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Apple and Qualcomm Settle Dispute Over iPhone Technology

17 April 2019

Apple and Qualcomm were involved in a series of lawsuits throughout the world, including one in San Diego in which Apple was ordered to pay Qualcomm $31.6 million for violating patents for Internet connection, shifting web traffic and graphics processing, and battery life.

Given that Apple is now Intel's only customer for 4G LTE smartphone modems, and the company is already reportedly behind schedule with its first-generation 5G modem, the news of the Qualcomm settlement was probably just too much for Chipzilla to bear.

In a surprise move, Apple and Qualcomm finally agreed to end their long-term beef, and sign a six-year license agreement deal. This means that the pair will stop any further litigation (as far as this particular matter is concerned).

The settlement came just as both companies were beginning a $30 billion federal court trial over just one aspect of the case.

Qualcomm stock rose more than 20% after the news broke, boosting its market cap by about $14.5 billion to more than $84 billion.

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The comments come a day after Reuters reported, citing sources and documents, that the United States will push allies at a meeting in Prague next month to adopt shared security and policy measures that will make it more hard for Huawei to dominate fifth-generation (5G) telecommunications networks. The Federal Trade Commission sued Qualcomm in January 2017 as well, and over the same complicated reason.

At the heart of the battle are the royalties Qualcomm charges for its patented chips, which enable smartphones to connect to mobile networks. While Apple claims some of Qualcomm's patents aren't valid, Qualcomm accuses Apple of violating them - and has sought to ban iPhone sales or imports in several countries, including the US. 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. While Qualcomm and Apple can now work together, it doesnt mean that it will rely entirely on Qualcomm like the majority of Android smartphone makers do. Apple claimed Qualcomm abused its position as the primary supplier of cellular chips and was overcharging for chips, using anti-competitive and monopolistic practices.

The tech giants Apple and Qualcomm avoided extending an already gruelling three-continent legal battle by settling their years-long disputes on Tuesday.

Qualcomm CEO Steve Mollenkopf said in November that his company and Apple were close to reaching an agreement in the patent dispute. Ahead of Apple and Qualcomm burying the hatchet, Intel acted as a bit of a bargaining chip for Apple by supplying modems for some iPhone models despite generally offering weaker performance than the Qualcomm alternatives.

Apple and Qualcomm Settle Dispute Over iPhone Technology