Apple Paid an Estimated $5-$6 Billion to Settle Qualcomm Dispute, Plus $8-$9 Per iPhone in Royalty Fees

Apple likely paid somewhere around $5 to $6 billion to settle its ongoing legal battle with Qualcomm, according to estimates shared today by UBS analyst Timothy Arcuri (via CNBC).

The $5 to $6 billion payment would have been for royalty fees that Apple had stopped paying over the course of its two year legal fight with Qualcomm.

qualcomm iphones
Qualcomm may also be receiving between $8 and $9 per iPhone from Apple in ongoing patent royalties, a figure calculated based on guidance numbers that Qualcomm provided following the settlement. Qualcomm said that it expects its earnings per share to increase by $2.

Apple previously paid $7.50 in royalties, so at $8 to $9 per ‌iPhone‌, Apple would be shelling out more cash than it did before.

Apple appears to have had no alternative but to settle with Qualcomm, as it had no other way to source 5G chips for its 2020 ‌iPhone‌ lineup. Apple initially planned to use Intel chips, but rumors suggested Intel wasn't meeting development goals, leading to tension between Apple and Intel.

Just hours after Apple and Qualcomm announced a settlement deal, Intel said that it was exiting the 5G smartphone modem business and would not be making 5G smartphone chips at all.

It's not entirely clear if Apple settled with Qualcomm because it knew of Intel's plan to abandon 5G chip development or if Intel made the decision after learning of Apple's settlement plans, but either way, it leaves Apple with no choice but to re-adopt Qualcomm chips for future iPhones.

Smartphone makers like Samsung will have 5G smartphones available starting this year, so Apple could not afford to delay the rollout of its 5G iPhones. Launching in 2020 already puts Apple somewhat behind, but 5G networks from U.S. carriers are still very much in development.

Following news of the settlement, Qualcomm's stock has gone up over 38 percent, marking a big win for the San Diego company. The agreement includes a six-year licensing deal along with a "multiyear chipset supply agreement."

It sounds like Apple will need to rely on Qualcomm for the foreseeable future, but Apple is working on its own modem chip technology, which may eventually allow it to drop Qualcomm as a modem chip supplier.

Popular Stories

New Things Your iPhone Can Do in iOS 18

10 New Things Your iPhone Can Do in iOS 18.2

Thursday October 31, 2024 9:42 am PDT by
Apple is set to release iOS 18.2 in December, bringing the second round of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update brings several major advancements to Apple's AI integration, including completely new image generation tools and a range of Visual Intelligence-based enhancements. There are a handful of new non-AI related feature controls incoming as well. ...
best early black friday deals

The Best Early Black Friday Apple Deals

Friday November 1, 2024 8:21 am PDT by
We're officially in the month of Black Friday, which will take place on Friday, November 29 in 2024. As always, this will be the best time of the year to shop for great deals, including popular Apple products like AirPods, iPad, Apple Watch, and more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment,...
M4 Pro on Blue

M4 Pro Chip Benchmark Results Reveal an Extremely Impressive Performance Feat

Thursday October 31, 2024 7:06 pm PDT by
The first Geekbench 6 benchmark results for the M4 Pro chip surfaced today. Impressively, the results that are available so far show that the highest-end M4 Pro chip is faster than the highest-end M2 Ultra chip in terms of peak multi-core CPU performance. Here is a comparison of the results: Mac mini with M4 Pro (14-core CPU): 22,094 multi-core score (average of 11 results) Mac Studio...
Apple iPhone SE 4 5G Modem 1

iPhone SE 4 First to Get Apple-Designed 5G Modem, iPhone 17 Pro to Add Custom Wi-Fi 7 Chip

Friday November 1, 2024 4:04 am PDT by
The iPhone SE 4 that's set to come out early next year is expected to debut Apple's first in-house 5G modem, according to Jeff Pu, an analyst who covers companies within Apple's supply chain. In a research note this week with Hong Kong-based investment firm Haitong International Securities, Pu said Apple is expected to roll out its custom-made 5G modem starting with the next-generation...
ios 18 2 chatgpt plus

iOS 18.2 Beta 2 Shows Siri ChatGPT Limit, Offers 'Plus' Upgrade Option

Monday November 4, 2024 10:54 am PST by
With the second beta of iOS 18.2 that's available for developers today, Apple has further fleshed out the ChatGPT integration that's available with Siri. In the Settings app, there's now a section that shows the ChatGPT daily limit, and offers an option to upgrade to the paid ChatGPT Plus plan. The beta includes an Advanced Capabilities section with a "Daily Limit" reading that shows up as...
M3 Pro Max vs M4 Pro Max Feature

