Qualcomm and Apple abruptly drop all litigation

Ceria Alfonso
Abril 17, 2019

Qualcomm also held another bargaining chip: It makes the modem chips needed for future smartphones to work with the next generation of high-speed wireless networks known as "5G". Replacing those lawsuits, Apple has signed a 6-year patent license agreement with Qualcomm, which is being backdated to April 1. This means that the pair will stop any further litigation (as far as this particular matter is concerned). That said, while Qualcomm's battle with Apple is over, the company still has to tangle with the Federal Trade Commission who filed suit against Qualcomm concerning possible patent abuse.

In a surprise announcement, the two companies revealed that they have agreed to drop all litigation against each other, bringing an end to a dispute over royalities and patent infringements that spanned multiple countries.

Technology giant Apple has settled a wide-ranging legal dispute with chipmaker Qualcomm in an eleventh-hour settlement. News of the agreement sent Qualcomm's stock up over 20 percent. More recently it was reported that Intel was running behind schedule and Apple was considering tapping on the shoulders of other OEMs such as Samsung, Huawei and even MediaTek. With a mobile network transition toward 5G technology underway and Intel's 5G modems stumbling, and Qualcomm's 5G Snapdragon family looking good, Apple may have chosen to pay Qualcomm rather than face potential supply chain problems with Intel.

New iPhone models released in 2018 used Intel modem chips instead of Qualcomm's technology.

Qualcomm countered that Apple was withholding payments that were expected as part of a royalty agreement between the two companies. Intel, a Qualcomm competitor, sharply dipped on the news before recovering.

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Qualcomm has an extensive patent portfolio covering numerous technologies used in smartphones and derives a significant amount of its annual revenue through licence payments from phone makers.

The battle started two years ago when Apple accused Qualcomm of using their patents for extortion. Apple stock increased by 2 cents to $199.25. Huawei recently offered to provide 5G modem chips to Apple, but rumours indicated that Huawei could face issues because of its not-so-good-history with the United States government.

Apple and Qualcomm have been fighting in court for years.

Finally, the U.S. FTC case against Qualcomm that makes numerous same claims of anticompetitive behavior remains unresolved, with a decision expected at any time.

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