Apple, Qualcomm agree to end all legal disputes

Viva Tung  CNET

Viva Tung CNET

It means that Intel will not supply the modem for the 5G iPhone, but the company says it will continue to invest in its 5G network infrastructure business. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share.

Hours after the Apple-Qualcomm settlement was announced, surprise, surprise, Intel declared it will quit building 5G modems for smartphones.

Qualcomm said it expected a $2 increase in earnings per share and its stock rose over 20%.

"The multiyear deal is a huge vindication for Qualcomm", analyst Ben Wood told the Financial Times, "and likely an acknowledgment by Apple that it had run out of options".

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Qualcomm CEO Steve Mollenkopf said in November that his company and Apple were close to reaching an agreement in the patent dispute.

"All litigation between the two companies worldwide" has been dropped, the firms said in a joint statement. It will also "complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices". The iPhone-maker accused Qualcomm of charging a higher fee for using their patents if they chose a competitor's product.

Later Qualcomm hit back with its own lawsuit, alleging that Apple used its heft in the electronics business to wrongly order contract factories such as Hon Hai Precision Co Ltd's Foxconn to withhold royalty payments from Qualcomm that Apple had historically reimbursed to the factories. The case was originally filed by Apple in January 2017, but the litigation became complicated with Qualcomm countersuing.

The news yesterday that the massive, multi-billion dollar legal fight between Apple and chip maker Qualcomm has come to an end has big-time ramifications for Apple - and for the rest of us who use smartphones every day (heck, nearly every minute of every day).

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Apple gets to break its dependence on a single chip maker and Qualcomm gets to do business with a large customer. Certainly, Apple has an incentive to move forward with 5G phones as soon as possible, without the specter of patent disputes hanging over its technology.

According to ZDNet's sister site CNET, an Intel spokesperson declined to comment on whether the decision behind Intel's exit occurred before the settlement or was in response to the new agreements between Apple and Qualcomm. "The settlement includes a payment from Apple to Qualcomm".

While smartphone providers like Samsung and Motorola have already announced plans for 5G phones, Apple lags behind.

Following its initial U.S. lawsuit, Apple filed two more suits in China on the same basis.

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