Notes:<p>- Apple pays Qualcomm a one time payment, no word on the size<p>- Qualcomm is up almost 18% while apple is flat which tells you who this affected more<p>- ends all ongoing litigation<p>- 6 year license and global patent license agreement that can be extended<p><i></i>NOTE<i></i> global license here is important as there was talk of just a US based agreement before<p>- new chipset supply agreement so don't look for Apple designed chipsets just yet<p>- Qualcomm might be finally done with litigation. China fined it $975M and Korea hit it with an $865M fine. Though to be fair, both countries are hardly neutral in this and its very reasonable to see these fines as a form of tariffs to help their own domestic companies<p>- wasn't a court ordered agreement which means both sides came together to make this and it wasn't forced on them by the courts.<p>- Qualcomm reported incremental EPS of $2 on its website, that's a fair bit so this is probably a win for Qualcomm in the short term, note this doesn't mean its bad for apple.<p>- bring on the 5G iPhones now, perhaps this makes Samsung the biggest loser out of this as apple is now ready for the nextgen cell service and Qualcomm is no longer negotiation from a position of weakness<p>- QCOM's licensing model lives on, good for them, makes them a big takeout target now, could see $100 QCOM in that case, its at $70 now and was $57 at the start of the day.
I sure hope Apple puts Qualcomm modems back into iPhone. The Intel ones are inferior in nearly every way.<p>I live in a poor reception area. With an iPhone + Intel modem, iOS reports 0 signal. With an iPhone + Qualcomm modem, I do get enough of a signal to make calls and receive SMS.<p>Unfortunately, WiFi calling on iOS has also gone downhill in recent years (ATT & VZW). It seems as though I have to have a bar or 2 of a signal for WiFi calling to work. If I have no cell signal, WiFi calling connects/disconnects every few minutes, even if I'm in the middle of a call.
Self-interest mandated this resolution. Both companies were risking more than they stood to gain by winning their various suits.<p>Who nominally 'won' will depend on whether Apple is paying what it considers reasonable royalties going forward and whether the patent agreements allow it to utilize Qualcomm's IP in their own chipsets.<p>If Qualcomm has given up on tying patents to chips then it has effectively lost. If they can maintain that position with everyone but Apple, they'll probably be OK with the outcome.<p>Apple was forced to the table by its partner (Intel) being unable to supply 5G in a timely manner, so it may very well had to give up more than it otherwise would have.
4G/LTE cellular baseband and RF is very hard to get right. Optimizing its power consumption for different scenarios is very very very hard to get right. The 4G graveyard is littered with companies that have tried and failed. TI. Agere. Infineon. Renseas (Nokia). Broadcom. Intel. All these have over time shut down their cellular baseband divisions. They've all released chipsets that work. But none have got the performance-power equation right. Phones built with their modems have all been battery drains that can't get you through the day if 4G is turned on. Qualcomm is the only supplier to consistently get this right.
It sounds like Apple had deliberately embarked upon a legal Denial Of Service attack. Qualcom produced documents [0] showing that apple actually had a plan to weaken Qualcom over a 5 years period, a plan that included forcing them into extensive litigation on multiple fronts.<p>I imagine the revelation of such a document played a significant part in driving Qualcom to settle. That, and their own suit which basically said, "Qualcom's licensing, that we agreed to, isn't <i>fair</i>" (yes, I know that drastically over simplifies the issue, but it is the crux of a portion of the dispute)<p>[0] <a href="https://www.washingtonpost.com/technology/2019/04/16/apple-qualcomm-face-off-epic-courtroom-drama/?noredirect=on&utm_term=.cc36c11d97c3" rel="nofollow">https://www.washingtonpost.com/technology/2019/04/16/apple-q...</a>
On the surface, this looks more positive to QCOM. However, I feel a good long term play for APPL would be to negotiate a cap on royalties for all LTE shipments through litigation like this, then fade in their own silicon in some developing markets whilst keeping their eye on 5G deployments using modems from the best vendor(s).<p>My 2 cents.
I will definitely be refreshing my iPhone in 2020 to get back on a Qualcomm modem. In my area the difference was very apparent when I replaced a damaged same generation phone and the radio changed to Intel.
Note that this is good not only for Apple, but the agreement also stops Qualcomm litigation against Apple's contract manufacturers (Foxconn, Pegatron, Wistron, and Compal). This helps Apple immensely by steadying their supply chain.
Wow. I suppose Qualcomm will be the 5G modem supplier then? Stunning turn of events. I thought the relationship was broken beyond repair. Great for consumers though. I've been frustrated with the Intel modem on my phone.
Charlie from semiaccurate has been following the story for a while:<p>(2017) <a href="https://semiaccurate.com/2017/11/06/qualcomm-opens-apple-legal-filing/" rel="nofollow">https://semiaccurate.com/2017/11/06/qualcomm-opens-apple-leg...</a><p>(2019) <a href="https://semiaccurate.com/2019/04/16/qualcomm-just-beat-apple-into-sumbission/" rel="nofollow">https://semiaccurate.com/2019/04/16/qualcomm-just-beat-apple...</a><p>That's also the reason why Intel is quitting 5G modems
What a shame. Qualcomm’s business practices are ludicrously bad. But it seems Apple has no alternatives. In 7 years I predict they are making their own modems.
I'm surprised that this news didn't impact Intel at all, good or bad, since they were also a big part of this whole issue.<p>Does anyone have insight into why that is?
My god, it's 2019. I can't believe QCOM and APPL were still ligitating this. How many years of lawsuits and counter-lawsuits has it been? I bet their lawyers are some of the happiest people of this decade.
QCOM ended the day up 23.21% whilst AAPL was essentially flat for the day, high of USD $201.35 closing at $199.25 so normal trading variance.<p>It appears that QCOM got the better end of this deal.<p>Does anyone know of the $2 EPS [1] is due to the one-time payment or an annual EPS from the ongoing patent royalties?<p>[1] <a href="https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec6-87e2-7af6f6936e2c" rel="nofollow">https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec...</a>
Interestingly there hasn't been a huge shaekup in share price for companies like Qorvo whose parts are only found in the Intel model, not in the Qualcomm builds.
So will 5G make it to September's iPhone?<p>5 months isn't normally anywhere near enough to integrate a new baseband chip and still get to market...
Sorry if this is a naive question: Any chance we'll ever know how much Apple paid Qualcomm? How open are the books of each company? <i>Can</i> a public company settle a suit without revealing the terms?