The continuing Snap executive exodus

Snap, the company behind Snapchat, is not having a great run right now. Not only is the stock flirting with sub $5 territory on a daily basis, it's under investigation by the SEC and doesn't seem to be able to retain executives for long. Now it's lost its CFO, Tim Stone, only eight months in:

Stone moved to Snap in May, after working at Amazon for 20 years. He had a $500,000 a year salary at the social app company, and $20 million in restricted stock, with an option to buy 500,000 common shares. Stone will not get the majority of the stock components, which were scheduled to vest over four years.

It's hard to say what's next for Snap with pressure rising to prove it can turn things around. The IPO was in March 2017, just under two years ago, and at the time the IPO seemed promising, but Snap struggled almost immediately as Instagram continued to clone features to acquire its potential users.

Snap has other bets outside of its core product, like Snap Spectacles, but those haven't exactly been a success yet either. It calls itself a camera company, rather than one that makes a single app, despite little really coming to fruition since separating itself from its original category.

At most companies in this kind of peril, investors would probably start asking for the CEO, Evan Spiegel, to resign... but luckily for Spiegel, he happens to own more than 70 percent of voting shares along with his father. I'm guessing that won't even come up for a long time, but we're near territory where someone might just acquire Snap and swallow them whole instead.

I opened Snap today for the first time in at least a year, and as a formerly avid user just two years ago, it seems like a ghost town. I'm sure it has pockets of avid users around, but it's increasingly difficult to lure them back as time goes on – though it's worth noting that Twitter somehow pulled it off, so I wouldn't write it off yet.

Apple vs Qualcomm: pointing the royalty blame

The big splashy Apple vs Qualcomm antitrust case is weaving its way through trials right now, and dramatic snippets are emerging about how Apple alleges the company is rigging the market:

But it won't provide Apple with processors for the newest iPhones for 2018, designed since the two began fighting over patents, he said. And Williams believes the royalty rate Apple paid for using Qualcomm patents -- $7.50 per iPhone -- is too high. 

The FTC says Qualcomm has a monopoly on wireless chips, but if this is true, why could Apple so easily switch to Intel's chips? Well, until those arrived, there was little choice outside of Qualcomm in the industry that performed to the same level.

According to the CNET report about the hearings (warning: terrible autoplay video on site), Apple will be "late" to the 5G market because Intel won't be ready in 2019, while Qualcomm is, but given our previous coverage of 5G, it's likely that won't matter at all.

The reason we're here in the first place, however, is because Qualcomm demands a license for the chips as well as paying for the chips themselves... and that license is a percentage of each phone's total cost. That's not good for Apple, given it charges the most in the market, but it's great for Qualcomm.

Those licenses exist to allow chip buyers to get all of Qualcomm's patents in one payment, but Apple didn't want those, it just wanted the chips and nothing else because it had its own intellectual property. So, Qualcomm retaliated and wouldn't sell them to Apple for the iPhone Xs or Xr. 

This whole lawsuit is a rabbit hole of giant rich mega-corporations upset about IP, legalese and legal gotchas, so it's expected to go on forever.

What will be interesting is if Qualcomm is found to be an abusive entity in this whole dance: it might be forced to open up the market entirely, reducing prices drastically for consumers and encouraging competition on fundamental parts of the devices we're all using every day. Or, it might just get slapped with a fine and told to stop it.

We're a long way out from a verdict, but for some light reading, Gizmodo has a great overview of all the ways this thing could end up going. Sit tight, it'll be a long ride.

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