Apple vs Qualcomm settled: 2020 iPhone 5G gets some new options

Alonzo Simpson
April 17, 2019

As long as Apple was battling Qualcomm, Intel could expect to supply chips for all of Apple's iPhones, providing enough scale to justify Intel's hefty investment in developing the technology. For example, in one case, Qualcomm asked a USA federal judge to ban the sale of iPhones. Why did Apple sue Qualcomm?

The Qualcomm settlement means Apple will rely on the chipmaker for most if not all of its 5G modems in iPhones starting in 2020, with Qualcomm likely the leading to only supplier for the next several years, Canaccord Genuity analysts said.

"Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide", an Apple announcement reads. Intel still believes that it can complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices. As a result, the face of the cellular modem market is changing in an instant, as Apple's shift in allegiances will have repercussions throughout the industry.

Apple's litigation chief Noreen Krall chatted privately with Qualcomm attorney Mark Snyder before Judge Curiel called the jurors back into the courtroom.

The settlement includes a payment from Apple to Qualcomm, but the companies did not disclose the amount.

Apple released the news via Business Wire today.

Opening statements will start Tuesday in a San Diego trial over Apple's claims that Qualcomm used its monopoly power as a maker of modem chips for mobile phones to extract excessive patent royalties from phone makers. "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".

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Along with licensing Qualcomm's patents, Apple is also going to resume buying chips from Qualcomm.

Qualcomm Inc. shares rose $4.25 (+6.03%) in after-hours trading Tuesday.

Apple is behind rivals such as South Korea's Samsung Electronics Co and Huawei in delivering a phone equipped with fifth-generation (5G) modems that is expected to provide fresh momentum in a slumping global smartphone market.

Qualcomm had also accused Apple of using the legal system as a way to pay less for its technologies.

Following its initial USA lawsuit, Apple filed two more suits in China on the same basis.

According to Nikkei, Apple has indeed been concerned that Intel would not be able to meet its 5G schedule, and this is what may have prompted the Qualcomm settlement.

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