Qualcomm effectively granted Apple a late-payment discount worth billions of dollars

“After Apple, its contract manufacturers and Qualcomm settled their antitrust and [contract] dispute at the beginning of a trial in San Diego (Southern District of California) two weeks ago, both parties declined to disclose any financial terms,” Florian Mueller writes for FOSS Patents. “Apparently Apple obtained a direct patent license from Qualcomm, and will use 5G modem chips from Qualcomm in some future iPhone models, and it became known that Apple would make a one-time payment to Qualcomm under the new agreement.”

“Despite the parties’ efforts to keep the terms of the deal confidential, the impact on Qualcomm’s financials is more than big enough that the patent licensing and chipset company had to say something in its earnings report for its second fiscal quarter of 2019, which also contains guidance on the third quarter and beyond,” Mueller writes. “So we know now that the one-time payment is in the range from $4.5 billion to $4.7 billion.”

“Instead of interest (or: interest on interest) on top of the $7 billion or more in previously-unpaid patent royalties, Qualcomm apparently had to discount its claim by several billion dollars in order to reach an agreement with Apple. The $4.5 billion to $4.7 billion amount of Apple’s one-time payment is clearly a lot less than the royalties Qualcomm would have received if Apple, through its contract manufacturers, had made payments in accordance with the earlier agreement,” Mueller writes. “What we don’t know, of course, is whether Apple in exchange made some concessions with respect to ongoing royalties.”

Read more in the full article here.

MacDailyNews Take: Meanwhile, Apple’s work on their own 5G modem chipsets continues with a nice cushion of time to get everyone and everything in place, ready to go!

SEE ALSO:
Apple’s 5G modem project lead Ruben Caballero has left the company – April 29, 2019
Apple poached Intel 5G leader weeks before settlement with Qualcomm – April 29, 2019
Apple mulled buying Intel’s 5G business; showing openness to big deals – April 26, 2019
Intel admits Apple-Qualcomm settlement led to it dropping 5G modem – April 26, 2019
Winners and Losers of the Apple-Qualcomm detente – April 19, 2019
Why Intel’s smartphone strategy went off the rails yet again – April 19, 2019
Why did Intel kill off their modem program? – April 18, 2019
Here’s what likely happened between Apple, Qualcomm and Intel – April 17, 2019
Intel axes 5G modem plans after Apple and Qualcomm settle – April 17, 2019
After settlement with Apple, Qualcomm still faces other potential legal fallout – April 16, 2019
Qualcomm and Apple settle, agree to drop all litigation – April 16, 2019

3 Comments

  1. I’m sure Apple found that $4.5-4.7 billion somewhere down the back of the sofa. Apple just needs to bide their time and build their own modem.

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