Qualcomm and Apple finally settle ongoing patent dispute, Intel exits 5G modem business

Qualcomm generic logo
Qualcomm generic logo (Image credit: Harish Jonnalagadda / Android Central)

For what seems like forever at this point, Apple and Qualcomm have been going back and forth at one another over various royalty disputes.

However, on April 16, 2019, the two companies issued out a press release to announce that they've reached a settlement.

Per the release:

Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.

Qualcomm initially filed its first patent infringement back in 2017 arguing that Apple was using patented technology without properly compensating Qualcomm. Apple and Qualcomm have both taken turns delivering blows to one another over the last couple of years, and just this past Monday, trial proceedings had begun in San Diego. It was expected that the trial would last until May, but here we are.

Following this news, Qualcomm saw its stock price rise more than 20% to a total market cap of $85 billion. Apple, on the other hand, saw a small dip before going up by barely 1%.

If you're interested, you can read the press releases from Apple (opens in new tab) and Qualcomm in full.

The immediate casualty of this deal? Intel's 5G modem aspirations.

As a direct result of the licensing deal, Intel has announced its "intention to exit the 5G smartphone modem business" and focus its efforts on infrastructure opportunities. Ahead of Apple and Qualcomm burying the hatchet, Intel acted as a bit of a bargaining chip for Apple by supplying modems for some iPhone models despite generally offering weaker performance than the Qualcomm alternatives. Now that Apple will be standardizing on Qualcomm modems going forward, Intel's hopes of growing (or even maintaining) its mobile modem business were effectively reduced to zero.

The loss of Intel as a pseudo-competitor in some ways plays into Apple's argument that Qualcomm has a monopoly on this technology, but frankly the issues with Intel being unable to compete on a basic technology performance level were bound to be there regardless. Outside of Apple's minimal investment in Intel's modems, the company had little going for it in either LTE or 5G modems for consumer devices. Going forward, Intel could perhaps see strength in other portions of the 5G market — though that will come after it completes "an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices."

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  • Wow I so did not expect to see them settling so fast like this. Congrats to both.
  • What we have here is a clear case of Apple realizing that they picked a fight with Qualcomm that they couldn't win. No amount of spin from Tim Apple will ever be able to explain this in any way that is complimentary to Apple.
  • Actually, given the way that these cases have been going, it was more a case of 'we realize that we're just going to end up trading court victories so we might as well just settle'. Qualcomm has lost some, so has Apple, ditto for winning. There was no clear endgame where one would be 'victorious' over the other. Oh, and Apple was going to have to pay Qualcomm regardless. Even Apple acknowledged that. But they're paying them AND they get access to Qualcomm's modems (probably at a steep discount again).
  • Exactly, whenever folks settle it usually means the parties met in the middle. From what this looks like, Apple got what they wanted, a new deal with better terms and Qualcomm do not have to risk endanger their business model. Something I sure they did not want to do, last thing any corporation would want is having some jurors decides the outcome of their business model. It's what I call a win/win, with Intel as the only loser.
  • The lawyers won and lost all in the same. To be settled means less billable hours.
  • Apple finally bent over back after Intel flops.
  • Do you own an Intel iPhone? Because I do, and the modem performance isn't any different than the Qualcomm iPhone I previously had
  • Because they retard the performance to match.
  • That was just for the speeds not the reliability
  • I ve read from numouors sources and forums that the iPhone X models with the Intel modems were not as reliable to Qualcomms when it came to low signals and would lose /discount
  • I've had both. They are the same.
  • I've had both Intel and Qualcomm iPhones as well and the Intel modem couldn't hold onto a weaker signal to save its own life.
    I have an XS right now and it took 4 firmware updates before it became acceptable in a weak signal area.
    Places where my Note 8 had good reception, my iPhoneXs was 1 bar or No Service. And that is where the Qualcomm modems are superior.
  • Nice to see Apple on the back foot after Intel basically told them they can't meet their 5G modem requirements and aren't willing to take their customary crap. Squirm Apple squirm! Lol.
  • What back foot? Apple is not coming out with a 5G phone for at least another year.
  • And Intel can't produce enough modems for them until at least 2021, if at all. They're clearly on the back foot. They've admitted fault and settled with Qualcomm, that's something Apple do not do. They over played their position and got bitchslapped. It's very amusing.
  • Did you actually read the press release? I am sure you did not. Apple got what they wanted, a new deal with better terms.
  • Agreed. Qualcomm would have lost this case as they were over charging Apple with it's business model and being investigated by the FTC and already fined within the last few yrs for antitrust issues. Yes, Apple paid for the unpaid royalties (probably not the full amount) which they knew they would have to pay something. At the end Qualcomm needs /wants a customer like Apple for it's profits and Apple needs Qualcomm as a supplier for their 5G modems along with a better /fairer deal. At the end it's both a win for them.
  • I did, it's only a paragraph lol. Apple are the ones that fooled, Qualcomm are the ones that got paid. The fact that a few hours later Intel confirmed my above suspicions that they just weren't going to bother reinforces the point. In fact, this looks like something similar to insider trading from my viewpoint... But I'm not a business person. It boils down to this, Apple needs Qualcomm, not the other way round
  • Exactly. If Apple waited for Intel they would have been at least 2 years behind with a 1st Gen modem. They didn't really have a choice. They needed Qualcomm.
  • Sweet. The sooner 5G iPhones enter the market, the fasrer the technology will be deployed and used. Apple will be the real innovators of 5G
  • u are a short of saying. apple invented 5G lol. rubbish
  • They'll be the marketing team for 5G, that's all.
  • Damn I should've bought more Qualcomm shares they stock went up big today thank you apple for the lost 🤑🤑🤑🤑🤑🤑