Apple and Qualcomm settle billion-dollar lawsuit

Qualcomm and Apple Settle Long-Running Patent Royalty Dispute

Qualcomm and Apple Settle Long-Running Patent Royalty Dispute

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

Intel's decision to "exit the 5G smartphone modem business" comes right on the heels of that settlement, and helps explain, I think, why Apple did settle: The Intel 5G parts weren't just late, they might never have arrived in a viable form.

A year later, Apple had switched to making its phones with Intel chips and filed a suit against Qualcomm asking for that $1 billion and a lower royalty rate.

The Cupertino company says Qualcomm withheld payments it owed as a means of retaliation for Apple's cooperation with South Korean investigators.

Apple will also resume buying chips from Qualcomm.

The companies appeared in court on Monday in a trial that was expected to last for four to six weeks in San Diego.

Qualcomm stock rose over 15% on the news of the settlement.

The Mueller Report Is Coming Thursday - Slog
Information that's expected to be redacted includes materials related to the grand jury and pending investigations. The news comes despite mounting calls from Democrats to first release the report to Congress without redactions.

Obviously, the media were quick to link this news with another recent and quite tectonic movement in the industry - the legal settlement between Apple and Qualcomm. Either Qualcomm had evidence so strong that Apple didn't think it would win the case, or Apple needed something only Qualcomm could provide.

Apple had been seeking billions of dollars over what it claims are exorbitant fees Qualcomm allegedly charged for the use of Qualcomm chips in iPhones, while Qualcomm alleged that Apple breached its licensing agreements to use Qualcomm's intellectual property by refusing to pay billions in fairly charged royalties.

Qualcomm said it anticipates the agreement to add US$2 per share to its earnings when it begins shipments of chips to Apple.

This unexpected news sparks life into rumors about whether Apples 2020 iPhones would indeed feature 5G modems built by Qualcomm or Intels as initially planned.

This turn of events highlights just how much Qualcomm and Apple rely on each other. Apple executives testified in January at a trial between the U.S. Federal Trade Commission and Qualcomm that Apple's policy is always seek several suppliers. Although Apple and Qualcomm have reconciled, it is estimated that the 5G version of the iPhone will wait until the second half of next year and this means that it will lose a lot of shares. The San Diego company's stock soared 23% to close Tuesday at $70.45.

These comments have now been undermined by rotating chairman Ken Hu, who told the company's annual global analyst summit in Shenzhen that it had no plans to enter the handset chipset market and looked forward to competing with Apple in 5G smartphones. MediaTek was regarded not up to the mark, Intel reportedly was running behind deadline.

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