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Qualcomm and Apple agree to drop all litigation
- epberry 8y agoWow. I suppose Qualcomm will be the 5G modem supplier then? Stunning turn of events. I thought the relationship was broken beyond repair. Great for consumers though. I've been frustrated with the Intel modem on my phone.
- codercotton 8y agoEspecially considering Apple's hiring of baseband chip engineers...
- tpush 8y agoThey might still develop their own baseband eventually, intermittently using Qualcomm to get to 5G.
- hinkley 8y agoApple has a lot of other devices besides phones that use cellular networks. I wonder if you just care about data and not voice, how much of this quagmire you can avoid? Ipads, watches, maybe Airs with data only chips, that'd be a lot of chips.
- rythie 8y agoThey've got 6 years to work it out.
- chollida1 8y agoNotes: - Apple pays Qualcomm a one time payment, no word on the size - Qualcomm is up almost 18% while apple is flat which tells you who this affected more - ends all ongoing litigation - 6 year license and global patent license agreement that can be extended NOTE global license here is important as there was talk of just a US based agreement before - new chipset supply agreement so don't look for Apple designed chipsets just yet - Qualcomm might be finally done with litigation. China fined it $975M and Korea hit it with an $865M fine. Though to be fair, both countries are hardly neutral in this and its very reasonable to see these fines as a form of tariffs to help their own domestic companies - wasn't a court ordered agreement which means both sides came together to make this and it wasn't forced on them by the courts. - Qualcomm reported incremental EPS of $2 on its website, that's a fair bit so this is probably a win for Qualcomm in the short term, note this doesn't mean its bad for apple. - bring on the 5G iPhones now, perhaps this makes Samsung the biggest loser out of this as apple is now ready for the nextgen cell service and Qualcomm is no longer negotiation from a position of weakness - QCOM's licensing model lives on, good for them, makes them a big takeout target now, could see $100 QCOM in that case, its at $70 now and was $57 at the start of the day.
- GameOfTrolls 7y ago>QCOM's licensing model lives on, good for them No. Fuck that patent troll.
- oflannabhra 8y agoI'm guessing the one time payment might be of large enough size that analysts could figure it out based on quarterly statements, but I'm curious what the patent royalty agreement looks like. For Apple, I'm sure they'll still a) work on designing their own modems and b) source modems from Intel.
- danaris 8y ago> and b) source modems from Intel. Well, they can't do that anymore, given Intel's announcement that they won't be making them.
- duxup 8y agoWould they pay it / qualcomm account for it in a single quarter?
- Despegar 8y agoThe one time payment is likely just what they've been withholding for the past few years during litigation plus interest.
- function_seven 8y agoSorry if this is a naive question: Any chance we'll ever know how much Apple paid Qualcomm? How open are the books of each company? Can a public company settle a suit without revealing the terms?
- newusertoday 8y agoEPS increase of $2 https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec6-87e2-7af6f6936e2c https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec...
- function_seven 8y agoThanks! That's useful. Although I assume it aggregates the settlement payment and some other payments associated with the new agreement. (Although, I guess you could call the whole package the settlement?) I guess I'm just looking for the amount of money Apple agreed to pay—beyond the value of services/chips they will receive—in order to settle this lawsuit. If the accounting can be done that way.
- RantyDave 8y agoIt doesn't say if that's quarterly or annual EPS. But, given that there are 1.2Bn Qualcomm shares it would maybe indicate the "one time payment" is in the 2.5Bn ballpark?
- btian 8y agoThey will reveal to their respective board. Public shareholders will never know anything.
- mrkstu 8y agoSelf-interest mandated this resolution. Both companies were risking more than they stood to gain by winning their various suits. Who nominally 'won' will depend on whether Apple is paying what it considers reasonable royalties going forward and whether the patent agreements allow it to utilize Qualcomm's IP in their own chipsets. If Qualcomm has given up on tying patents to chips then it has effectively lost. If they can maintain that position with everyone but Apple, they'll probably be OK with the outcome. Apple was forced to the table by its partner (Intel) being unable to supply 5G in a timely manner, so it may very well had to give up more than it otherwise would have.
- Despegar 8y ago>If Qualcomm has given up on tying patents to chips then it has effectively lost. If they can maintain that position with everyone but Apple, they'll probably be OK with the outcome. Apple now has a direct license with Qualcomm. The arrangement before that was only the contract manufacturers had a license with them. It seems very likely that the patents and chips got unbundled (at least for Apple). The FTC case still seems like the main risk to their business model.
- wyldfire 8y agoSince Apple was the major leverage for this case, I'd speculate that Apple could apply that same leverage to get the US FTC to settle.
- RantyDave 8y ago
- mrlambchop 8y agoOn the surface, this looks more positive to QCOM. However, I feel a good long term play for APPL would be to negotiate a cap on royalties for all LTE shipments through litigation like this, then fade in their own silicon in some developing markets whilst keeping their eye on 5G deployments using modems from the best vendor(s). My 2 cents.
