Apple and Qualcomm agree surprise settlement
The long legal dispute between the two is over after an agreement to drop all lawsuits
Apple and Qualcomm have agreed to settle all ongoing lawsuits, putting an end to the legal battle that's seen the two tech giants sue one another for two years.
The pair headed into court for the first day of this long-awaited legal battle on Tuesday. The two had been locked in a legal war for the last few years because Qualcomm believed it's owed more money from the Apple for producing the chips for its iPhones and iPads.
The firms have been arguing since 2017 when Apple claimed Qualcomm was charging too much for its chips. It said that just because Qualcomm leads the phone processor industry, that doesn't give it the right to charge above and beyond other manufacturers. The case seemed to go back and forth with no end until yesterday when, out of the blue, both agreed on a settlement.
As part of the settlement, Apple will pay an undisclosed fee to Qualcomm and the pair have reached a six-year global patent licensing agreement, which may be extended for another two years. Qualcomm has also agreed to supply parts to Apple for multiple years, which potentially means it's going to supply modems for the iPhone once again.
So, essentially, two years of bitter legal battles have resulted in a return to 'business as usual' for the two tech giants - for the next six or more years. For Geoff Blaber, VP of research at CCS Insight, Apple didn't have much choice but to settle.
"The multi-year deal is a huge vindication of the Qualcomm business model and suggests that Apple had run out of options for 5G modems," he said. "There was a growing body of evidence that Intel, its current chipset provider, was struggling to deliver a 5G solution in a timely manner.
"With the market for 5G accelerating, the need to guarantee a 5G iPhone in 2020 clearly proved a powerful motivator for a settlement. Commercial pragmatism ultimately won. Every major transition in mobile technology has its winners and losers, Apple simply couldn't afford to risk its business over a long term licensing dispute"
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