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Qualcomm Got $4.5 Billion From Apple Settlement According to Earnings Release
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."
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."
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."
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."
Tags: Qualcomm, Apple vs. Qualcomm
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Top Rated Comments
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8 months ago
More confirmation apple was lying about being overcharged.
No, it's not proof of that at all.
8 months ago
So don't start coming in here saying Apple lost and all that. No one knows the terms.
QCOM -5% after earnings.
No one knows for sure, but everyone can make educated guesses, and most people guess Apple lost, and they are probably right.
8 months ago
So, nothing for AAPL, particularly if they get a long term deal they find favorable.
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.
More confirmation apple was lying about being overcharged.
8 months ago
So, nothing for AAPL, particularly if they get a long term deal they find favorable.
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.
8 months ago
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?
And how much did Apple save in their new terms versus what QCOM wanted over the next 5 years?
Yeah, you don't know.
8 months ago
More confirmation apple was lying about being overcharged.
How did you even remotely come to that conclusion with so little additional information?
https://www.cnet.com/news/apple-plotted-to-hurt-qualcomm-years-before-it-sued-the-company/
Apple allegedly 'plotted' to hurt Qualcomm years before it sued the company
Before Apple ever filed suit against Qualcomm, the iPhone maker allegedly wanted to hurt the company. And it put those plans down in documents obtained by Qualcomm as the two companies prepared to meet in court.
Slides with details of those documents -- viewed by reporters in court, including CNET -- have now been made public. You can see the full slides here (and below).
In September 2014, a document from Apple titled "QCOM - Future scenarios" detailed ways the company could exert pressure on Qualcomm, including by working with Intel on 4G modems for the iPhone. Apple and its manufacturing partners didn't actually file suit against Qualcomm until more than two years later. A second page of that document, titled "QCM - Options and recommendations (2/2)" revealed that Apple considered it "beneficial to wait to provoke a patent fight until after the end of 2016," when its contracts with Qualcomm would expire.
"They were plotting it for two years," Qualcomm attorney Evan Chesler, of the firm Cravath, Swaine & Moore, said during his opening arguments last week. "It was all planned in advance. Every bit of it."
Another Apple internal document from June 2016 said the company wanted to "create leverage by building pressure three ways," according to a slide shown in court. The internal document said, in part, that Apple wanted to "hurt Qualcomm financially" and "put Qualcomm's business model at risk."
Apple had purchased Qualcomm modems for its iPhones for years until the falling out. One 2009 memo said Qualcomm is "widely considered the owner of the strongest patent portfolio for essential and relevant patents for wireless standards."
"Engineering wise, they have been the best," Johny Srouji, Apple's head of semiconductors, said in a March 2015 email.
The earlier memo also noted that while more than half of Qualcomm's patent portfolio was communications and silicon engineering, it "has more significant holdings in other areas, including many areas relevant to Apple." That included media processing, non-cellular communications and hardware. Apple had argued in its lawsuit that Qualcomm's technology was only used in its modem and it shouldn't be forced to pay Qualcomm royalties for innovations it had nothing to do with.
8 months ago
Sounds like UBS analyst Timothy Arcuri was right on the mark when he said Apple paid Qualcomm between $5 billion and $6 billion to settle the litigation. Qualcomm owed Apple $1B so Apple is writing a check for $4.5B.
He also suggested Apple paid between $8 and $9 in patent royalties per device, a huge win for Qualcomm given the growth in LTE Watch and iPad.
He also suggested Apple paid between $8 and $9 in patent royalties per device, a huge win for Qualcomm given the growth in LTE Watch and iPad.
8 months ago
A Billion after Notre Dame fire, 1.2 Billion with Endgame, and now 4.5 Billion for Apple to settle with QC. Funny how that much money is getting tossed around so quickly
8 months ago
And Qualcomm needed the money.
Of course it did. Qualcomm gave apple the products it needed and in return apple broke their agreement and payed nothing. That's called a scam and there's no way to defend apple in this.[ Read All Comments ]
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