IT giants reconciled: Apple and Qualcomm found a compromise (Topic)

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IT giants reconciled: Apple and Qualcomm found a compromise


Qualcomm's legal opposition to Apple ended in amicable settlement. The conflict that lasted for a couple of years is settled, the corporations have finished all proceedings. Under the new arrangement and the signed licensing agreement, Apple will start using Qualcomm processors again for at least six years.

Two winners and one loser

According to market indicators for Qualcomm and Apple, the conflict and its further completion proved to be profitable for the first company. Market players estimate Qualcomm's unconditional victory: after all the events, the shares of the manufacturer of mobile chips have risen by almost a quarter, and the company's value has increased by more than $ 14 billion. Apple also grew slightly, its value added 1%.

The third party, Intel, suffered the most after the armistice. Since 2018, the company has been the sole supplier of chips for iPhones and looked forward to further partnerships. After the loss of such a large customer, Intel refused to further develop 5G modems, focusing on network infrastructure and equipment for 5G. At the same time, the manufacturer promises to fulfill its agreements under these contracts by fulfilling orders for the supply of 4G chips. Therefore, there is a good chance that the new 2019 iPhone family will ship with modems from Intel.

How it all began

The quarrel between the two IT giants took place in early 2017. For Apple, Qualcomm's policy of paying licensing agreements for the use of their manufacturing patents seemed unfair and the fees were too high. Apple accused the modem maker of abusing the rights of the monopolist. At the same time, such revenues form the bulk of Qualcomm's budget.

IT giants reconcile: Apple and Qualcomm have found a compromise

Courts initiated by Apple have brought American antitrust regulators into action. As a result, some court decisions hit Qualcomm's pockets, fining the company hundreds of millions of dollars. In response, the chipmaker's legal department also won several meetings, which resulted in a ban on some iPhones in China and Germany due to Apple's patent infringement.

It looks like both sides decided that prolonging the confrontation between Qualcomm and Apple is unprofitable for both corporations. Apple, which still wants to release a 5G iPhone in the future, may not have received a 5G modem from Intel in no time. Qualcomm lost its largest client and royalties.

A compromise agreement between corporations gives good chances that in 2020 the line of new iPhones will be released with support for the 5G standard - a technology that is gaining momentum. Qualcomm, in turn, secured a profit from a large customer and retained the ability to sell licensed patents.

All top global smartphone brands are planning to implement 5G network support in their devices. In this way, the largest manufacturers hope to attract consumers, who change their mobile devices less and less every year. Some companies, including Samsung, already have support for 5G networks, but this technology has not yet become widespread this year due to insufficient infrastructure.

The Topic of Article: IT giants reconciled: Apple and Qualcomm found a compromise.
Author: Jake Pinkman