Apple alleged that Qualcomm engaged in illegal monopolistic patent licensing practices for its premium cellular modem chips for smartphones.
Apple and Qualcomm have reached a six-year license agreement starting from 1st April 2019 and effective at least until April 2025. The Federal Trade Commission has accused the company of using its royalty system to stifle competition in the mobile chip market in another case in which Apple played a central role. Qualcomm contended that Apple owed it money for royalty payments related to its technology while Apple said the company was trying to try an unfair rate for essential technology.
A jury of six men and three women was in the process of hearing opening arguments from Apple's and Qualcomm's lawyers, at a federal court in San Diego, when news of the settlement broke. It was expected that the trial would last until May, but here we are.
Following Tuesday's announcement, Qualcomm stock jumped 23 percent, closing at $70.45.
Apple has paid a settlement to Qualcomm, and the two companies have inked a deal to work together again.
Apple had tried to bypass Qualcomm by using modems from Intel in its iPhones and iPads.
The row between the pair began in 2017 when Apple first filed a legal complaint. The company will also continue to invest in its 5G network infrastructure business.
Now that Apple has settled with Qualcomm, however, it doesn't have to worry about its 5G future. Apple's new agreement with Qualcomm accelerates the move off of Intel, and takes the pressure off of Apple's internal modem development group.
Fast Company reported earlier this month that "in order to deliver big numbers of those modems in time for a September 2020 iPhone launch, Intel needs to deliver sample parts to Apple by early summer of this year, and then deliver a finished modem design in early 2020".
Several hours after the deal was announced, Intel said it was withdrawing from the 5G smartphone modem business, without indicating whether its decision was a cause or effect of the agreement its rival signed with Apple. With the Apple-Qualcomm row in full swing, Apple had started using Intel's components instead - but with Qualcomm apparently now back on good terms, that could well change.
Perhaps now that Apple is well on its way to developing and manufacturing its own chipsets, it wont rely on Qualcomm as much as it had in the past. MediaTek was regarded not up to the mark, Intel reportedly was running behind deadline.