Chip war ends in Apple-Qualcomm deal

Apple and Qualcomm Settle Sweeping Patent Suits -

The settlement includes a payment from Apple to Qualcomm for an undisclosed sum. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share.

Still, it's not clear whether Apple's settlement with Qualcomm forced Intel to leave the 5G market or whether Intel's impending exit from the 5G market forced Apple to settle with Qualcomm. As you might imagine, billions of dollars are up for grabs in this case and both Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf are expected to testify.

According to Apple, this allowed Qualcomm to leverage "its market power to extract exorbitant royalties" and the company later only agrees to lower the royalty rates "in exchange for additional anticompetitive advantages and restrictions on challenging Qualcomm's power, further solidifying its stranglehold on the industry".

Apple and Qualcomm have ended their contentious legal battle over microchip royalties with a surprise agreement to drop all litigation worldwide.

Intel says that it will honor existing contracts for 4G chips and is re-assessing "opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices". Furthermore, it shows how hamstrung Apple was without Qualcomm: Its agreement with Intel to supply mobile chipsets, especially for modems, has been a disaster.

The epic legal battle started in January 2017 when Apple sued Qualcomm for almost $1 billion.

Perhaps now that Apple is well on its way to developing and manufacturing its own chipsets, it wont rely on Qualcomm as much as it had in the past.

This brings an abrupt end to the complicated legal battle between the two firms, which began when Apple accused Qualcomm of charging more than it should on patents "for technologies they have nothing to do with."

Shortly after the patent armistice was announced on Tuesday, Qualcomm's stock price was up more than 22 per cent.

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

The stakes are high for Qualcomm, which earns a significant chunk of its revenue from royalties paid by manufacturers for its patented technology.

Until the past couple of months, rumours making round on the web indicated that Apple is banking on Intel for 5G modem chips for future iPhone handsets. The antitrust case was originally filed by Apple in early 2017.

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