Apple, Qualcomm reach agreement in royalty dispute

BEIJING: Tech giant Apple Inc has reached an agreement with US chip major Qualcomm Inc to end their two-year legal battle over technology licensing fees, as the smartphone vendor steps up its efforts for the forthcoming 5G era.

The move signifies that Apple is prioritising the need for a stable supplier of 5G modem chips over business disputes, and the global 5G smartphone battle is finally on, putting more pressure on Chinese companies, experts said.

Apple said in a statement that the two companies had inked an agreement to dismiss all litigation between them worldwide. The settlement includes an undisclosed payment from Apple to Qualcomm.

Apple and Qualcomm have also inked a six-year licensing agreement, effective April 1, 2019, including a two-year extension option, and a multi-year chipset supply agreement.

The agreements mean that Apple’s newest iPhone models, especially upcoming 5G models, will use Qualcomm’s modem chips.

The iPhone used to rely entirely on Qualcomm’s chips, but from 2016 Apple started using Intel Corp’s modem chips in some models. When it comes to 5G modems, however, Intel failed to provide qualified products for iPhones, so Apple had no other choice but to put disputes aside and get Qualcomm as its supplier again, said Fu Liang, an independent analyst who has been following the telecom industry for more than a decade.

Shares in Qualcomm surged 23% after the announcement, while Apple’s remained flat on Tuesday.

Xiang Ligang, director-general of the Information Consumption Alliance, said the move signifies that Apple is now ratcheting up resources into the research and development of 5G smartphones, as its rival Huawei Technologies Co and Samsung Electronics Co have already showcased their 5G models.

This article originally appeared on the China Economic Net 

Published in The Express Tribune, April 19^th, 2019.

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