Apple and Qualcomm Bury the Hatchet; Sign New Patent and Chip Supply Agreements

Putting an end to one of the most intense high tech legal battles in recent memory, this afternoon Apple and Qualcomm announced that the two firms were burying the hatchet. Effective immediately, all litigation between the two companies has been dropped, and the two have signed new patent license and chip supply agreements. As a result, the face of the cellular modem market is changing in an instant, as Apple’s shift in allegiances will have repercussions throughout the industry.

Overall, the joint press release put out by the two companies is very short on details, as the agreement is largely a private matter. To settle their legal affairs, Apple will be making a one-time payment to Qualcomm, presumably to cover any IP use since Apple cut off payments to Qualcomm in 2017. Replacing those lawsuits, Apple has signed a 6-year patent license agreement with Qualcomm, which is being backdated to April 1st. The agreement includes a further 2-year extension option, which if Apple eventually chooses to exercise it, would take the agreement through April of 2027.

Along with licensing Qualcomm’s patents, Apple is also going to resume buying chips from Qualcomm. A separate chipset supply agreement has been inked; though the official announcement doesn’t say for how long beyond the fact that it’s a “multiyear” agreement. Interestingly the word “modem” does not appear once in the press release itself, but from the nature of the two companies’ conflict and Apple’s own needs, clearly Qualcomm is once again going to be supplying modems for Apple’s iPhones and iPads.

As noted by Reuters, the sudden nature of the deal took many people by surprise. Apple and Qualcomm announced the deal as the two companies were simultaneously in federal court in San Diego, arguing their cases on day 2 of what was their ongoing trial. That trial is now over, as are all of Qualcomm and Apple’s other legal tussles across the world.

Apple and Qualcomm are not announcing the overall financial details of the deal – how much Apple is paying in royalties, nor how much the one-time payment is. However Qualcomm has put out a summary slide disclosing that as product shipments ramp, the company is expecting the deal to bring the company’s incremental earnings to around two dollars per share. Which goes to show just how big of a deal this is in terms of sales and volume, and how important it was for Qualcomm to bring Apple back on board. Accordingly, as noted by CNBC, Qualcomm’s stock had its best day since 1999, with the stock jumping up 23% during market hours, and a further 7% after-hours.

Apple and Qualcomm Bury the Hatchet; Sign New Patent and Chip Supply Agreements 1

Overall, the consequences of the deal are significant. Qualcomm has been accused across the globe of FRAND violations and other anti-competitive behavior, with Apple serving as Qualcomm’s fiercest critic in this area. While various regulatory cases are still going on – particularly in the US – settling with Apple means that the company will no longer be petitioning regulators and government officials to rule against Qualcomm. So while indirect, this could remove a lot of pressure against Qualcomm in their ongoing regulatory cases.

Meanwhile, Apple’s shift in allegiances has led to their alternative modem supplier, Intel, to drop out of the 5G smartphone market entirely. A few hours after the Qualcomm settlement was announced, Intel made its own announcement that it was exiting the 5G smartphone modem business, and will be reevaluating the rest of its client modem business. So in the span of a day, the 5G modem market has already lost a competitor.

On that note, however, it’s interesting that the chip supply agreement between Apple and Qualcomm isn’t for the same fixed length as their patent agreement. Apple has developed a well-earned reputation for going their own way in chip development, and this may be a sign that Apple intends to eventually develop their own modem technology. This could prove especially prudent, as it would allow Apple to integrate a modem directly into their A-series SoCs, doing away with the need for an external modem and freeing up some valuable PCB space. Fittingly, this is one of Qualcomm’s greatest strengths in the Android SoC space, as the company routinely offers SoCs with various integrated modems.

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews

Crypto Scams

Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
Beanstalk Farms Loses $80M In A Massive DeFi Governance Flash-Loan Hack
April 23, 2022
Prove
Joon Pak Head of Crypto at Prove talks to Us about Crypto Fraud And More
April 11, 2022
Mintable
Mintable CEO Zach Burks Talks to Us about the Opensea Stolen NFTs and Their Recovery
March 21, 2022
Crypto Crime
Crypto Crime Surges To Record Highs As Thieves Follow Market Buzz – Chainalysis 2022 Report
February 24, 2022
Bots Circumvent 2FA Login At Coinbase And Other Crypto Exchanges In 2022
Bots Have Circumvented 2FA Logins At Coinbase And Other Crypto Exchanges In 2022
February 17, 2022

Automated trading with HaasBot Crypto Trading Bots

Blockchain/Cryptocurrency Questions and Answers

Russia
Roundtable Interview-What is the Effect of The Russia-Ukraine War on Cryptocurrency Prices?
March 4, 2022
GamStop
How Does Bitcoin Casino Work + 2021 Beginner’s Guide
November 8, 2021
Cryptocurrency
How to Buy and Sell Cryptocurrency
November 8, 2021
What Are Bitcoin Futures And How Will They Work In 2022?
November 4, 2021
Ethereum
The Unconventional Guide to Ethereum
October 28, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin29,617 0.70 % 0.24 % 2.94 %
Ethereum1,886.7 1.38 % 3.37 % 1.49 %
Tether1.002 0.19 % 0.12 % 0.14 %
USD Coin0.9989 0.16 % 0.08 % 0.04 %
BNB314.96 0.80 % 3.19 % 9.27 %
XRP0.3989 1.03 % 1.03 % 1.86 %
Binance USD1.000 0.43 % 0.00 % 0.14 %
Cardano0.9566 0.22 % 0.68 % 6.96 %
Solana45.84 2.04 % 4.55 % 7.88 %
Dogecoin0.07994 0.33 % 4.42 % 4.82 %

bitcoin
Bitcoin (BTC) $ 29,446.00
ethereum
Ethereum (ETH) $ 1,868.98
tether
Tether (USDT) $ 1.00
usd-coin
USD Coin (USDC) $ 1.00
bnb
BNB (BNB) $ 313.38
xrp
XRP (XRP) $ 0.395979
binance-usd
Binance USD (BUSD) $ 1.00
cardano
Cardano (ADA) $ 0.494487
solana
Solana (SOL) $ 45.33
dogecoin
Dogecoin (DOGE) $ 0.079714