Apple and Qualcomm settle patent fight after one day in court

Huawei talks of selling its 5G chips to Apple | Article

Huawei talks of selling its 5G chips to Apple | Article

Intel Corporation today announced its intention to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices. News of the agreement sent Qualcomm's stock up over 20 percent. It's Qualcomm's best day since 1999.

Apple was up less than 1%. Intel, a Qualcomm competitor, sharply dipped on the news before recovering.

In addition to the federal lawsuit, the companies had lodged litigation in dozens of jurisdictions around the world, including Qualcomm efforts to ban iPhone sales in Germany and China and a state court case in San Diego where Qualcomm accused Apple of helping steal its chip secrets to benefit Intel. Qualcomm demanded $7 billion in royalties while Apple asked for $27 billion in compensation for unfair business practices.

Once Qualcomm stopped paying Apple the $1 billion incentive payment, the latter told its contract manufacturers like Foxconn, Pegatron, Compal and Wistron to stop making royalty payments to Qualcomm; the contract manufacturers usually handle the licensing of parts.

Qualcomm initially filed its first patent infringement back in 2017 arguing that Apple was using patented technology without properly compensating Qualcomm. It also announced a multi-year chipset supply agreement. The amount of the payment was not disclosed.

"We have not had discussions with Apple on this issue", Huawei's rotating Chairman Ken Hu said on Tuesday, adding he looked forward to Apple's competition in the 5G phone market. Analysts said not using Qualcomm would hinder Apple's ability to create a market-leading 5G iPhone. So one can expect 5G chips coming in Apple iPhones until 2023 at least.

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.

In the end, Apple and Qualcomm agreed to dismiss all litigation between them worldwide.

The settlement includes an unspecified payment from Apple to chipmaker Qualcomm.

The news yesterday that the massive, multi-billion dollar legal fight between Apple and chip maker Qualcomm has come to an end has big-time ramifications for Apple - and for the rest of us who use smartphones every day (heck, nearly every minute of every day).

Qualcomm Inc. shares rose $4.25 (+6.03%) in after-hours trading Tuesday. Year-to-date, QCOM has gained 25.23%, versus a 16.61% rise in the benchmark S&P 500 index during the same period.

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