Qualcomm Could Receive Minimum $4.5 Billion Under the Royalty Settlement with Apple

Qualcomm Could Receive Minimum $4.5 Billion Under the Royalty Settlement with Apple

Business

On Wednesday, Qualcomm said it could get $4.5-$4.7 billion from its elite settlement with Apple. The chipmaker revealed the amount in its Q2 earnings. Thus costs of Apple’s compromise with Qualcomm are much cleaner now. Last month, Apple and Qualcomm ended years-long global court battle. Long-running patent and the antitrust case started after Apple filed a lawsuit against the chip maker for so-called biased patent licensing practices for $1 billion. The battle increased when Qualcomm filed a cross-claim for $7 billion. Qualcomm emerged the apparent winner, achieving a six-year licensing deal along with a chip supply contract.

The chip maker also gained the large one-time payment to settle the lawsuit. It will record the billion-dollar revenue from Apple in its third fiscal quarter, i.e., at the end of June. According to Qualcomm’s Q2 earnings report, Apple paid a big amount to end a legal fight between the two tech giants. The legal battle that spanned across many continents has posed a risk to Apple’s potential to launch a 5G iPhone. As per a report from Bloomberg, Apple had decided to use Intel’s modems. The phone maker has used Intel’s equipment in the meantime due to its battle with Qualcomm.

The royalty settlement does not include any future revenues that Apple will pay for using Qualcomm chips in its devices. Regarding Apple, those billion dollars have bought the company a six-year global patent licensing agreement with Qualcomm. It can extend the deal for another two years. Apart from this payment, Qualcomm evaluated that it would receive $4.7-$5.5 billion in the next quarter revenue. After the settlement on April 16, Qualcomm’s stock rose 43%. Even Apple’s stock soared 5% over that extent. All in all, Qualcomm’s Q3 profits should sum up worth $9.2-$10.2 billion. It is a 65% to 83% hop from last year’s value. Steve Mollenkopf, a Qualcomm CEO, said the settlement is a success for both companies. He added they are committed to having a solid partnership with Apple.

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