Intel drops out of 5G market

Viva Tung  CNET

Viva Tung CNET

Apple and Qualcomm agreed Tuesday to dismiss all legal disputes between the two companies worldwide. New iPhone models released by Apple in 2018 used Intel modem chips instead of Qualcomm chips.

A year later, Apple had switched to making its phones with Intel chips and filed a suit against Qualcomm asking for that $1 billion and a lower royalty rate. Qualcomm sued Apple for royalties the company's suppliers were refusing to pay, claiming Apple had interfered with contracts Qualcomm had with companies such as Foxconn.

Apple and Qualcomm have settled a royalty and patent dispute that went to trial this week in San Diego, California.

The surprise truce announced Tuesday came just as the former allies turned antagonists were facing off in a federal court trial that was supposed to unfold over the next month in San Diego.

But only Apple, the biggest company in the world by market capitalisation, felt able to take it head on (yes, BlackBerry won a $814.9m settlement from Qualcomm at arbitration, but that related to rebates Qualcomm had withheld).

Qualcomm's stock, which had underperformed this year, jumped to US$70.45 at the close in NY. "The settlement includes a payment from Apple to Qualcomm".

The Apple-Qualcomm spat has also led to reciprocal patents complaints.

Apple and Qualcomm have signed an agreement to end all of the outstanding legal cases they've brought against each other. Huawei recently offered to provide 5G modem chips to Apple, but rumours indicated that Huawei could face issues because of its not-so-good-history with the USA government. Although Apple and Qualcomm have reconciled, it is estimated that the 5G version of the iPhone will wait until the second half of next year and this means that it will lose a lot of shares. Stating that they aim to focus on PC, "Internet of Things" devices, and data focussed devices, however they intend to make components to help improve 5G infrastructure.

Perhaps now that Apple is well on its way to developing and manufacturing its own chipsets, it wont rely on Qualcomm as much as it had in the past.

It also marks Intel's exit from the 5G smartphone market, on which it already admitted it had been a late starter. At the same time, Apple also started cooperating with regulators in Korea who were looking into Qualcomm's royalty practices.

The comments come a day after Reuters reported, citing sources and documents, that the United States will push allies at a meeting in Prague next month to adopt shared security and policy measures that will make it more hard for Huawei to dominate fifth-generation (5G) telecommunications networks.

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