Apple Pays Whopping $6bn To Settle Qualcomm Dispute

Ruben Fields
April 22, 2019

Qualcomm Inc.'s fortune seemed to be feathered up, as Apple's sole iPhone chip supplier for past few years, Intel Corp., had chose to evade its modem chips business following Apple's settlement with Qualcomm Inc.

Shares of the US mobile chipmaker notched a 4-day winning streak in the trading week shortened by Good Friday, bringing week-to-date gains to 40.28 percent, triggered by the continued optimism on Apple-Qualcomm deal.

Apple first announced it was suing Qualcomm back in January 2017 over allegedly unfair patent fees for smartphone modems, after which the two companies got to work taking pot shots at one another.

After the news was made public, a spokesperson of Intel stated that the company will not manufacture 5G modems for mobile phones.

Followed by the announcement of resolving the lacerating patent dispute on Tuesday (April 16th), Qualcomm Inc. shares were up by 23 percent at the day's market closure.

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And because the collaboration between Apple and Qualcomm will continue, the Cupertino-based tech giant will continue to pay royalties for the tech it uses on the iPhone.

Analysts had previously said that the dispute between Qualcomm and Apple could slow down Apple's plans to support next-generation 5G networks.

Techpolis an industry research company head Ricardo Tavares, revealed 5G is clearly driving the agreement between the two tech firms. Another Apple memo described Qualcomm as having a "unique patent share" and "significant holdings..." The Intel 7560 modem chips used on the 2018 iPhone models were manufactured using the 14nm process.

A number of brokerages upgraded their ratings of Qualcomm stock and raised their price targets. Additionally, Apple has allegedly hired RF engineers from both Qualcomm and Intel who are said to be toiling away in San Diego. The dispute, related to modem chips and other issues, has been going around the world for last 2 years, like a previous dispute between US Federal Trade Commission and Qualcomm.

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