Apple And Qualcomm End Global Court Battle And Are Best Buds Again

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Effective immediately, all litigation between the two companies has been dropped, and the two have signed new patent license and chip supply agreements. It also included a multiyear agreement for Qualcomm to supply chips to Apple.

Later Qualcomm hit back with its own lawsuit, alleging that Apple used its heft in the electronics business to wrongly order contract factories such as Hon Hai Precision Co Ltd's Foxconn to withhold royalty payments from Qualcomm that Apple had historically reimbursed to the factories.

The news came as a San Diego court heard arguments in a case involving the two companies' patent dispute. It was expected that the trial would last until May, but here we are. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share. While Apple claims some of Qualcomm's patents aren't valid, Qualcomm accuses Apple of violating them - and has sought to ban iPhone sales or imports in several countries, including the US. As a result, Apple's attorney might be able to convince a jury that Qualcomm is not entitled to royalties based on the price of a complete smartphone.

Now that the dust has settled, Apple can start testing a 5G-enabled iPhone with Qualcomm's latest and faster modems.

Apple licensed Qualcomm's technology for the iPhone early on, helping the phone maker break into the wireless industry.

Soon after the announcement, Intel said it would be exiting the 5G smartphone business.

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It was rumoured that Apple's 2020 iPhones would also feature modems made by Intel, but recent reports claimed that Apple had "lost confidence" in the chipmaker, which had been missing deadlines for the development of its XMM 8160 5G modem.

"Intel has had enough of losing money on cell phone modems and is instead shifting its focus to integrating them into PCs and other data-centric devices", wrote analyst Richard Windsor. The Federal Trade Commission sued Qualcomm in January 2017 as well, and over the same complicated reason.

Ben Wood, chief of research at CCS Insight said the settlement was "a huge vindication for Qualcomm".

If you're interested, you can read the press releases from Apple and Qualcomm in full. Two of Apple's biggest rivals, Samsung and Huawei, are already getting ready to introduce 5G models.

Comment The dramatic peace treaty between Apple and Qualcomm is good news for iPhone buyers, but raises questions about the market's ability to produce a viable competitor to the 5G leader - at least in the short term. MediaTek was regarded not up to the mark, Intel reportedly was running behind deadline.

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