In 2015, Huawei and Apple reached a series of patent license agreements, covering wireless communication technologies such as GSM, UMTS, and LTE.

Huawei licenses 769 patents to Apple and 98 patents to Huawei. In the communications industry, when two companies sign patent licenses, the party with the largest number of patent licenses will charge patent fees to the party with the smaller number, which means that Huawei has begun to charge Apple patent license fees.

So if Bomi and Apple reach a patent and license each other this time, then because Bomi has more licensed patents, Apple will also have to pay Bomi's patent fees, but it will not buy as many separately without exchange.

...

Since both parties have a certain understanding of the patents they own, the negotiations will truly enter the core stage—

How many patents need to be exchanged, as well as the asking price of Bomi and the patent licensing fee Apple is preparing to give.

This is another very long process. Both parties pass by one by one, and it is very slow. It takes a lot of time to negotiate the value of each patent.

A week passed quickly.

Cao Yang felt that this period of time passed quickly. He came to the company for a meeting every morning, and then in the blink of an eye, it was evening, and each line was tug-of-war for a long time.

Finally, almost 7 days later, both teams had a very deep understanding of each other.

The negotiations are almost over.

...

It is difficult to determine the patent usage fee. Generally speaking, the amount can be considered based on the following factors.

1. The difficulty and cost of patent owners in researching and developing patented technologies. Generally speaking, patents with high research and development difficulties and high development costs have relatively high usage fees.

2. The amount of profit the licensee can obtain after using the patent is large, and the usage fee is high.

This should be easy to understand. I invested 10 billion yuan in the research and development of this patent. Overall, the patent licensing fee required is naturally higher.

Moreover, the greater the value this patent can generate in the future, the higher the usage fee will naturally be.

Patent licensing fees can be paid according to annual fees. For example, if Apple wants to use more than 100 patents from Bomi, it can be packaged and then charge a fee every year.

The two sides initially discussed and negotiated according to this article, but no one reached an agreement.

The reason for not reaching an agreement is also very simple.

Bomi believes that we have invested a lot of money, manpower and material resources in the research and development of smartphones, and naturally we need to have equal requirements, so the lowest price that Bomi hopes is that Apple needs to pay $130 million in patent licensing fees for Bomi every year.

$130 million?!

When Phil heard this number, he was in a bad mood.

"impossible……"

Apple's mobile phone business has not yet been launched, mainly through the sale of computers and other devices to make profits.

Apple's turnover last year was not as good as China Lenovo, with only US$8.4 billion in revenue. In the next 20 years (patent validity period), it is indeed a bit unbearable.

Apple is similar to Bomi now, and it also costs money like flowing water. If the mobile phone industry wants to expand reproduction, it will inevitably cost a lot of money. It is indeed a bit too embarrassing for them to take out so many patent licensing fees at one time.

So the double hits started a long tug-of-war with this amount.

Seeing the passage of time, Phil later called the United States and held a board meeting remotely. The senior management and Jobs thought for a long time and decided that they could purchase it through another patent license.

Discuss the rate agreement according to the internationally universal licensing rate framework.

What does it mean?

It means that it is not paid according to a fixed amount, but is paid through the sales volume and sales results of the goods.

This set of standards is a relatively common international standard and is more beneficial to some small companies.

For example, there is a domestic manufacturer called Xiao Lajiao who wants to produce smartphones. They cannot pay high licensing fees, so they can obtain Bomi Company's license through the licensing fee rate. For example, if they sell 500,000 mobile phones, each mobile phone needs to pay Bomi Company a licensing fee of 1 USD.

The more sales, the lower the fee you need to pay, but the higher the total expenditure fee, which is the internationally universal licensing rate framework.

In this way, Apple can make expenses on Bomi Company while ensuring that it makes money.

Because the prerequisite for payment is that Apple must be able to sell mobile phones, and the more it sells, the higher the fee it pays.

So everyone returned to the negotiating table and negotiated according to the licensing fee rate.

To be honest, if it weren't for these people who were reluctant to leave, Cao Yang would have wanted to give up and go back to bed.

This is really awesome.

Of course, it is even more painful for the Apple team.

But they had no choice because Apple phone launches is imminent, and Jobs will hold an Apple phone launch conference early next year. If time is delayed, the losses will be very serious.

So although Phil and the others felt very tired, they were really uncomfortable to meet Cao Yang and other Chinese [gangsters], but they had to suffer no matter how difficult it was.

They booked a hotel in the imperial capital for a month and simply stayed here, and they didn't prepare to return to the United States until the negotiations were over.

Regarding Apple's demand, after exchanging the relevant required patents, the price offered by Apple is that each Apple mobile phone needs to pay a patent license fee of US$1.5 to Bomi.

Of course, this price fluctuates.

For 1 to 500,000 units, each Apple pays Bomi $1.5 USD. If the sales range is 500,000 to 1 million, the rate will drop to $1.34, the 1 million to 2 million range, drop to $1.26, and so on…

If it reaches more than 75 million units, the paid rate is US$0.15 per unit.

Obviously, Cao Yang cannot accept this number.

If you sell 200 million Apple phones, we will only charge $30 million?

This is far from the $130 million annual fee that Bomi had previously expected to charge.

Damn... the new plan has lost so much, so Bomi will definitely not accept it.

So Bomi re-proposes the price code and raises the fee rate to:

For 1 to 500,000 units, each Apple pays Bomi $6.5 USD... If more than 75 million units, you need to pay a patent license to Bomi at a price of $1.5 USD per unit.

This is fair, and Bomi Company will also conduct the licensing fees on the market in the future according to this standard.

Because there are too many patents on Bomi, and this time it is obvious that the bargaining power is in Bomi.

"Otherwise, we can discuss the licensing fee separately for each item." Cao Yang said directly.

Phil got into a cold sweat on the spot.
Chapter completed!