Monday, 17 June, 2019

Intel Drops Out Of 5G Race Following Apple, Qualcomm Partnership

Apple and Qualcomm Settle Sweeping Patent Suits - Qualcomm and Apple Settle Long-Running Patent Royalty Dispute
Cecil Davis | 17 April, 2019, 16:12

New iPhone models released by Apple in 2018 used Intel modem chips instead of Qualcomm chips.

The news sent Qualcomm's stock price soaring more than 23 percent on Wall Street, its best one-day performance in almost 20 years.

A SHOCK SETTLEMENT between Apple and Qualcomm has forced Intel to exit the 5G modem market. Following initial lawsuits, Apple had to rely exclusively on Intel to provide LTE modems for iPhones, thus eliminating its reliance on Qualcomm, until now, it seems.

Apple and American microchip manufacturer Qualcomm said Tuesday they have agreed to "dismiss all litigation" against each other worldwide in what had been a sprawling battle over royalty payments.

Chipmaker Intel has announced today that it will be cancelling production of it's 5G modems. Qualcomm countered that Apple reneged on its contracts.

Huawei stopped royalty payments in April 2017 and Qualcomm said in January it has signed an interim agreement with the Chinese company and is in talks for a final resolution.

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The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones.

Investors sensed a resounding victory for mobile chip maker Qualcomm, bidding up its stock price 23% within minutes of news of the settlement. Seems nothing odd with this, but Apple is now embroiled in a massive legal battle with Qualcomm, while Samsung is remaining the closest rival of it.

This comes just one day into their latest dust up: a $30bn lawsuit brought against Qualy by Apple and its pals in San Jose, USA, a trial that just evaporated as a result of today's peace pact. And if a maker does use a Qualcomm chip, it not only has to pay for the chip but also royalties that come along with it.

Shares of Intel were up 2.7 percent at $58.25 in after hours trade.

These comments have now been undermined by rotating chairman Ken Hu, who told the company's annual global analyst summit in Shenzhen that it had no plans to enter the handset chipset market and looked forward to competing with Apple in 5G smartphones. "A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court".

Qualcomm has always been a dominant player in the wireless chip business for smartphones. Either Qualcomm had evidence so strong that Apple didn't think it would win the case, or Apple needed something only Qualcomm could provide.