The treaty of Vers-iPhone... Apple announced a legal truce Tuesday with Qualcomm. The patent lawsuit courtroom drama is over. Then it shockingly defined the relationship, announcing they're biz partners. Again. Qualcomm shares hulked out, surging 23% on news they'll supply iPhones once again.
Designed in California. Made in China. Litigated everywhere... The relationship between Apple and Qualcomm is swinging back to love after previous love/hate chapters:
- 2007 - 2016: Qualcomm provided Apple bits of hardware that helped iPhones destroy BlackBerry, Motorola, Nokia, and a million other now-obsolete gadgets.
- 2016 - 2019: Apple ditched Qualcomm for Intel. Qualcomm went on a suing rampage, claiming Apple whispered its secrets into Intel's ear and profited off its patented tech.
- Yesterday: Apple settled — It's paying Qualcomm an undisclosed amount for past misdeeds. And it's switching back to Q for iPhone modems. Lawyers aren't thrilled.
- The next six years (with option to extend for two more): Based on our rough calculations, that'll add $3B-$5B annually in sales for Qualcomm (that's a big, big deal).
Qualcomm's leverage = 5G... The San Diego-based chip-maker is one of just a few making chips needed for the new 5G network. Intel is reportedly behind (you can't round up from 4.5G), and China's Huawei was labeled a national security threat. Apple needs Qualcomm.
PS: Right after the deal, Intel announced it's done with 5G. That's one way to rebound from getting broken up with by Apple.