Apple, Qualcomm End Worldwide Lawsuit War

Apple, Qualcomm End Worldwide Lawsuit War

The settlement comes as a surprise to all as Apple and Qualcomm have gone to all extents to bring each other down in the tech world. While Qualcomm and Apple can now work together, it doesnt mean that it will rely entirely on Qualcomm like the majority of Android smartphone makers do.

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 company's shares, which closed up 23 percent on Tuesday after the announcement, rose as much as 17 percent on Wednesday, hitting their highest in almost two decades. It also announced a multi-year chipset supply agreement. Earlier this year, the company said that Qualcomm refused to sell parts to the iPhone-maker. Fast Company recently reported that Apple was anxious Intel couldn't supply enough modems for the first 5G-capable iPhone. Apple's iPhone suppliers, including Foxconn and Pegatron, wanted another $27 billion from Qualcomm. Under the terms of the agreement, Apple will make an undisclosed payment to Qualcomm.

Intel shares rose about 3 percent on the news in extended trading after closing with a 0.8% gain.

The settlement came a day after a trial in San Diego over the royalties began.

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In January 2017, Apple filed a lawsuit against the chipmaker, accusing itof using illegal patent practices to keep a monopoly on modem chips (which connect phones to mobile data networks). Apple is due to report its quarterly results on April 30 while Qualcomm is scheduled to release its numbers on May 1.

Apple had been seeking billions of dollars over what it claims are exorbitant fees Qualcomm allegedly charged for the use of Qualcomm chips in iPhones, while Qualcomm alleged that Apple breached its licensing agreements to use Qualcomm's intellectual property by refusing to pay billions in fairly charged royalties.

According to ZDNet's sister site CNET, an Intel spokesperson declined to comment on whether the decision behind Intel's exit occurred before the settlement or was in response to the new agreements between Apple and Qualcomm.

Apple is behind rivals such as South Korea's Samsung Electronics Co and Huawei in delivering a phone equipped with fifth-generation (5G) modems that is expected to provide fresh momentum in a slumping global smartphone market. Apple was said to be thinking about developing its own modem-just like it's reportedly working on its own processors-but the company might not be convinced it can do so in the time frame needed to ensure smooth iPhone debuts.

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