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Qualcomm shares soar on surprise settlement with Apple of long legal dispute

17 April, 2019, 13:35 | Author: Rafael Roberts
  • Viva Tung  CNET

This means that the pair will stop any further litigation (as far as this particular matter is concerned).

In a joint statement on Tuesday, Apple and Qualcomm announced "an agreement to dismiss all litigation between the two companies worldwide", including claims against Apple's contract manufacturing partners.

Technology giant Apple has settled a wide-ranging legal dispute with chipmaker Qualcomm in an eleventh-hour settlement.

The two firms have also agreed a six-year global patent licensing agreement and also agreed for Qualcomm to supply parts to Apple for multiple years. Qualcomm's stock jumped about 25 percent after news of the settlement. This has been capped at $400 by Qualcomm, but still represents a much higher value than the $20 cost of a Snapdragon modem chip. Without Qualcomm chips, it would likely take Apple significantly longer to bring 5G to future iPhones, putting it behind other smartphone manufacturers. But Qualcomm stopped making this payment after Apple spoke out against it during a hearing held by the South Korea Fair Trade Commission.

Qualcomm had, meanwhile, alleged that Apple was using its technology without paying for it. "I believe both Apple and Qualcomm got deeper into this than they wanted to - Apple was challenging Qualcomm's most profitable business model, licensing, and Qualcomm was accusing Apple of IP theft and lack of payment", said Patrick Moorhead, president and principal analyst at Moor Insights & Strrategy. Jacob Kastrenakes from The Verge comments that had Apple won the battle, it could've secured lower prices for Qualcomm's chips and made it easier for Qualcomm competitors.


The epic legal battle started in January 2017 when Apple sued Qualcomm for almost $1 billion.

Apple and Qualcomm have been fighting in courts for the last few years.

Apple and Qualcomm's current legal clashes, including a blockbuster patent argument with literally billions of dollars on the line that just started its opening arguments, are all officially over. Apple claimed Qualcomm abused its position as the primary supplier of cellular chips and was overcharging for chips, using anti-competitive and monopolistic practices. Apple, on the other hand, saw a small dip before going up by barely 1%.

However, on April 16, 2019, the two companies issued out a press release to announce that they've reached a settlement. Huawei recently offered to provide 5G modem chips to Apple, but rumours indicated that Huawei could face issues because of its not-so-good-history with the U.S. government.

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