Apple And Qualcomm Reach Surprise Chip Licensing Settlement, Drop All Pending Lawsuits

In what is a somewhat surprising turn of events, Apple and Qualcomm have agreed to settle all ongoing litigation between the two companies. The two have been going back and forth with lawsuits around the globe over patent licensing relating to 4G LTE modems used in Apple's iPhone and iPad products.

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Apple accused Qualcomm of using monopolistic practices to extract exorbitant licensing fees from its customers. Qualcomm countered by saying that Apple infringed on many of its patents, which resulted in successful sales bans both in China and in Germany. However, it appears that all of those past battles are now just water under the bridge.

Apple has agreed to pay an undisclosed payment to Qualcomm, and the two companies have entered into a new six-year licensing agreement (effective date April 1st, 2019). In addition, there is a two-year option to extend the licensing agreement.

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And here's a critical piece of information to the settlement, which could have a big impact on Apple's current primary 4G LTE modem supplier -- Intel. Per the terms of the settlement, Apple and Qualcomm have entered into a multi-year chipset supply agreement, which means that Qualcomm modems will once again be installed in iPhones and iPads. Apple starting using Intel modems with the iPhone 7, and used them as an exclusive supplier with the 2018 iPhone refresh.

Intel is widely viewed as being behind schedule (development wise) and sub-par (performance wise) compared to Qualcomm's 4G LTE modems. Likewise, Qualcomm is already shipping its first-generation 5G modems, while Intel is still in the testing lab. By the time that Intel can actually start delivering its 5G modems, Qualcomm will already be shipping its second-generation Snapdragon X55 5G modem. The chip will support theoretical maximum speeds of 7Gbps download and 3Gbps upload, while supporting 5G NR mmWave and sub-6GHz spectrum bands. With Apple now shacking up again with Qualcomm, that puts Intel's future as an Apple supplier in jeopardy -- especially with regards to 5G modems.

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