One of the most intense high tech legal battle in the recent has now finally come to an end. Smartphone maker Apple and chipset manufacturer Qualcomm has announced that the companies are settling their lawsuits.
Effective immediately, all litigation between the two companies has been dropped, and the companies have signed a new patent license and chip supply agreements. The companies have not shed light on the details as the agreement is largely a private matter.
The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones. However, the companies did not say how much the payment will be.
It seems that Apple will be making a one-time payment to Qualcomm to cover any IP use since Apple cut off payments to Qualcomm in 2017. Apple has also signed a 6-year patent license agreement with Qualcomm, which is being backdated to April 1st. The agreement includes a further 2-year extension option, which if Apple eventually chooses to exercise it, would take the agreement through April 2027.
Apple will also resume buying chips from Qualcomm. The companies have also signed a separate chipset supply agreement and the official announcement doesn’t say for how long beyond the fact that it’s a “multiyear” agreement. This suggests that the Qualcomm is once again going to be supplying modems for Apple’s iPhones and iPads.
Soon after the announcement went public, Intel announced that it is exiting the 5G smartphone modem business. However, the company said that it will continue to invest in its 5G network infrastructure business. It’s noteworthy that Intel was the sole supplier for iPhone modems last year but the recent report said that Apple had concerns about Intel’s ability to supply next year’s iPhone models with 5G modems.
After the news about settlement broke, Qualcomm’s stock rose more than 20 percent, boosting its market cap by about $14.5 billion to more than $84 billion. This seems to be Qualcomm’s best day since 1999. Further, Apple was up less than 1 percent but Intel sharply dipped.
