Qualcomm today announced its quarterly earnings results and shared details on the amount of revenue that it will be receiving in the coming quarter as part of its recent settlement with Apple.
As pointed out by Axios, Qualcomm will record $4.5 to $4.7 billion in revenue from the Apple settlement, which includes a "cash payment from Apple and the release of related liabilities."
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Apple and Qualcomm announced a settlement in mid-April, dropping all lawsuits and litigation against one another. Apple at the time said the settlement included a payment from Apple to Qualcomm, but both companies declined to provide specific details on just how much Apple paid out in backdated royalties.
An analyst estimate put the number at around $5 billion to $6 billion, but it appears Apple didn't shell out quite that much.
Apple's deal with Qualcomm also includes a direct six year licensing agreement and a multiyear chipset supply agreement, which will see Qualcomm supplying modem chips to Apple for future devices.
Apple appears to have had no alternative but to settle with Qualcomm as it needed 5G modem chips for its 2020 iPhone lineup. Apple originally 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, a decision the company later said was based on Apple and Qualcomm's settlement.
Yesterday, Apple CEO Tim Cook said that Apple "feels good" about the resolution with Qualcomm. "We're glad to put the litigation behind us and all the litigation around the world has been dismissed and settled," said Cook. "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."
Top Rated Comments
More confirmation apple was lying about being overcharged.
No, it's not proof of that at all.
No one knows for sure, but everyone can make educated guesses, and most people guess Apple lost, and they are probably right.So don't start coming in here saying Apple lost and all that. No one knows the terms.
QCOM -5% after earnings.
So, nothing for AAPL, particularly if they get a long term deal they find favorable.
More confirmation apple was lying about being overcharged.Remember kids, the $4.5B is likely just royalty payments Apple stopped making during litigation and they are paying QCOM to make them whole on previously agreed terms. This isn't like a $4.5B bonus for QCOM.
So don't start coming in here saying Apple lost and all that. No one knows the terms.
QCOM -5% after earnings.
Remember kids, the $4.5B is likely just royalty payments Apple stopped making during litigation and they are paying QCOM to make them whole on previously agreed terms. This isn't like a $4.5B bonus for QCOM.
So don't start coming in here saying Apple lost and all that. No one knows the terms.
QCOM -5% after earnings.
It's not a win if QCOM wanted $15/iPhone and Apple stopped royalty payments already agreed from before. How much of the $4.5B was stopped royalty payments they owed anyway?
How can it not be a win? They presumably got their overdue royalty payments, an increase in the royalty rate from $7.50 to between $8 to $9 per device, and another long term commitment. Supposedly wanting $15 and getting ~$8 or so can't be considered losing... especially when they were getting $0 in overdue payments, $0 dollars per device in current and future payments, and no commitment for 5G modems. In no version of this tale did Qualcomm not win. That's not to say Apple lost, because they didn't. But you can't honestly put forth an argument where Qualcomm didn't win.And how much did Apple save in their new terms versus what QCOM wanted over the next 5 years?
Yeah, you don't know.