Published: Wed, April 17, 2019
Money | By Ralph Mccoy

Apple And Qualcomm End Global Court Battle And Are Best Buds Again

Apple And Qualcomm End Global Court Battle And Are Best Buds Again

The massive Apple-Qualcomm legal spat is now over, as the two companies on Tuesday announced they've chose to settle the matters between them and drop all litigation that involved licensing and intellectual property matters.

But two sides started bickering when Apple decided, instead, to explore working with Intel for the iPhone's chips. Analysts said not using Qualcomm would hinder Apple's ability to create a market-leading 5G iPhone. This was reflected in the market as the company's stocks jumped up 23 percent after the settlement news broke out.

Apple needs a bunch of modems for upcoming iPhone models, and Qualcomm needs to sell a bunch of modems to keep its shareholders happy. The company has been developing its own modems but those weren't expected to be ready until 2020 at the earliest, with 2021 being a more realistic date.

Qualcomm had accused Apple of violating around 16 patents, and Apple, in turn, imposed further accusations of infringement of about seven to eight patents based on power management.

Qualcomm denied that its licensing practices were anti-competitive and stated that its policies "have been standard in the cellular industry since its inception" and its royalty rates "have been accepted by hundreds of licensees".

Neither Apple nor Qualcomm would comment beyond a brief statement announcing they had resolved their differences.

The Qualcomm settlement also incorporates a six-year patent license and a payment from Apple to Qualcomm, but the companies did not disclose the amount.

On Tuesday in a San Diego courthouse, both Apple and Qualcomm have unexpectedly settled all their legal disputes.

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Chipmaker Intel has announced today that it will be cancelling production of it's 5G modems.

The deal could help Qualcomm return to the preeminent position it held in the early 2010s when it dominated the transition to 4G mobile networks and expanded revenues dramatically.

Apple said it had been overcharged by billions as a result and, following its initial U.S. lawsuit, the iPhone maker filed two more suits in China on the same basis.

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

Qualcomm still faces other potential fallout from its demands to be paid royalties in addition to the fees it charges for its mobile chips.

Bond investors also joined in, with Qualcomm's 4.3 percent 2047 issuance becoming one of the most heavily traded bonds in the US corporate space on Wednesday, according to capital markets publication IFR.

CNBC was the first to report the settlement, with confirmation from Apple and Qualcomm coming shortly afterward Tuesday.

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