Apple
As part of the settlement, Apple will pay Qualcomm an undisclosed sum to account for past products and collaborations. The deal also includes a six-year license agreement for the future and a multiyear deal under which Qualcomm will provide Apple with modem chips.
As a result of the settlement, which would "dismiss all litigation between the two companies worldwide," Qualcomm's shares rose by 23%. This is the direct result of a boost in investor confidence resulting from the elimination of litigation as a source of fiscal instability.
"This is an enormous win for Qualcomm because the suit and related suits were life-threatening to the company," said Roger Kay of Endpoint Technologies Associates. "For Apple, a loss would have been financially punishing, but for Qualcomm, this would have destroyed the business. This is like a new lease on life."
Qualcomm had initially claimed that Apple violated certain patent agreements by withholding royalty payments. Apple countered the claims by stating that the former had in fact, significantly overcharged for those patents. In fact, Apple's lawyers attempted to depict Qualcomm as a monopolist that had used its patent portfolio to charge hefty licensing fees of 5% of the retail price of iPhones sold globally, with the fees maxed out at $400 a phone.
The notion of reaching an out-of-court settlement in order to preserve its own market power and technological hegemony is no new move in Apple's playbook. In 2015, the US Court of Appeals put out a ruling in which Apple had to pay $450M for colluding with ebook sellers to fix ebook prices.
After the court had made its decision, Judge Gonzalo Curiel told the jurors: the agreement will "allow these tech companies to get back to business and you to return to your everyday affairs."
