Apple, Qualcomm Truce May Pave the Way for 5G iPhone
The war is over. Apple and Qualcomm today announced a settlement that includes the end of all litigation between the two companies as well as a global patent license agreement and a chipset supply agreement.
The settlement includes a payment from Apple to Qualcomm, the companies said, but they did not provide any details.
"The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement," the two firms wrote in a joint release. No more details were provided.
Qualcomm's shares were up $13.27 (23.21%) to $70.45 in regular trading on Tuesday. Intel shares remained relatively unchanged.
As noted by the Wall Street Journal, Qualcomm was Apple's exclusive chipset supplier for the iPhone from 2011 to 2016, with Apple paying Qualcomm roughly $7.50 in royalties for every iPhone it sold. Then, with the 2016 iPhone, Apple added Intel as a chipset supplier.
In January 2017 Apple slapped Qualcomm with a lawsuit alleging the company was overcharging for access to its patents. The resulting, bruising legal battle spanned courtrooms across the globe. This week lawyers for the companies prepared opening arguments in a San Diego courtroom to kick off another round of legal warfare.
Why this matters
The settlement brings to an end a massive, global, two-year battle between one of the world's most valuable technology brands and the wireless industry's biggest vendor for smartphone chipsets. And the result, according to some industry observers, could be a new chipset supply agreement between Qualcomm and Apple wherein Apple would sell a 5G iPhone running chips from Qualcomm.
There are definite winners and losers in @Qualcomm @Apple settlement... Winners: @Apple gets #5G chips in timely fashion, @qualcomm gets royalties and sells chips, Contract Mfrs no longer have suit hanging over head. Losers: unlikely @Intel sells modems to Apple. #aaplqcom— Jack Gold (@jckgld) April 16, 2019
Qualcomm recently announced its second-generation 5G product for smartphones, a move that analysts said put Qualcomm ahead of rival Intel.
Intel promised its own 5G chip would be in commercial products by 2020.