Here's How Much Faster M4 Pro/Max Are for Graphics vs. M3 Pro/Max

Friday November 1, 2024 8:04 am PDT by
Apple's new M4 Pro and M4 Max chips are impressively fast in terms of CPU performance, topping the M2 Ultra, but what about graphics performance? The first Geekbench 6 results for GPU performance are now available for the M4 Pro and M4 Max, and the Metal scores reveal some impressive year-over-year gains. Based on the Metal scores that are available so far, the M4 Pro and M4 Max are up to...
imac video apple feature

What to Expect From Apple This November

Friday November 1, 2024 9:40 am PDT by
After a busy October in which Apple announced new Macs and Apple Intelligence launched, the calendar has now turned to November. Below, we outline what to expect from Apple this month as the slower-but-still-busy holiday season approaches. After seeding the first betas of iOS 18.2, iPadOS 18.2, and macOS Sequoia 15.2 with additional Apple Intelligence features last month, Apple will likely...

Top Rated Comments

mi7chy Avatar
73 months ago

Apple previously paid $7.50 in royalties, so at $8 to $9 per iPhone, Apple would be shelling out more cash than it did before.
So, it backfired for Apple and they're now worse off for trying to throw another partner under the bus.
Score: 49 Votes (Like | Disagree)
BootsWalking Avatar
73 months ago
In other words, Charlie Demerjian was right:

"Qualcomm just pummeled Apple over patents and technology because, well, it appears the scales tipped in Qualcomm’s favor. SemiAccurate has been saying that Qualcomm would prevail and since we first started covering this suit and Apple’s tactics, and now they have. If you read our last piece on the suits it was pretty obvious that Apple was in the wrong, allegedly caught red handed, and dug the hole deeper with their petty and vindictive reactions. Qualcomm claims to have multiple emails where Apple gave sensitive trade secrets to a competitor, then refused to allow Qualcomm to exercise their contractual audit rights. While there may be some more evidence not presented publicly, it sure looks like Apple was in the wrong. So rather than fixing their alleged wrongs and making Qualcomm whole, they appear to have withheld legitimate royalty payments and launched a barrage of somewhat specious trade and patent related counter-suits along with lowball press sniping."

https://www.semiaccurate.com/2019/04/16/qualcomm-just-beat-apple-into-sumbission/
Score: 39 Votes (Like | Disagree)
realtuner Avatar
73 months ago
So, a completely made up number with no basis in fact whatsoever.
Score: 32 Votes (Like | Disagree)
SoN1NjA Avatar
73 months ago
Definitely seems like Apple won here ― Apple's lawyers should get a raise

it's a ****ing joke
Score: 20 Votes (Like | Disagree)
BvizioN Avatar
73 months ago
I think the years of this “partnership” would be pretty much numbered. Apple is only paying for some more time to develop its own modem.
Score: 18 Votes (Like | Disagree)
Intellectua1 Avatar
73 months ago
Only if you believe liars and their made-up numbers.

There's no way Apple would settle by paying MORE than previously. They initiated this case and they had the upper hand. This analyst just caters to the anti-Apple crowd (and the stock market manipulators/stock shorters) by trying to spin this as a Qualcomm win and Apple loss.
So if these numbers are made up like you say we can expect a write up from you a bit later with the real facts, right? These people crunch these numbers for a living, if the numbers aren't 100% accurate they aren't too far off. I know it hurts but just face it, Apple didn't have the upper hand and Apple knew they would've lost, that's why they settled out. The fact that Apple lied about having talks with Qualcomm says it all. Apple will never admit failure whether it's in faulty products or legal battles because their whole model is we're perfection and we know what's right. If Apple came out on top in this you'd dang well know it.
Score: 17 Votes (Like | Disagree)