- teddyh 8y agoYou know what really annoys me? It’s people who call companies by only their stock symbol. Why does this annoy me? It is as if stock symbols were the normal company identifiers (as opposed to, say the names of the companies) for all the readers who the writer cared about. Which means that the person who wrote it is, in essence, saying “If you don’t invest in stocks, I don’t care if you understand me or not, since then you don’t matter.” EDIT: If all you want to do is clarify what the stock symbols are, you first had better check that you’re using the correct symbols, and then all you’d have to do is write “Apple (AAPL)”. This is clear, precise, and does not exclude anyone needlessly. Therefore, I can only conclude that people who don’t do this clearly want be excluding.
- TylerE 8y agoTo stock traders, they don't. Complaining about stock symbols in an economics article is like complaining that a chemistry paper used "h202" instead of spelling out "hydrogen peroxide", or for that matter than any tech article explain what http is.
- teddyh 8y agoAbbreviations are one thing (they make things shorter), precise technical terminology another (they make things exact), but writing “APPL” instead of “Apple” is simply signaling. EDIT: Especially since, as axaxs pointed out in another comment, APPL is apparently the wrong symbol for Apple. This strongly indicates that “APPL” is not used because it’s important to use the correct symbol, it’s there to signal that “I trade in stocks, and if you don’t, then I don’t care about you.”
- mythz 8y agoQCOM ended the day up 23.21% whilst AAPL was essentially flat for the day, high of USD $201.35 closing at $199.25 so normal trading variance. It appears that QCOM got the better end of this deal. Does anyone know of the $2 EPS [1] is due to the one-time payment or an annual EPS from the ongoing patent royalties? [1] https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec6-87e2-7af6f6936e2c https://investor.qualcomm.com/static-files/3cb803e8-fc20-4ec...
- terryschiavo22 8y agoWhy would we use the market as a barometer for who won the deal? The market doesn't have a great track record for being right.
- mythz 8y agoWell I'm assuming with a 26% increase in Market Cap (inc. after hours) represents 22B increase in market cap, but the $2 EPS represents ~2.4B so I'd expect a lot of the 82% institution investors knows something that's not contained in these announcements. It's a pretty big gamble to pay such a high premium and growing (up 3% after hours) unless your confident the settlement greatly benefited QCOM.
- bunnycorn 8y agoThe market is stupid. They have valuated Apple under Amazon, now Apple is over Amazon and Microsoft. How stupid is that?
- mythz 8y agoWhy is it stupid? Apple made 8x more profit than Amazon and 2.4x more profit than Microsoft. It deserves to be worth more and still has the lowest P/E ratio of all major tech companies (5.7x lower than AMZN). If you think something is undervalued, buy it.
- bunnycorn 8y agoIt's stupid because the market valuated AAPL at about $150 three months ago, and now is about $150. That stupid. BTW, I say the market is stupid because I bought AAPL shares January 28th (a monday), and I've bet the market ever since, I've beat SP500, DOW, I've won AMZN, MSFT, GOOG, everything. I even won Warren Buffet. And I'm selling now, because the market is also predictable. I have no words for it, they do as they are told by the news. I do the contrary, this is a warning sign for me, I might miss 10%-20%, but it doesn't matter, 30% is good enough and not worth the risk.
- leesalminen 8y agoI sure hope Apple puts Qualcomm modems back into iPhone. The Intel ones are inferior in nearly every way. I live in a poor reception area. With an iPhone + Intel modem, iOS reports 0 signal. With an iPhone + Qualcomm modem, I do get enough of a signal to make calls and receive SMS. Unfortunately, WiFi calling on iOS has also gone downhill in recent years (ATT & VZW). It seems as though I have to have a bar or 2 of a signal for WiFi calling to work. If I have no cell signal, WiFi calling connects/disconnects every few minutes, even if I'm in the middle of a call.
- sigzero 8y agoI totally agree. This is good news.
- bowmessage 8y agoNot saying I disagree with you but, anecdata: n=1
- leesalminen 8y agoOf course ;). Although I’ve spent hours Googling/Redditing this topic and it’s indeed an opinion held by n>1. Not to mention the 40 or so neighbors that I’ve chatted about this with over the years. I’d really, really like to have the latest hardware iPhone that handles cellular services in poor signal conditions. I don’t have a skin in the game as to Intel vs Qualcomm. I just want it to work well.
- quickthrower2 8y agoYeah could be the antenna or something else that is making the difference.
- codegeek 8y agoI always wonder how much do the lawyers make whenever litigations like this are on-going. Easily a few millions ?
- ppeetteerr 8y agoI suspect the lawyers are on payroll
- meddlepal 8y agoSome are for sure, but this kind of stuff often requires specialization which may not be in house. Also often you want a second opinion from outside legal counsel.
- saagarjha 8y agoI’m sure both Apple and Qualcomm have large legal teams experienced in this kind of litigation.
- bluGill 8y agoI'm sure those teams often ask for outside help. I know the corporate lawyers I've talked to (mandatory legal training...) have told me about sitting in a trial watching as the outside lawyers he hired for the case did the actual arguments in court.
