Published: Wed, April 17, 2019
Industry | By Dora Warner

Chip war ends in Apple-Qualcomm deal

Chip war ends in Apple-Qualcomm deal

Apple announced the deal in a press release on Tuesday shortly after the fight went to court in San Diego.

In a sudden and unexpected move, Apple and Qualcomm announced today that they have ended all ongoing litigation and have reached global patent license and chipset supply agreements.

Apple and Qualcomm have ended their contentious legal battle over microchip royalties with a surprise agreement to drop all litigation worldwide. Further, the settlement agreement "includes a payment from Apple to Qualcomm", though a specific figure was not disclosed.

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The royalty agreement - pertaining to the licensing of Qualcomm patents for use in Apple products - will last for six years, effective April 1, 2019.

A high-stakes trial between Apple and Qualcomm kicked off yesterday in a San Diego courtroom. The decision allowed Apple to concentrate on making touchscreen computers and helped turn marketing genius Steve Jobs' project into the most valuable company on Earth.

A woman who has never owned a smartphone is among the nine jurors selected Monday to decide a multibillion-dollar dispute between Apple Inc. and Qualcomm Inc. over the technology used in iPhones. Qualcomm had said Apple was using its technology without paying for it.

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Apple argued that Qualcomm was abusing its position as one of the only suppliers for cellular technology, and Qualcomm contended that Apple was withholding payments that the two companies had hammered out as part of a royalty agreement. Because Intel does not expect to have a 5G chip ready for phones until next year, Bernstein analyst Stacy Rasgon said Apple is most likely tapping Qualcomm for its 5G chip.

Investors sensed a resounding victory for mobile chip maker Qualcomm, bidding up its stock price 23% within minutes of news of the settlement. Apple has famously built its brand around being willing to do what it thought was right rather than kowtowing to market demand, but the company may not be willing to be the only brand not selling a 5G phone at a time when carriers and manufacturers are salivating to provide them. Apple stock rose slightly on the news but has fallen to near its previous level.

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

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The epic legal battle started in January 2017 when Apple sued Qualcomm for almost $1 billion. It's getting a payment from Apple, and a multi-year deal to supply chips for iPhone.

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