Apple settles with Qualcomm over patent royalties, removing obstacle to an early 5G iPhone launch

The two companies made peace quickly.

Credit: DFIC

The epic patent lawsuit between Apple and Qualcomm has turned out to be relatively short-lived. Apple and Qualcomm have announced a surprise settlement agreement earlier today, removing the biggest obstacle to launching a 5G iPhone by 2020.

The US tech behemoths said they would drop all litigation between them worldwide. The settlement includes “a multiyear chipset supply agreement.”

Apple will make a payment to Qualcomm, the sum of which is undisclosed. The companies have also reached a “six-year license agreement” which took effect earlier this month.

The surprise settlement came just two days after Huawei founder Ren Zhengfei said his company would consider selling Apple 5G chips on Monday. “We are open to Apple in this regard,” Ren told a CNBC reporter when asked about the possibility of selling chips to its rival.

Huawei’s “open” attitude to sell its 5G modem might have played a role in the quick settlement, industry insider have told KrAsia.

“Huawei’s open attitude means that Qualcomm would no longer be the only choice for Apple and hence Qualcomm needs to make some concessions and agree to settle with Apple,” said Liu Ruofei, a telecoms analyst at CCID Consulting in Beijing.

Before Huawei’s olive branch, Apple had replaced Qualcomm with Intel as its chief modem supplier for its current iPhones, but Intel’s 5G modems will not ready by 2020, meaning Apple would not be able to launch a 5G iPhone before then. In recent months, Apple has also reportedly sought (and failed) to secure its 5G modem supply from Samsung and MediaTek.

After Apple and Qualcomm reached a settlement, Intel announced its intention to “exit” the 5G mobile modem business. Intel said in a statement that it “does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020.”