Apple, Qualcomm End Worldwide Lawsuit War

Yesterday, Apple and Qualcomm kicked off a massive court case certain to range for years across their respective businesses. Today, they quit.

Apple and Qualcomm have signed an agreement to end all of the outstanding legal cases they’ve brought against each other. Under the terms of the agreement, Apple will make an undisclosed payment to Qualcomm. The two companies have drawn up a six-year license agreement with a two-year option to extend this agreement and a multiyear chipset agreement.

No further information has been provided at this time. Qualcomm stock has exploded upwards on this guidance, rising 20 percent. Up until now, the momentum had seemed to be on Qualcomm’s side of the equation, with Germany banning the sale of some older iPhones and a favorable ruling for Qualcomm in December.

It is possible, of course, that Qualcomm and Apple realized it wasn’t in their own mutual best interest to keep fighting each other. Companies sometimes make these sorts of calls — or simultaneously fight each other in court while collaborating on business matters, as Apple and Samsung have done. But it’s also possible this decision is related to rumors we’ve heard regarding Intel and its 5G modem woes.

According to reports, Intel is struggling to deliver a 5G modem within a time frame acceptable to Apple. We already knew the 5G version of the next iPhone wouldn’t have a 5G modem, which frankly is no loss. The rumor has been that Intel might not have a 5G modem ready for 2020, which would be a significant feature loss compared with its competitors. Apple has famously built its brand around being willing to do what it thought was right rather than kowtowing to market demand, but the company may not be willing to be the only brand not selling a 5G phone at a time when carriers and manufacturers are salivating to provide them.

I want to emphasize, again, that this is supposition and rumor, not fact. But we know that it takes years to put silicon solutions into market and that the details are worked out long before the products ship. We know that there have been rumors of problems between Apple and Intel, as relates to Intel’s 5G modem, specifically. (Intel recently told us that its 5G plans were on track, so no hints on that side of things.)

One of two things seems to have happened here. Either Qualcomm had evidence so strong that Apple didn’t think it would win the case, or Apple needed something only Qualcomm could provide. Right now, the only piece of the puzzle Qualcomm is thought to have a lock on is a 5G modem. As new details break they could cast this news in a different light, but it sure looks modem-related based on what little we know today.

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