Qualcomm and Apple’s “complaints” ended abruptly one hour before the US stock market closed on Tuesday.
On April 16th, around 2:55 pm EST, Apple and Qualcomm decided to resolve the dispute over royalties. A joint statement issued by the two companies said that Qualcomm and Apple have reached an agreement to abandon all legal proceedings worldwide.
Qualcomm said that the settlement with Apple will terminate all ongoing litigation, including litigation with Apple equipment contract manufacturers. The two companies have reached a six-year global patent license agreement, which came into effect on April 1, 2019, with a two-year extension option. Apple will pay Qualcomm a one-time payment, and the two companies have reached a multi-chip chip supply agreement, but the above specific amount is still unknown.
Earlier this week, Apple and Qualcomm lawyers appeared in the federal court in San Diego, California. The case involved $30 billion in royalties. The plaintiff was Apple and four contract manufacturers, and the defendant was Qualcomm. The original market expects that the trial of the case will continue until May, and does not expect the two companies to suddenly announce a settlement agreement. The judge told the jury that the agreement would “allow two technology companies to re-start their business.”
According to information disclosed during the trial, Apple paid $16.1 billion and $7.33 billion in patent license fees for Qualcomm chips between 2010 and 2016. Apple’s lawyers believe that Qualcomm uses “monopoly power” to force customers to pay twice the “unfair price.” Qualcomm believes that Apple is “the biggest bully in Silicon Valley”, forcing chip makers to accept less. Patent royalties, while ignoring the latter’s contribution to smartphones.
The analysis pointed out that reaching a global patent license agreement for at least six years indicates that Apple will again pay GI to the franchise fee. More importantly, the two companies have reached a “multi-year chipset supply agreement,” which indicates that Apple’s future iPhone may re-enable Qualcomm’s modem chip, and Apple may launch 5G mobile phones ahead of schedule. Qualcomm said that with the increase in baseband chip shipments, earnings per share (EPS) is expected to increase by about $2.
Qualcomm’s share price soared from $58.08 before the press release to $71.03, the biggest increase of 24.2% on the day; closed up 23.21% on Tuesday, closing at $70.45, the highest point since October 8, 2018, after the US stock market closed Rose 4%. .
Financial media CNBC observed that Qualcomm’s stock market value increased by $14.5 billion during the stock price surge, exceeding $84 billion, creating the best performance of Qualcomm for one day since 1999.
After the news was released, Apple’s stock price fluctuated and fell several times. The closing price closed slightly higher at close at $199.25, close to the highest point since the beginning of November 2018. Qualcomm’s competitor, Apple’s Intel, later bought baseband chips, and closed higher after rising more than 2%, closing up 0.76%, but then fell.
Driven by Qualcomm’s news, the Philadelphia Semiconductor Index rose more than 3%, setting a new high in intraday and closing prices. Nasdaq broke the psychological barrier of 8,000 for the first time since October 3, 2018. Western Digital rose 4.8%, AMD, Micron and Nvidia rose more than 2%, and Ram Research and Texas Instruments rose more than 1%.
Wall Street’s membership-only article has previously pointed out that since Apple filed a lawsuit against Qualcomm for the first time in January 2017, Qualcomm and Apple have conducted more than 50 projects in six countries and 16 jurisdictions over the past two years. project. Judicial procedure.
Specifically, with the expiration of the patent license agreement signed by Apple and Qualcomm in 2007, Apple began using Intel’s modem chips on some iPhones in 2016, and in 2017 caused contract manufacturers to refuse to pay royalties to Qualcomm. . Qualcomm accused Apple of stealing its intellectual property and handing it over to rival Intel, and has repeatedly applied to cross-border courts to ban certain iPhone imports.
The analysis generally believes that the dispute with Qualcomm will make Apple, like this year’s Nokia, fall behind in the upcoming 5G era.
According to the news in early April, Apple, as the world’s leading mobile phone manufacturer, has yet to find the ideal solution for 5G – the 5G baseband developed independently has not been cracked, the Intel 5G baseband “dropped”, and the purchase of Samsung and Qualcomm “rejected” . Apple is not afraid to miss the first wave of 5G, and will launch 5G phones in 2020. This year, the Android system has released a number of 5G phones.
This week, it was reported that Huawei founder Ren Zhengfei said that Huawei was “open” in an interview.