Qualcomm and Apple drop lawsuits against each other

Qualcomm and Apple Settle Long-Running Patent Royalty Dispute

News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share.

Apple has settled a lawsuit with Qualcomm, allowing the company to scramble to catch up with its competitors in the race to release 5G phones. It was expected that the trial would last until May, but here we are.

Qualcomm and Apple did not say when their new supply agreement would start.

On the other hand, Qualcomm has talked about the settlement of all litigation against Apple in a blog post.

Qualcomm and Apple today reached an agreement to dismiss all their litigation against each other, worldwide, including with Apple's contract manufacturers. As a result, the face of the cellular modem market is changing in an instant, as Apple's shift in allegiances will have repercussions throughout the industry. Apple accused Qualcomm of charging "excessive royalties" and withholding payments in retaliation for Apple cooperating with a South Korean investigation into the chipmaker.

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. The two companies have drawn up a six-year license agreement with a two-year option to extend this agreement and a multiyear chipset agreement.

Barr to testify before the Senate as Mueller's report looms
Inspector General Michael Horowitz's report about that could be done in May or June, Barr said. "It was started illegally". Barr also dismissed accusations that he was hasty to release the March 24 letter outlining the conclusions of the report.

Neither Apple nor Qualcomm would comment beyond a brief statement announcing they had resolved their differences.

The settlement came just as both companies were beginning a $30 billion federal court trial over just one aspect of the case. Per the public details of the Apple-Qualcomm settlement, the two companies have entered into a six-year licensing agreement and multi-year chipset supply agreement. Apple CEO Tim Cook contradicted him shortly after, saying that Apple hasn't been in settlement discussions since the third calendar quarter of 2018.

Qualcomm Inc. shares rose $4.25 (+6.03%) in after-hours trading Tuesday.

According to reports, Intel is struggling to deliver a 5G modem within a time frame acceptable to Apple.

Qualcomm also held another bargaining chip: It makes the modem chips needed for future smartphones to work with the next generation of high-speed wireless networks known as "5G".

Brokerage UBS earlier this month said Apple, also battling falling iPhone sales, is increasingly in jeopardy of being unable to ship a 5G iPhone in 2020 which could cause near-term headwind for the company. Either Qualcomm had evidence so strong that Apple didn't think it would win the case, or Apple needed something only Qualcomm could provide.

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