Qualcomm and Apple settle, agree to drop all litigation

Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide.

The settlement includes a payment from Apple to Qualcomm.

The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.

Source: Apple Inc.


MacDailyNews Take: Ta da!

As we wrote back in August 2017:

All along, this has been a dance over royalties, with Apple seeking more amenable terms to Qualcomm’s highway robbery to date. We expect a settlement as well, eventually (once Qualcomm is sufficiently worn down) – a settlement that benefits Apple vs. the old agreement.

Billions at stake as Apple v. Qualcomm trial begins – April 16, 2019
Apple-Qualcomm jury includes woman who’s never owned smartphone – April 16, 2019
Apple, allies seek damages of up to $27 billion in U.S. trial over Qualcomm’s predatory business model – April 15, 2019
Frosty relationship between Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf has deepened dispute – April 13, 2019


    1. “”The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.”

      No MDN, you were not right. Apple paid a settlement to Qualcomm. If Apple doesn’t like what a company charges, they need to go elsewhere. Qualcomm innovates and they can charge what they want.

      1. As I explained to you the other day, dswe, Apple cannot go elsewhere. The protocols that allow any device (no matter who made it or its modem) to connect with the cellular network anywhere in the world incorporate Qualcomm software patents. Without the patented portions of the standard, it simply does not work. The device will be no more than a very expensive paperweight. That is what a “standards-essential patent” is.

        Under both Qualcomm’s agreement when it submitted the patent for inclusion in the standard and under US (and international) commercial law, the owner of a standards-essential patent cannot refuse to license it or “charge what they want,” but must allow use of the patent for no more than a fair, reasonable, and non-discriminatory licensing fee.

        Apple has now negotiated a fee that it has agreed to pay and Qualcomm has accepted as adequate. Those of us who were not privy to the negotiations, and will probably never know the agreed terms, are not in a position to second guess either company.

      2. The payment was, most likely, the royalties which Apple had withheld. The new agreement will be on Apple’s terms I expect, without the percentage of the retail value of the phone.

    2. This sucks! Where’s Steve when we need him, he’d never had settled. He would have drove them into the ground, then danced on their grave.

      And they deserved it too. Apple got their deal, did they stick up for all the other companies that have been robbed by these money grubbers too? Or did they throw them under the bus?

      Let’s see the full agreement

    1. There won’t be a serious need for 5G until we’ll into the next decade, look at the tests from some mags on YouTube, to get any speed they literally had to be standing under the transmitter, and if they went around the corner or into a building, it was pathetically slow..

      Sure it was fast, as long as you’re willing to stand underneath it. This won’t be ready for prime time as I se it for quite a while,,, Why don’t they get LTE better deployed or something..

      1. There is a “serious need for 5G” is in the next generation of smartphones. Not because of the public needs, now, but because Samsung and others will eat Apple’s lunch for a year or more if they don’t have it. Also, Apple will be portrayed in the press as falling hopelessly behind its competition.

        Would YOU want to spend $1,000 or more, now, on a smartphone that doesn’t have 5G?

    1. Actually, it’s probably not too bad. Their stock is up almost 4%.

      The Intel modem was a stinker from the beginning. The development costs were massive and the return was low because of the incumbent competition. There are probably a lot of folks at Intel glad to be rid of this financial sinkhole.

      1. The “Apple pays Qualcomm” was what stood out for me as well. The devil will be in the details but it’s a little difficult to get excited on Apple’s behalf at the moment over the settlement. Did they get a substantial discount on the amounts they were holding back? Will they only be charged reasonable licensing going forward? These are both hugely important. If they settled without gain, that would be hugely bad news for Apple. Everyone seems both willing and able to take advantage of them in the courts these days.

        1. Apple had no problem paying Qualcomm a set (fair) price for various tech.
          What Apple had a problem with was paying a percentage of Apple’s product’s price for Qualcomm chips. In other words, Qualcomm thought they should be paid more for their chips if the price of the iPhone was higher. That idea is completely ridiculous.

          Instead of selling chips, Qualcomm wanted to levy an iPhone tax.

      2. They were always going to pay. That was never in dispute. If the patents are valid, Qualcomm owned them and Apple could not steal them, but had to pay to use them. The only question was “how much?” It took the pressure of a trial and the lawyers’ feel for how the jury was reacting to opening arguments before the sides could reach an agreement. Not a shock. In fact, it is exactly what MDN predicted.

        We will never know how much, since the agreement is being sealed to avoid giving competitors valuable information. Since both sides agreed, we can safely assume that the agreed compensation is more than Apple wanted but less than Qualcomm was demanding. So, each company will get a part of the billions that Apple has been holding in escrow and can go buy something.

        This is good news for everybody.

    1. Apple lost because Qualcomm dictated the terms. Qualcomm is in the colloquial “Catbird Seat.” Apple knew this when they started this crap.

      “The catbird seat” is an American English idiomatic phrase used to describe an enviable position, often in terms of having the upper hand or greater advantage in any type of dealing among parties.

      1. How do you know that Qualcomm dictated the terms? Were you in the room? If you look up “agreement” in the dictionary, it suggests that both sides have to agree. If Apple was unhappy with the terms, they were free to continue with the trial. They didn’t because they thought it was in their best interest to settle… as it almost always is. Now all that money comes out of escrow and both sides can focus on their core business, rather than on a lengthy trial and years of appeals.

        The general attitude here towards Apple management reminds me of when Our Lord walked on the Sea of Galilee and the Jerusalem papers reported, “Jesus Can’t Swim.”

    2. Their stock is back to normal levels not up as in All time high 23% jump …

      We need more details to know if apple caved in or actually got a favorable settlement?
      Not possible to tell if there is a clear winner here yet or if it is a win win settlement…

  1. AH ha. See.

    Apple was full of shit. They knew they were going to lose. So they had to bargain with Qualcomm to get the price lowered which they should have done in the first place.

    1. Not sure this is the reason. Apple was probably pretty confident that they could improve their position. However, once it became apparent that the Intel 5G modem schedules were slipping, Apple realized that in order to deliver 5G phones, they needed Qualcomm chips.

  2. Why did I ever believe that Mr cook was on the side of doing the humanly right thing. The opportunity to clarify the abuse Qualcomm has been imposing via their licensing model will continue.
    I suppose from a business point of view Apple has cut the deal that works for them while allowing Qualcomm to continue extorting their fees from all the others.
    Not really the best solution for innovation and competition but that’s corporate business I suppose.

    1. What is your evidence for either of those statements? What is the proof that Apple caved, rather than that Qualcomm did, or that the parties simply compromised? What is your proof that Apple needs Qualcomm more, rather than the reverse, or that there is simply a reciprocal need between sellers and buyers?

      There is no proof. If you guys weren’t blinded by your presupposition that Tim Cook can do no right, you could see there is no proof. All we have is a short bland press release and an agreement with all its details behind a nondisclosure agreement.

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