Apple and Qualcomm Settle Sweeping Patent Suits

Apple and Qualcomm Settle Sweeping Patent Suits

"A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court". Following initial lawsuits, Apple had to rely exclusively on Intel to provide LTE modems for iPhones, thus eliminating its reliance on Qualcomm, until now, it seems.

The companies also came to six-year license agreement, effective April 1, as well as a multiyear chipset supply agreement. This particular court battle was over unpaid royalty rebates, and was taking place in court in San Diego, California.

Apple and Qualcomm agreed Tuesday to dismiss all legal disputes between the two companies worldwide.

Prior to the Qualcomm settlement, Intel was Apple's sole modem supplier for the iPhone XS and XR.

A high-stakes trial between Apple and Qualcomm kicked off yesterday in a San Diego courtroom. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share. Apple had begun to have misgivings about that deal as it added more features to its increasingly popular line-up of iPhones. Now that Apple will be standardizing on Qualcomm modems going forward, Intel's hopes of growing (or even maintaining) its mobile modem business were effectively reduced to zero.

Apple and Qualcomm have settled their patent royalty dispute.

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Apple and Qualcomm are not announcing the overall financial details of the deal - how much Apple is paying in royalties, nor how much the one-time payment is.

As a result of this legal wrangling, Apple resorted to exclusively using communications chips from Intel. As for now, the company has announced 1000+ Apple engineers are working on a custom 5G modem. With the Apple-Qualcomm row in full swing, Apple had started using Intel's components instead - but with Qualcomm apparently now back on good terms, that could well change.

Apple had claimed that Qualcomm had abused its patent-driven dominance to charge excessive royalties.

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. Qualcomm typically doesn't allow customers to buy their chips unless they license their patent portfolio first. The resolution abruptly ended that trial, which also involved Apple's key iPhone suppliers.

Qualcomm countered saying Apple had been stealing its tech and won a couple of victories in Germany and China that meant Apple had to stop selling certain iPhone models in those countries.