Apple and Qualcomm end legal fight over chipset licensing

Apple and Qualcomm end legal fight over chipset licensing

That could be why they chose to put an end to their legal battles, why they entered years-long agreements despite their contentious relationship, and why Qualcomm shareholders have reacted so favorably to the news.

However, Apple and Qualcomm weren't always at loggerheads; prior to the legal proceedings, Apple had relied on Qualcomm chips for its iPhones until 2015, after which it started using Intel chips for the iPhone 7 series and so on. It also revealed they've signed a six-year license agreement, effective from 1 April 2019. In 2017, Apple filed an anti-trust lawsuit against Qualcomm for $1 billion. The iPhone's competitors would be able to offer 5G capabilities using Qualcomm chips, while Qualcomm could have denied Apple access to 5G chips as long as the patent battle continued.

A jury of six men and three women was in the process of hearing opening arguments from Apple's and Qualcomm's lawyers, at a federal court in San Diego, when news of the settlement broke. The case was expected to last until May.

Qualcomm stock was trading at roughly $58 per share before the news broke, and is now trading at nearly $70 per share. That doesn't mean that Apple will make a 5G iPhone this year, but a new report that surfaced after the settlement news claims that we'll have a 5G iPhone in stores only in 2020.

Today is a day few of us thought would ever come: Apple and Qualcomm have called a truce and ceased all litigation against each other around the world. Apple had begun to have misgivings about that deal as it added more features to its increasingly popular line-up of iPhones. Huawei recently offered to provide 5G modem chips to Apple, but rumours indicated that Huawei could face issues because of its not-so-good-history with the United States government.

Because Qualcomm is already shipping 5G chips while Intel was still developing them, the deal helps Apple in its battle with Samsung Electronics Co Ltd and other manufacturers whose phones already work on the faster networks.

Apple had claimed that Qualcomm had abused its patent-driven dominance to charge excessive royalties.

As long as the dispute was ongoing, Apple was likely going to have to use chips from Intel, and Intel is reportedly "behind schedule" on producing a 5G chip. "We are very excited about the opportunity in 5G and the "cloudification" of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns", said Intel CEO Bob Swan. The San Diego company's stock soared 23% to close Tuesday at $70.45.

Intel did not immediately respond to Reuters request for comment.

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