Which royalty is the most impressive?

What is the royalty Apple charges for devices which use its 30-pin connector for iPhone, iPod, or iPad?

• I noticed Square did not use this connector, perhaps to avoid this royalty?

• Answer:

  This subject has a long and colorful history. The "Apple iPod Docking Interface" and related connectors are a patented technology of Apple.  To use this technology Apple will charge a Licensing fee. To build an Apple sanctioned and certified device for this Interface you must be a part of the MFi program (http://developer.apple.com/programs/mfi/) and an iOS developer. The Licensing contracts and the ultimate license fee is based on two paths: Licensing under the MFi program Licensing not using the MFi program I will focus on the licensing with out the MFi Program.  As the MFi program was very costly,  Apple charged up to 10% of the selling price or $10, what ever was greater.  You would also have to allow Avent to manufacture your connectors (https://mfi.avnet.com/MFI/). The old non MFi license structure was 1.5% - 8%.  Today it is $4 per connector on a product.  A "Pass-through" connector would = 2 license fees. So Why Did Square Bypass The Docking Interface? It is my postulation that Square choose the audio port because of a number of reasons.  The primary reasons are: Simplicity-  Using the genius concept of the "Hall-Effect" (movement in a magnetic field creates current), the actual swipe of the card powers the unit.  This means no batteries. Compatibility- The audio port is pretty much standardized across brand platforms. This thinking allowed Square to be compatible with the Android platform rather quickly.  I am sure at one time they were also going to develop for the Blackberry platform. Size- The size of the Square device is far smaller as there is no need of a battery of any high order digital electronics.  The Square uses very reliable components that are relatively simple and fit a very small form factor. Cost- Because of the very creative way the Square electronics operate, the cost to manufacture is in the sub dollar amount if produced in 100,000+ production cycles. To distribute a device for no cost to the merchant, manufactured for less then $1, yet pay Apple $4 to $8 (with a pass through for a charger) would make little sense. The rest is history that will likely become a Harvard business case example to future business leaders. The other point was that at the time Square was conceived (iPhone 1), Apple locked out any use of the Docking Interface for other then a thin set of Audio products.  They also did not yet have Apps, and even when Apps were introduced, there was a limit on what one could do with the Docking Interface.  In fact it still is limited. The future will hold some exciting changes for the new versions of the Square Card Reader.  The mad scientists, wizards and artists at Square are cooking up some amazing surprises for the world of Payments with Version 2.