Apple and Qualcomm legal ceasefire prompts Intel to drop 5G plans

The new settlement between the tech giants kills off Apple and Intel's rumored chip agreement, as Intel announces it will be ceasing development of 5G modems

17Apr

Following a years-long legal battle, Apple and Qualcomm have announced that they have reached "an agreement to dismiss all litigation between the two companies worldwide", meaning that Apple's products will once more feature Qualcomm chips.

The dispute began in 2017 when Apple accused Qualcomm of charging more than it should for technology patents. It then escalated into a full-blown legal battle which analysts predicted would last several years, with Apple asserting that Qualcomm had unfair patent licensing practices, while Qualcomm continued to accuse Apple of patent infringement.

The new settlement, announced on April 17, includes a payment from Apple to Qualcomm and a "multiyear chipset supply agreement" meaning that Qualcomm's modems will once more be used in iPhones. Neither of the companies commented on how much the payment would be.

It will also mark an end to the possibility of iPhone sales bans across a number of countries, after an initial verdict in Qualcomm's favor in German courts could have seen iPhone 7 and 8 models banned from shelves.

The legal ceasefire prompted Qualcomm to enjoy its best day since 1999 after its stock rose more than 20%, sending its market cap skyrocketing from $14.5bn to more than $84bn.

Meanwhile, the agreement has been less positive for Intel who announced that it will no longer build 5G modems for smartphones in a move many are linking to Qualcomm and Apple's settlement.

It was rumored that Apple's 2020 iPhone would utilize Intel's modems. A number of reports, however, revealed that Apple was losing confidence in the chipmaker after a number of deadlines for the development of the XMM 8160 5G modem were missed. While Intel dismissed the rumors, saying it planned "to support customer device launches in 2020 with its XMM 8160 5G multimode modem", the announcement that it will be leaving the 5G race confirmed the reports.

Intel CEO Bob Swan said: "We are very excited about the opportunity in 5G and the 'cloudification' of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns."

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