Apple, Qualcomm Settle All Their Litigations

Qualcomm and Apple have announced that they have dropped all their legal cases and signed a settlement agreement on Monday.

As per the settlement agreement, Apple has also agreed to pay some amount to Qualcomm. However, the payment amount is not revealed - by neither of the companies. Qualcomm expressed that the payment amount would help its earnings per share may increase by $2.

The companies have said that, besides dropping all litigation cases, they also have signed a multi-year contract to continue business with each other. 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.

This means Apple will, once again, buy chipsets from the San Diego-based chipset maker. This development could spell bad news for Intel - that had became Apple's primary chipset supplier since Qualcomm and the Steve Jobs-founded firm entered into the court premises seeking billions in damages from each other back in 2017.

The cases are related to allegations of patent infringement and chipset license agreement violations. The US FTC had also filed a similar case against Qualcomm and the case is still in trial.

FTC Vs Qualcomm : What Is The Case

In January 2017, FTC filed a complaint in federal district court accusing Qualcomm of using anticompetitive tactics to maintain its monopoly in the smartphone semiconductor market.

Qualcomm owns patents for multiple, in fact, most crucial mobile connectivity technologies, in the 3G, 4G and 5G. Mobile phones require these technologies to connect to a telecom network, and the chipset supplier charges a license fee from handset companies to use these technologies. Besides, Qualcomm also provides chips for mobile phone modems.

As per a Qualcomm’s policy, ‘No license no chips’, a mobile phone maker has to pay a license fee even if it does not use Qualcomm’s chips.

Apple did not buy this argument but eventually had to succumb to Qualcomm’s pressure and bought its licenses. The company was even using Qualcomm’s chips for its iPhones till 2013. After a fallout with Qualcomm, Apple is no more using its chips and switched to Intel for its requirements.