Qualcomm and Apple Settle Billion-Dollar Lawsuits

Qualcomm witnessed a whopping 23% rise in their stock after it settled its multi-billion-dollar lawsuits with Apple. When the market was closed, Qualcomm’s stock price was set at $70.45 which started at $57.46. Qualcomm is known for making wireless telecommunications products and services. Interestingly, Qualcomm’s Snapdragon processors power almost all of Apple’s rivals.

The Battle

The lawsuit commenced in January 2017. Apple and Qualcomm had spent these two years in the court over legal scrimmage over patent infringements, IP theft, and royalty payments. As stated by Apple, Qualcomm charged unreasonable fees for some essential patents. It also alleged that Qualcomm was using their “dominant position” of smartphone modem supplier to demand exponentially high costs.

Qualcomm’s wins

This isn’t the first time Qualcomm was pulled in a lawsuit. In the US, it is yet to witness the final result of the case filed by the Federal Trade Commission, which sued the Californian firm for some licensing issues and for having monopolistic behavior. While Qualcomm seemed trapped, it had successfully created pressure on Apple, when it fortuitously got to ban iPhones in China and Germany for patent violations. Qualcomm also won a lawsuit which put a lot higher prices on just a smaller number of Apple’s patents. It also accused Apple of stealing their technology.

The Settlement

Qualcomm was winning lawsuits globally which might have prompted Apple to reach a settlement to avoid further loss. According to the details given to the press about the settlement, a payment has been made by Apple to Qualcomm and these two firms are locked in for a six-year licensing agreement (with the option to extend by up to two years), and a “multiyear” chipset supply agreement.

The legal war has now ended but if either had won the lawsuit, the win could have reshaped modem pricing, from the winner’s perspective. While we believe if Apple had won, it could have lowered the prices for itself and build alternatives of Qualcomm. If Qualcomm would have won, it could have increased the overall cost.

Even though Qualcomm’s share rose 23%, Apple’s stock wasn’t affected.


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