Apple paid $4.5 billion to settle with Qualcomm

Qualcomm Snapdragon

Apple paid $4.5 to $4.7 billion USD to settle its bitter, years-long legal battle with Qualcomm, according to information shared by the San Diego-based chipmaker on Wednesday as part of its latest quarterly earnings report.

In the business outlook section of the company’s earnings report, Qualcomm notes its Q3 earnings will include “estimated revenues of $4.5 billion to $4.7 billion resulting from the settlement (which will be excluded from our Non-GAAP results), consisting of a payment from Apple and the release of our obligations to pay or refund Apple and the contract manufacturers certain customer-related liabilities.”

When Apple and Qualcomm initially announced that they had settled, the two companies declined to provide specifics related to the financial terms of the deal. Before Wednesday, one analyst estimated Apple had paid up to $6 billion USD to settle. It, therefore, appears Apple came out of the settlement better than expected, a fact reinforced by comments Tim Cook made during Apple’s Q2 earnings call on Wednesday.

Cook said Apple “feels good” about the outcome of its legal battle with Qualcomm.

“We’re glad to put the litigation behind us and all the litigation around the world has been dismissed and settled,” he added.

“We’re very happy to have a multi-year supply agreement, and we’re happy that we have a direct license arrangement with Qualcomm that was important for both companies.”

Qualcomm’s windfall from the settlement is likely to increase; Apple’s deal with Qualcomm includes a six-year licensing agreement and a multi-year chipset supply arrangement. The 2020 iPhones are expected to feature 5G modems from Qualcomm.

Shortly after Apple and Qualcomm announced they had settled, Intel announced it planned to exit the 5G modem market.

Source: Qualcomm Via: Axios, MacRumors

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