Apple saved iPhone 5G by settling one of the world's largest patent disputes

Apple and Qualcomm settled one of the largest patent disputes in the world - the amount reached $ 30 billion. After the truce, Apple will pay Qualcomm large compensation and begin to purchase its chips, including for fifth-generation communication networks. Thanks to this news, Qualcomm has risen in price by 20% in a day, and the imminent release of the iPhone 5G has become much more likely.

Armistice terms. The companies agreed that Apple would pay Qualcomm a large sum, and also entered into a six-year licensing agreement and a contract for the supply of chips, according to their joint press release. About what sum there is a speech, does not reveal.

“The agreement came as a surprise to investors. Apple has finally realized that it was like a sandbox fight between kids and that they have bigger 5G-related issues than the Qualcomm litigation,” Dan Eaves, an analyst at Wedbush Securities, told . CNBC

Market reaction. Qualcomm had its best day on the stock exchange since 1999 yesterday, with shares up more than 20%, raising the company's capitalization by $14.5 billion to more than $84 billion. Apple's shares were up less than 1%.

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Question history. The patent dispute between Apple and Qualcomm began in 2017. Apple, which has been purchasing Qualcomm's chips for years and has had to pay royalties to use their patent, has argued that Qualcomm is abusing its position as one of the first manufacturers of cellular equipment. And the chip supplier was talking about Apple's royalty debt. The amount of damage Apple and other suppliers estimated at $27 billion, and Qualcomm - at least $15 billion. It was assumed that the case in the San Diego court would last until May.

Why is it important. The settlement of the dispute paves the way for the release in 2020 of iPhones that support the next generation network. Apple has long been worried that an alternative supplier, Intel, will not have time to supply the company with modems for 5G. Back in June last year, the corporation announced that it was “late” with the development of new networks. altogether And in the end, Intel announced its departure from the 5G modem market . Instead, the company will continue to invest in network infrastructure. According to Intel CEO Bob Swan, there is no easy way for the modem business to become profitable.

For Apple, the release of iPhone with 5G is of fundamental importance - competitors Huawei and Samsung are releasing their first devices with support for the new network this year.

Find out more . Read more about what a transition to a new generation of cellular networks can bring to a business, we wrote here . A short reference on fifth generation networks is in our tech newsletter .