Qualcomm and Apple were expected to have a long and drawn out legal battle over the licensing of Qualcomm’s mobile chips. Instead, the companies have come to a resolution with each dropping their lawsuits and agreeing to a multi-year deal, which stands to be an overall win, especially for mobile customers.
Primarily, this could put Apple’s 5G iPhone back on track for a speedy release. Reports indicate the device may be available as early as 2020.
The settlement is retroactively in place as of April 1, with each company agreeing to cease all legal injunctions against the other. Apple has agreed to a one-time payment as well as royalties to Qualcomm for use of its chipsets. The companies have entered into a six-year deal with an option to extend for two additional years.
The quick resolution came as a shock to many following the trial, as Apple’s lawsuit against Qualcomm spans back to January 2017. Qualcomm was accused of charging exorbitant prices for the licensing of its components and patents. In turn, Qualcomm was able to get iPhones using its chips banned in several markets, including China.
Pundits believe the companies wanted to keep details of their businesses out of court, as both Apple’s CEO, Tim Cook and Qualcomm’s CEO, Steve Mollenkopf were slated to testify during the case. Many noted the resolution came before either company had completed their opening statements on the first day of the trial. Overall, the settlement appears to be a Hail Mary on both parts as there was extreme uncertainty as to which company would prevail.
Qualcomm stood to see its entire business model threatened if the case went in Apple’s favor. The company would have potentially had to reconsider the pricing of its components, not only with Apple but with all of its mobile partners.
Apple stood to see a further delay of its next-generation iPhones running 5G if the case went in Qualcomm’s favor. Apple shifted to using Intel chips in more recent iPhones since the lawsuit began and was working with the component maker on a 5G mobile chip. However, issues with the chip’s development could have stalled the release of the first 5G iPhone until 2021. Meanwhile, several of the top Android manufacturers are releasing their first 5G phone models in 2019.
Not long after news of Apple and Qualcomm’s resolution broke, Intel announced it was leaving the mobile 5G business and will focus its efforts on other 5G projects, including modems for PCs and smart home devices, and overall 5G infrastructure.
Though Apple and Qualcomm are in partnership again, Apple is expected to continue its own efforts to develop proprietary 5G chips for its devices. The company has reportedly poached several engineers from Qualcomm and Intel and may debut the technology in 2021. Until then, Apple will use Qualcomm chips for its first foray into 5G, and may still rely on the third-party chips when it comes time to transition to its own components.
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