This is probably the least expected news in the world of high-tech. On Tuesday 16 April, the day after their mega trial opened, tech giants Apple and Qualcomm announced that they have reached an amicable agreement after two years of legal battle, threats and lawsuits.
The saga began when Apple filed a lawsuit in early 2017 against Qualcomm for patent infringement claiming up to $27 billion in damages. Qualcomm in turn accused Apple and its business partners of having stopped paying the royalties owed to it and asked for up to $15 billion in damages.
All’s well that ends well
The two giants have signed a six-year licence agreement, effective from 1 April 2019, with an option of a two-year extension, which will result in the payment of royalties to Qualcomm. They have also signed a multi-year chip supply agreement.
The two companies have decided to throw a big party. What better way to celebrate than a slap-up meal of fried chicken at KFC, the type of fast food franchise that Apple gave as an example of how Qualcomm calculates its royalties.
Party for some, dashed hopes for others
While the reconciliation between Apple and Qualcomm will bring joy to future users of iPhone 5G, Intel quit the 5G modem business just hours after the agreement was reached. After being the only 4G modem provider of the 2017 and 2018 iPhone models that was taking advantage of the conflict between Apple and Qualcomm, Intel has formalised its abandonment of the project that could have equipped the iPhones in 2020.
‘We are very excited about the opportunity in 5G and the “cloudification” of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,’ says Bob Swan, Intel CEO, in a statement.