A 5G iPhone Is Suddenly A Lot Closer

Qualcomm and Apple Settle Long-Running Patent Royalty Dispute

With a mobile network transition toward 5G technology underway and Intel's 5G modems stumbling, and Qualcomm's 5G Snapdragon family looking good, Apple may have chosen to pay Qualcomm rather than face potential supply chain problems with Intel.

Following this news, Qualcomm saw its stock price rise more than 20% to a total market cap of $85 billion.

Why it matters: Hours after Apple and Qualcomm announced they had agreed to drop their long-running legal disputes, Intel made an equally surprising, and doubtlessly related, statement of its own: the company will no longer be building 5G modems for smartphones. Most people probably expected Apple and Qualcomm to settle, but the timing of the deal was somewhat surprising, considering the trial had just started.

"Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide", an Apple announcement reads. It will also "complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices".

Once Qualcomm stopped paying Apple the $1 billion incentive payment, the latter told its contract manufacturers like Foxconn, Pegatron, Compal and Wistron to stop making royalty payments to Qualcomm; the contract manufacturers usually handle the licensing of parts.

The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones.

Ferrari F1 boss: Charles Leclerc is 'right to be upset'
Bottas refused to be too downhearted by the result, however, and insists that he will be "back" in the running in the next race. Leclerc was promoted to second when the leaders stopped again, and Ferrari may have hoped that he would get to the end.

Qualcomm stock soared as much as 22% following the settlement. Sign up today to get wireless news and updates delivered to your inbox and read on the go.

Qualcomm Inc on Tuesday won a major victory in its wide-ranging legal dispute with Apple Inc as the companies reached a surprise settlement that called for the iPhone to once again use Qualcomm modem chips. Tuesday's settlement is reportedly a global agreement that will resolve all those cases.

In its federal lawsuit in San Diego, Apple alleged that Qualcomm "illegally double dips" by forcing companies to pay for a license to use Qualcomm patents as well as purchasing the technology itself.

This timeframe has increasingly appeared unacceptable to Apple in light of Samsung marketing its Galaxy S10 5G phone, the world's first 5G smartphone, on April 5.

Based on the decision in the FTC suit, Apple was assumed to have the edge in its case.

Brokerage UBS earlier this month said Apple, also battling falling iPhone sales, is increasingly in jeopardy of being unable to ship a 5G iPhone in 2020 which could cause near-term headwind for the company.

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