24 April 2019
Apple and Qualcomm have reached the licensing settlement after going through a two-year-long battle. Apple announced this by publishing a release on their website stating all the litigations are now getting dropped between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm, however, the amount hasn’t been disclosed.
For those who’re unfamiliar with this matter should know that this lawsuit began in January 2017 and the dispute involved the unusual way Qualcomm licenses its technology to other companies. According to Apple, Qualcomm charges unreasonably high patent fees for smartphone modems and this is the reason the Cupertino-based company had to go with Intel for getting the required modems for its 2018 iPhone lineup.
According to a legal brief that Qualcomm filed, the company charges the handset makers like Apple and Huawei around 5 percent of the total price of a phone for the right to use its technology, up to about $20 per device. For instance, if you’re purchasing a device for $1000, Qualcomm would get $20. So, Qualcomm is getting this licensing fee as well as the amount what a manufacturer would pay for its chips. And, Apple referred this as a double-dipping and said Qualcomm holds a monopoly on high-end wireless chip technologies.
Now, all the litigations are dropped and their dispute is no longer the talk of the tech town. Now, the two companies have reached a six-year global patent licensing agreement, which may get extended for another two years. Furthermore, a multiyear chipset supply agreement has also been made under which Qualcomm would supply its chipset and related parts to Apple over a period of multiple years. However, the terms of the agreement were not disclosed.
Eventually, it’s a good decision as looking at the tech trends, Apple would require the 5G generation wireless networks for its iPhones especially when its rival Samsung is already having a 5G-capable phone on sale using Qualcomm’s products. So, Apple would require such chips that could connect the upcoming iPhones with 5G.
The settlement has brought good news for Qualcomm as its shares rose 23 percent. On the other hand, the shares of Apple have risen a little. Qualcomm said it expected a $2 increase in earnings per share and its stock rose over 20%.