Qualcomm Inc stood victorious in its wide-ranging legal battle with the Apple Inc as the companies came to a surprised settlement agreement, on last Tuesday, requiring iPhone maker to once again use Qualcomm modem chips in its phones.
The surprising move not only highlighted Qualcomm winning a major victory but also came on raising the price of its shares by 23 percent to $70.45 in regular trading on the day scoring the biggest gain in roughly last two decades, and that further broke the record by hitting $75.25 mark in after-hour- trading on the day, an overall gain of $30 billion by Qualcomm in market capitalization.
During the Apple’s intensifying legal battles with Qualcomm, Intel Corp remained Apple’s sole supplier for iPhone chips for the past year, but hours after the announcement of Apple-Qualcomm settlement, Intel said it would exit the modem chip business.
The Qualcomm settlement also includes a patent license of six year period and Apple to be paying a settlement amount to Qualcomm, which was not disclosed by either of the company.
With readily available 5G chips to be shipped immediately while Intel’s chips still under development phases, the settlement deal would also help Apple to better as well as early compete with rivals like Samsung Electronics Co Ltd and other manufacturers, which have launched or set to launch device soon that works on faster networks.
Christopher Rolland, an analyst at Susquehanna Financial Group, described the settlement deal as “a big win” for Qualcomm.
The settlement followed two years of cat-and-mouse- play of intense legal battles between the two companies and came as opening arguments that had taken place at a trial in a San Diego federal court.
After the deal Qualcomm could be returning to the top position once it held in the early 2010s by gaining dominance in the network operators transitioning to 4G technology which led the company to dramatically boost revenues.