The iPhone used to rely entirely on Qualcomm's chips, but from 2016 Apple started using rival Intel's modem chips in some models. This was reflected in the market as the company's stocks jumped up 23 percent after the settlement news broke out.
The massive Apple-Qualcomm legal spat is now over, as the two companies on Tuesday announced they've made a decision to settle the matters between them and drop all litigation that involved licensing and intellectual property matters. As you might imagine, billions of dollars are up for grabs in this case and both Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf are expected to testify.
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.
In addition to calling it quits on 5G modems for smartphones, Intel is also reassessing its commitment to 4G LTE and 5G modems for PCs and IoT devices. Its delay would create a potential delay for Apple and as yours truly has suggested Apple could not risk not having an iPhone 5G in 2020.
A year later, Apple had switched to making its phones with Intel chips and filed a suit against Qualcomm asking for that $1 billion and a lower royalty rate.
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According to the release, the settlement involves a payment from Apple to Qualcomm for an undisclosed amount, a six-year license agreement effective as of April 1 2019, which includes a two-year option to extend.
In 2015, Qualcomm paid a $975 million fine to settle Chinese government claims that it charged too much for technology royalties. And he did this by pointing out that an iPhone can still function without Qualcomm's modem chip by using Wi-Fi.
While smartphone providers like Samsung and Motorola have already announced plans for 5G phones, Apple lags behind. Either Qualcomm had evidence so strong that Apple didn't think it would win the case, or Apple needed something only Qualcomm could provide.
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. Apple executives testified in January at a trial between the U.S. Federal Trade Commission and Qualcomm that Apple's policy is always seek several suppliers.
A jury of six men and three women was in the process of hearing opening arguments from Apple and Qualcomm when news of the settlement broke.