- cgy1 8y agoBoth sides employ outside counsel. They're large multinational law firms that charge a high hourly rate (high 3-figures to 4-figures depending on the seniority of the attorneys).
- FireBeyond 8y agoOutside legal also helps remove blinders and bias, somewhat. Yes, you're paying them, but they're also less beholden to "their bosses" as in-house counsel is, and more easily overriden, so it can be a good sanity check as to the merits of a case.
- deleted 8y ago[deleted]
- stevespang 8y agoHe he, Tim Cook blinks first !
- smaili 8y agoDoes this mean the next iPhone iteration will use Qualcomm's modem?
- giovannibajo1 8y ago2020 maybe. 2019 models are surely already fixed on the hardware side
- morpheuskafka 8y agoInterestingly there hasn't been a huge shaekup in share price for companies like Qorvo whose parts are only found in the Intel model, not in the Qualcomm builds.
- donarb 8y agoNote that this is good not only for Apple, but the agreement also stops Qualcomm litigation against Apple's contract manufacturers (Foxconn, Pegatron, Wistron, and Compal). This helps Apple immensely by steadying their supply chain.
- rofaaa 8y agoNow basically make about $6,000-$8,000 a month online. It’s enough to comfortably replace my old jobs income, especially considering I only work about 10-13 hours a week from home. I was amazed how easy it was after I tried it… http://xurl.es/7iatx http://xurl.es/7iatx
- an4rchy 8y agoI'm surprised that this news didn't impact Intel at all, good or bad, since they were also a big part of this whole issue. Does anyone have insight into why that is?
- ineedasername 8y agoIt sounds like Apple had deliberately embarked upon a legal Denial Of Service attack. Qualcom produced documents [0] showing that apple actually had a plan to weaken Qualcom over a 5 years period, a plan that included forcing them into extensive litigation on multiple fronts. I imagine the revelation of such a document played a significant part in driving Qualcom to settle. That, and their own suit which basically said, "Qualcom's licensing, that we agreed to, isn't fair" (yes, I know that drastically over simplifies the issue, but it is the crux of a portion of the dispute) [0] https://www.washingtonpost.com/technology/2019/04/16/apple-qualcomm-face-off-epic-courtroom-drama/?noredirect=on&utm_term=.cc36c11d97c3 https://www.washingtonpost.com/technology/2019/04/16/apple-q...
- dodobirdlord 8y agoI think the more charitable interpretation would be "We have realized that Qualcomm's licensing, that we agreed to, isn't legal." From what I understand Apple's argument has essentially been that they don't need to license the technology from Qualcomm due to having an implicit license via extinguishment at the level of their suppliers. Put that way it becomes "Qualcomm has lied and tried to trick us into paying for something we already had rights to." There's still an outstanding court case to settle this and from what I understand the pretrial judgement is not favorable to Qualcomm.
- kev009 8y agoI will definitely be refreshing my iPhone in 2020 to get back on a Qualcomm modem. In my area the difference was very apparent when I replaced a damaged same generation phone and the radio changed to Intel.
- randomacct3847 8y agoHow much insider trading happened today.
- basetop 8y agoMy god, it's 2019. I can't believe QCOM and APPL were still ligitating this. How many years of lawsuits and counter-lawsuits has it been? I bet their lawyers are some of the happiest people of this decade.
- franch 8y agoCharlie from semiaccurate has been following the story for a while: (2017) https://semiaccurate.com/2017/11/06/qualcomm-opens-apple-legal-filing/ https://semiaccurate.com/2017/11/06/qualcomm-opens-apple-leg... (2019) https://semiaccurate.com/2019/04/16/qualcomm-just-beat-apple-into-sumbission/ https://semiaccurate.com/2019/04/16/qualcomm-just-beat-apple... That's also the reason why Intel is quitting 5G modems
- msravi 8y ago4G/LTE cellular baseband and RF is very hard to get right. Optimizing its power consumption for different scenarios is very very very hard to get right. The 4G graveyard is littered with companies that have tried and failed. TI. Agere. Infineon. Renseas (Nokia). Broadcom. Intel. All these have over time shut down their cellular baseband divisions. They've all released chipsets that work. But none have got the performance-power equation right. Phones built with their modems have all been battery drains that can't get you through the day if 4G is turned on. Qualcomm is the only supplier to consistently get this right.
- hobbes78 7y agoInfineon not exactly... Intel's 5G chips were being developed by the former Infineon Wireless Solutions unit, which was bought by Intel. https://en.wikipedia.org/wiki/Intel_Mobile_Communications https://en.wikipedia.org/wiki/Intel_Mobile_Communications
- wiggler00m 8y agoHow is the market pricing this if the quantum has not been disclosed?
- gigatexal 8y agoWhat a shame. Qualcomm’s business practices are ludicrously bad. But it seems Apple has no alternatives. In 7 years I predict they are making their own modems.
- londons_explore 8y agoSo will 5G make it to September's iPhone? 5 months isn't normally anywhere near enough to integrate a new baseband chip and still get to market...
- sbierwagen 8y agoGiven Intel's recent demo of 6 ghz wifi, September's phone will probably have 4g cell but wifi 6 radios.