situation report

Apr 17, 2019 | 12:53 GMT

1 min read

U.S.: Qualcomm, Apple Settle Legal Dispute

What Happened: Qualcomm and Apple have settled all of their worldwide disputes, the pair announced April 16, noting that Apple had agreed to a six-year supply deal to buy additional chips from Qualcomm, including its 5G modems. The statement led Intel to declare that it would exit the 5G modem business for smartphones, although it said it would complete an assessment for 5G modems beyond smartphones.

Why It Matters: Apple would have suffered a major setback in developing 5G-capable smartphones had it failed to reach a deal with Qualcomm, as the latter is the only feasible 5G modem supplier for Apple.

Background: Qualcomm's business model has come under increased scrutiny in recent years as it forces the buyers of its chips into licensing agreements for patents to receive royalties. Although the agreement settles the complex legal disputes between Qualcomm and Apple, the former still faces significant challenges from global regulators, including the U.S. Federal Trade Commission.

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