Apple and Qualcomm Settle Patent Disputes
As Apple and Qualcomm geared up for the beginning of a lengthy legal battle over patent disputes starting April 16, Apple released a surprise announcement regarding a settlement between the two technology giants. The announcement stated that Apple has agreed to pay an undisclosed settlement fee to Qualcomm in return for a global patent license agreement, a chipset supply agreement, and an end to all ongoing litigation.
As a result of this announced settlement, Qualcomm’s shares jumped almost 30 percent to end the day at a ticker price of $70.45. The markets reacted to this move with optimism, with this agreement giving Qualcomm the potential to supply 5G chips for one of the largest smartphone manufacturers. Later in the day, Intel released its press release to announce that it would no longer be pursuing mobile 5G chipsets, focusing instead on pivoting their 5G efforts to data-centric approaches.
Intel is Apple’s current 4G chipset provider for iPhones, but there has been a lot of speculation about Intel being incapable of creating a timely solution that is relevant to the push for the adoption of 5G. With Apple running out of choices, it had few options besides turning to Qualcomm’s 5G chipset that has already begun to make its way into Samsung’s flagship smartphones. With the wave of 5G phones projected to pick up in late 2019 and into 2020, Apple could not afford to rely on Intel coming to market with a chipset in time for the next generation of iPhones released either this year or next year.
Despite years of litigation battles, this blockbuster agreement between Apple and Qualcomm sets the stage for a mutually beneficial relationship that can facilitate the introduction of 5G-capable smartphones by 2020. With Apple as one of the largest smartphone manufacturers in the world, an agreement to supply the tech giant with modems for six years is a huge win for Qualcomm.