This fight forced Apple to use Intel modems for last year's iPhone models - the iPhone Xs, the iPhone Xs Max, and the iPhone Xr. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to almost $70.50 a share.
Yesterday, Apple and Qualcomm kicked off a massive court case certain to range for years across their respective businesses.
Qualcomm and Apple did not say when their new supply agreement would start. The decision allowed Apple to concentrate on making touchscreen computers and helped turn marketing genius Steve Jobs' project into the most valuable company on Earth.
"Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide", an Apple announcement reads.
The not-so-surprising move, which likely explains the sudden settlement between Apple and Qualcomm, will also see Intel "complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices". Apple's iPhone suppliers, including Foxconn and Pegatron, wanted another $27 billion from Qualcomm.
For what seems like forever at this point, Apple and Qualcomm have been going back and forth at one another over various royalty disputes.
Investors sensed a resounding victory for mobile chip maker Qualcomm, bidding up its stock price 23% within minutes of news of the settlement.
The agreement ends a multi-billion dollar legal battle over smartphone technology and will allow Apple to use Qualcomm's advanced chipsets.
The settlement followed two years of increasingly bitter legal battles between the two companies and came as opening arguments took place at a trial in federal court in San Diego.
Qualcomm was seeking $7 billion for unpaid royalties it contended it was owed for its patented technology in the iPhone.
Shares of Intel were up 2.7 percent at $58.25 in after hours trade.
This timeframe has increasingly appeared unacceptable to Apple in light of Samsung marketing its Galaxy S10 5G phone, the world's first 5G smartphone, on April 5.
According to Nikkei, Apple has indeed been concerned that Intel would not be able to meet its 5G schedule, and this is what may have prompted the Qualcomm settlement. The antitrust case was originally filed by Apple in early 2017. Fast Company recently reported that Apple was anxious Intel couldn't supply enough modems for the first 5G-capable iPhone.
Apple released the news via Business Wire today.
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