Last week, the San Diego Federal Court turned into a planet Titan where two bigwigs fought amidst judges and nine jury members to decide the fate of both the tech giants and of course, “5G technology”. Yes, I am talking about the Qualcomm and Apple feud which has been resolved after exchanging arguments and a lawsuit that ran over two years.
Both the parties decided to go through with the opening arguments where Apple lashed out on Qualcomm for breaking promises within the industry. The Cupertino-based tech giant alleged Qualcomm by charging it twice for the same technology twice in what is summoned of Bermuda Triangle of contracts. Apple argued that Qualcomm has been using its cellular chip making chops and its dominant market share into strong-arming smartphone makers where they are left out to pay a dubious amount for its patents including wirelessly connected pants that device makers don’t use.
Qualcomm, on the other hand, argued that Apple has been internally planning to attract San Diego-based chipmaker since 2014 where it has been able to cast doubts on Qualcomm’s 140,000 patents that could allow it to withhold payment of billions into hamstringing the company into a financial pothole. It also argued how Apple is reluctant in paying patent royalty of $11 to $15 per unit when it actually sells iPhones for more than a grand with almost more than 50% as its profit which is a known fact.
Anyways, after the lawsuit ran its course spanning over two years, Qualcomm and Apple decided to make a settlement although most of the clauses remain undisclosed. We do know that Apple signed up Qualcomm for a direct six-year patent license agreement with a one-time payment and it includes clauses like chip supply agreement, option to renew, and more.
According to the report that states the various detailed about the lawsuit, the settlement has finally benefitted both parties where Qualcomm was able to remove a key threat to its patent licensing business model while Apple could look after its upcoming iPhones with 5G as early as next year (2019) which wouldn’t have been a case with Intel which recently reported delays in the development of its 5G modem. Anyways, Intel has officially discontinued any development of 5G cellular processes after Qualcomm’s settlement as it doesn’t see any path to profitability in making 5G modems.
Even though Apple and Qualcomm have settled for good, there is an ongoing pending decision between Qualcomm and U.S. Federal Trade Commission who filed an antitrust lawsuit against the former.
There are several aspects in this lawsuit between U.S. FTC and chipmaking giant Qualcomm where both the parties are waiting for Judge Koh to provide a resolution and judgment on it. FTC accused Qualcomm of practicing anti-competitive effect in growing its technology market share and since Huawei is also dominating 5G technologies globally, it has added pressure on the U.S. Federal Trade Commission as affecting Qualcomm’s patent licensing business model could end up hurting the chipmaking firm that would present impacts on its research and development.
Since Apple is out of the equation as the sole American smartphone maker siding with Qualcomm, FTC could drop the lawsuit against Qualcomm altogether.