Day one into their trial, and the two surprised everyone by announcing a settlement. Apple, which published a release detailing the development, said it will make a settlement payment to the chipmaker. It also revealed they've signed a six-year license agreement, effective from 1 April 2019. There's an option to extend the agreement for two years, plus a multiyear “chipset supply agreement".
Apple and Qualcomm have been dueling over Qualcomm’s patent licensing practices for the past two years. Apple asserted that Qualcomm was charging high fees, and that it was even charging Apple twice for use of its patents and modem chips. Apple also claimed Qualcomm abused its dominant position to suppress competition, dictate unfair terms, and essentially become a monopoly.
To be clear, it's not just Apple that has an issue with Qualcomm. The chipmaker has been sued over licensing practices and monopolistic behavior by regulators around the globe. It's been fined hundreds of millions of dollars, and in the US, even the FTC took Qualcomm to court. But in terms of the Apple lawsuit, that began in 2017. The two companies entered federal court in San Diego this week.
The jury was set Monday, and Apple finished presenting its opening arguments on Tuesday, when, out of nowhere, a settlement was reached. They amazingly agreed to drop all litigation, ending their tangled legal saga. Apple will also make a settlement payment to Qualcomm, likely relating to the $7 billion that it and suppliers withheld in royalty payments. But exact details aren't yet known.
Perhaps most interestingly, however, is that the two companies can resume business. It seems like Qualcomm's chips will return to the iPhone.
Why does this matter to you?
In a nutshell, we will likely see Qualcomm modems inside the iPhone again - including, potentially, Qualcomm's new 5G modems.
Due to its legal battle with Qualcomm, Apple had switched exclusively to Intel with the 2018 iPhone lineup. However, Intel was reportedly running into issues trying to meet 5G modem deadlines, so Apple was waiting until 2020 to launch a 5G iPhone. Qualcomm, on the other hand, already has its act together with 5G modems. So, with Apple and Qualcomm now on good terms, we can be hopeful that a 5G iPhone will arrive fairly soon.
That said, Apple was working on its own in-house modems. And we're not sure what this settlement and agreement means for that effort.
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