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Apple, Qualcomm settling royal dispute



Qualcomm expects incremental earnings per share of $ 2 as a product shipping ramp, the company said.

"This was a great victory for Qualcomm as fear of loss in the courts was a big overhang on the name with Apple, afterwards. This IP question completes steam," Wedbush Securities analyst Dan Ives says. "A settlement is a surprise to investors, as Apple realized that this was about two children fighting in the sandbox, and they have bigger problems ahead with 5G and iPhone softness rather than fighting Qualcomm in court. "

The two companies started procedures in a federal trial San Diego court on Monday, which was expected to last until May, both sides asked for billions in damage.The antitrust case was originally filed by Apple in early 201

7.

The complex legal battle centered on modem chips and associated disputes has gone to court around the world over the past two years, including a previous lawsuit between Qualcomm and the US Federal Trade Commission.

For many years, Apple bought modem chips from Qualcomm, but was required under Qualcomm's rates and claims that any company using its chips would also pay license fees for its patents.

Apple claimed that Qualcomm abused its position as one of the only providers of cellular technology, and Qualcomm argued that Apple held detentions that the two companies had hammered out as part of a royalty agreement.

According to Qualcomm, the new license between the two companies is six years, with a two-year opportunity to expand. It includes a one-time payment from Apple to Qualcomm. The payment amount was not disclosed.

In November, Qualcomm's CEO Steve Mollenkopf said he believed the two companies were on the doorstep to settle down. Apple CEO Tim Cook opposed him shortly after Apple failed to make decisions since Q3 2018.

New iPhone models released in 2018 used Intel modem tags instead of Qualcomm's technology.

Analysts had previously said that the dispute between Qualcomm and Apple could reduce Apple's plans to support next-generation 5G networks. Qualcomm is one of the best providers of chips that can connect to 5G networks. The deal opens the possibility for Apple to release a 5G iPhone faster than expected with Qualcomm's modem technology.

Here is the full press release:

Qualcomm and Apple® have today announced an agreement to reject all lawsuits between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies have also reached a six-year license agreement, effective from April 1, 2019, including a two-year extension opportunity, and a multi-year chipset delivery agreement.

WATCH:
How Qualcomm became a chip giant and why the business model is challenged by Apple and the FTC


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