Published: Wed, April 17, 2019
Electronics | By Kelly Massey

Intel walks away from 5G smartphone modem

Intel walks away from 5G smartphone modem

Prior to the Qualcomm settlement, Intel was Apple's sole modem supplier for the iPhone XS and XR.

Following Tuesday's announcement, Qualcomm stock jumped 23 percent, closing at $70.45.

Qualcomm alleged Apple breached its agreements "for the express objective of inflicting financial harm on Qualcomm and coercing Qualcomm to accept unfair compensation for its IP", according to Qualcomm's trial brief.

The two-year legal fight centered around Apple's purchase of modem chips from Qualcomm.

On the other hand, Qualcomm has talked about the settlement of all litigation against Apple in a blog post. Going forward, Intel could perhaps see strength in other portions of the 5G market - though that will come after it completes "an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices". Recent reports claimed that Apple and its suppliers were seeking almost $30 billion in damages from Qualcomm.

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Later Qualcomm hit back with its own lawsuit, alleging that Apple used its heft in the electronics business to wrongly order contract factories such as Hon Hai Precision Co Ltd's Foxconn to withhold royalty payments from Qualcomm that Apple had historically reimbursed to the factories. In a case filed in January 2017, Apple accused Qualcomm of overcharging for the chips.

The settlement includes a payment from Apple to Qualcomm, but the companies did not disclose the amount. It establishes a six-year global patent license agreement, with a two-year option to extend, and multiyear, renewable chipset supply agreement, which could affect rival semiconductor slinger Intel.

In a surprise move Apple and integrated circuit vendor Qualcomm have announced that they will discontinue all ongoing litigation worldwide, after the start of what looked set to become a long and complex court case over patent licensing.

This timeframe has increasingly appeared unacceptable to Apple in light of Samsung marketing its Galaxy S10 5G phone, the world's first 5G smartphone, on April 5.

Apple licensed Qualcomm's technology for the iPhone early on, helping the phone maker break into the wireless industry. But now that Apple and Qualcomm are once again able to work together, Intel can expect Qualcomm to supply at least some of the 5G chips in the 2020 iPhone-and Apple would have had more leverage to negotiate better pricing. Apple CEO Tim Cook contradicted him shortly after, saying that Apple hasn't been in settlement discussions since the third calendar quarter of 2018.

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