Left Menu
Development News Edition

Qualcomm shares soar 23 pct after deal with Apple to end all litigation


Qualcomm shares soar 23 pct after deal with Apple to end all litigation
The deal includes a six-year license agreement with the option to extend for two years, and payment to Qualcomm from Apple, the companies said. Image Credit: Flickr

Apple and American microchip manufacturer Qualcomm said Tuesday they have agreed to "dismiss all litigation" against each other worldwide in what had been a sprawling battle over royalty payments. The last-minute settlement cut short a courtroom clash between the tech giants just as it was getting underway in California.

For two years, the companies had fought a multi-front brawl that could have required Qualcomm to pay billions. The news sent Qualcomm's stock price soaring more than 23 per cent on Wall Street, its best one-day performance in nearly 20 years.

The deal includes a six-year license agreement with the option to extend for two years, and payment to Qualcomm from Apple, the companies said. At the heart of the battle were the royalties Qualcomm charges for its patented chips, which enable smartphones to connect to mobile networks.

Apple accused Qualcomm, which holds the most patents for chips, of taking advantage of its dominant position to charge exorbitant amounts for its chips or access to its patents. Qualcomm denied the allegations and accused Apple of abusing its position and of taking legal action to negotiate prices down.

"I believe both Apple and Qualcomm got deeper into this than they wanted to," analyst Patrick Moorhead of Moor Insights & Strategy said in a statement. "This settlement should be good for the wireless industry as companies should feel free to invest in research, get paid a fair price for those inventions, and consumers take advantage of those innovations at a very rapid pace." Several hours after the deal was announced, Intel said it was withdrawing from the 5G smartphone modem business, without indicating whether its decision was a cause or consequence of the agreement its rival signed with Apple.

The stakes had been especially high for Qualcomm, given that it earns a significant chunk of its revenue from royalties paid by manufacturers for its patented technology. Apple had argued that Qualcomm's royalty demands meant it was effectively insisting on payment for innovations by Apple -- such as touch ID or Apple Pay -- that Qualcomm "had nothing to do with." Apple said it had been overcharged by billions as a result and, following its initial US lawsuit, the iPhone maker filed two more suits in China on the same basis. Qualcomm counter-sued.

Also in early 2017, the US Federal Trade Commission sued Qualcomm for alleged antitrust law violations in the sale of certain components and licenses to smartphone makers, including Apple. In April 2017, it was forced to pay $815 million to Canada's Blackberry in a royalties dispute.

And since 2015, through both convictions and settlements, it has paid high antitrust fines in China, South Korea, Taiwan and the European Union. This has led to contradictory legal rulings. In March, a US court ruled in Apple's favour, a few hours after a judge of the same court ordered a partial ban of iPhone imports. Meanwhile, by the end of 2018, Qualcomm had secured a ban on the sale of certain iPhones in China and Germany -- again for patent violations.

(With inputs from agencies.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Handling fake news Infodemic in time of Coronavirus epidemic

Social media has provided a platform where everybody can disseminate his her views without any supervision. Its excellent if the message is genuine but misinformation is equally disastrous. Health is such a topic where every Tom and Harry c...

Sentiment Analysis on Budget 2020: Long shot for solution to economic worries?

Industries and individuals alike had high expectations from the government to take tangible steps but the budget 2020 seems to have failed expectations....

How can technology help the future of mobility?

More than a billion people or one-third of the global rural population lacked access to all-season roads and transport services in 2016, subsequently hindering the socio-economic development....

Videos

Latest News

Farmers' stir in Noida enters 10th day

Scores of young men held a shirtless protest here on Wednesday as part of an ongoing farmers agitation against the Noida Authority. The protest, which began on February 10, is being headed by the Bharatiya Kisan Sangathan BKS. The farmers h...

Initially, we did not take COVID outbreak seriously: Students

Two students from Gujarat, who have returned to India from the coronavirus-hit Chinese cityof Wuhan, on Wednesday said initially they did not take reports about the outbreak seriously.Shreya Jaiman 18 and Vrund Patel 19, both classmates, we...

UPDATE 1-Should Facebook, Google be liable for user posts? asks U.S. Attorney General Barr

U.S. Attorney General William Barr on Wednesday questioned whether Facebook, Google and other major online platforms still need the immunity from legal liability that has prevented them from being sued over material their users post. No lon...

UPDATE 1-Trump offered to pardon Assange if he co-operated over email leak, UK court hears

U.S. President Donald Trump offered to pardon WikiLeaks founder Julian Assange if he said that Russia had nothing to do with WikiLeaks publication of Democratic Party emails in 2016, a London court heard on Wednesday.Assange appeared by vid...

Give Feedback