New info from Benstein Analytics. Apple is effectively also dodging Qualcomms patents. "Apple pays an estimated 1.6% of iPhone revenues to QCOM, most OEMs pay about 4%, giving Apple “a unique profitability edge. Given that iPhone gross margins are ~60%, Apple is effectively paying royalties on just 40% of the iPhone’s average wholesale ASP, vs. 100% for its handset OEM peers." "The Bernstein analyst notes that the implications of this are material, adding by his estimates more than $280 million in operating profit for Apple in FY 2009, and over $400 million in FY 2010, “ostensibly at Qualcomm’s expense.” Bernstein Analytics doesn't know know what Qualcomm will do to "address the situation", which I assume is american corporate talk for whetever Qualcomm will sue or not. Those fat iPhone profit margins are starting to make sense now.