Intel says it will exit the 5G phone business as Apple and Qualcomm strike multiyear deal

[The AchieVer]

Intel says it will exit the 5G phone business as Apple and Qualcomm strike multiyear deal

This is likely why Apple and Qualcomm settled

 

Illustration by Alex Castro / The Verge

 

Intel this evening says it has decided to leave the 5G mobile modem market to focus its efforts more on 4G and 5G modems for PCs and smart home devices, as well as its broader 5G infrastructure business. The announcement comes just hours after Apple and Qualcomm struck a surprise settlement in the two companies’ ongoing patent infringement and royalties dispute related to Apple’s use of Qualcomm modems in the iPhone. 

It’s likely Intel’s decision here was what prompted Apple and Qualcomm’s decision to settle — which came as quite a surprise since it happened just as lawyers were presenting opening arguments at the latest courtroom trial that began yesterday in Southern California. But it’s unclear when Intel came to this decision, or when it informed Apple, and Intel declined to comment. Either way, phone

manufacturers like Apple will need to look elsewhere for their 5G radios now, and that means Intel just ceded that business to Qualcomm.

 

“IT HAS BECOME APPARENT THAT THERE IS NO CLEAR PATH TO PROFITABILITY AND POSITIVE RETURNS.”

 

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” Intel CEO Bob Swan said in a statement. “5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

 

Neither Apple nor Qualcomm released statements illuminating why the settlement occurred so abruptly, but Nikkei reported this afternoon that Apple was growing concerned about Intel’s ability to supply next year’s iPhone models with 5G modems. Intel became Apple’s sole supplier of smartphone modems last yearas the dispute with Qualcomm dragged on and became only more complex, involving multiple lawsuits around the globe. 

 

As part of the settlement, Apple will now pay Qualcomm an undisclosed amount related to royalties the chipmaker accused Apple of purposefully withholding as part of the dispute. (Apple, conversely, initially accused Qualcomm of overcharging it for using its technology and components.) The two companies have now entered into a new, six-year global patent licensing agreement that may in the future be extended another two years. 

 

It’s all but certain that Apple will now resume exclusively using Qualcomm modems in the iPhone, including Qualcomm’s 5G components that will likely make their way to Apple’s smartphones next year. The iPhone maker is said to be working on 5G phones slated for release in 2020.

 

 

 

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[The AchieVer]

Apple and Qualcomm End Historic Lawsuit with Surprising Settlement 

Just when everyone thought that nothing can bring Apple and Qualcomm back together, the two companies announced a historic settlement of their global patent dispute.

Apple says both firms agreed to drop all litigation, including with Cupertino’s contract manufacturers. At the same time, the two reached a global patent license agreement and a chipset supply agreement.

“Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement,” Apple announces.

In plain English, here’s how the collaboration between Apple and Qualcomm is going to work from now on.Qualcomm modems on iPhonesFirst, Apple will pay Qualcomm an undisclosed amount for its patents. While no numbers were shared, Apple and its suppliers previously withheld approximately $7 billion in patent royalties, but there’s a chance the sum could be smaller as part of the settlement.

Then, the chipset agreement technically means that Apple will once again use Qualcomm chips on the iPhone. Previously, the company dropped Qualcomm modems and switched to Intel exclusively, so beginning with the 2020 generation, there’s a high the San Diego-based chipmaker returns as the main supplier for the iPhone.

One of the reasons behind this settlement could be Intel’s failure to develop a 5G modem. Without such technology, which Intel promised to launch next year, Apple would be late to the 5G push, and this is already gaining more traction across the world.

Qualcomm, on the other hand, is already a pioneer of 5G modems, so it can help Apple bring a 5G iPhone to the market much faster, possibly as soon as 2020.

For now, the settlement between Apple and Qualcomm appears to be a huge blow to Intel, but on the other hand, can only be good news for the iPhone. Further details are expected to be shared in the coming months as the collaboration between the two companies advances.

 

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Qualcomm Will Make a Great Deal of Money Thanks to the iPhone

 

Apple and Qualcomm have recently settled their patent dispute, with the two also signing a new deal that would most likely bring a 5G iPhone closer to fruition.

 

While no specifics on the agreement were offered, UBS analyst Timothy Arcuri says there’s a high chance Qualcomm will make a great deal of money thanks to this settlement, as he estimates that Apple paid between $5 billion to $6 billion to have all litigation dropped.

And because the collaboration between Apple and Qualcomm will continue, the Cupertino-based tech giant will continue to pay royalties for the tech it uses on the iPhone.

The analyst says that Qualcomm will receive between $8 and $9 per each iPhone in patent royalties, so the San Diego chipmaker would easily make a fortune by simply having its technology used on Apple’s smartphone.Apple and Qualcomm tight-lipped on their dealNeither Apple nor Qualcomm shared any specifics on their agreements in the settlement announcement.

“Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement,” Apple said in a press release.

The collaboration between Apple and Qualcomm is projected to bring us the first iPhone with 5G supportas soon as 2020. Sources familiar with the matter said Apple already requested its staff to start internal testing of Qualcomm’s chips, but analysts said the 2019 iPhone lineup is already in an advanced development stage and adding a 5G version isn’t possible.

Meanwhile, Intel, the company that was originally supposed to build a 5G modem for the iPhone, dropped the development of 5G chips for smartphones, choosing instead to focus on PCs and IoT devices.

 

 

 

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