A SHOCK SETTLEMENT between Apple and Qualcomm has forced Intel to exit the 5G modem market.
In a joint statement, Apple and Qualcomm announced "an agreement to dismiss all litigation between the two companies worldwide", including claims against Apple's contract manufacturing partners.
This brings an abrupt end to the complicated legal battle between the two firms, which began when Apple accused Qualcomm of charging more than it should on patents "for technologies they have nothing to do with." This triggered a series of countersuits, with Qualcomm contending that Apple was some $7bn behind on its royalty payments and that iPhones stuffed with Intel chips infringe on a number of its patents.
The agreement also ends the possibility of widespread iPhone sales bans; an initial verdict in Qualcomm's favour could have forced iPhone 7 and iPhone 8 from shelves in Germany.
As part of the settlement agreed on Tuesday, Apple will make a payment to Qualcomm for an undisclosed amount and the companies have reached a global patent licensing agreement effective as of 1 April 1 2019, which may be extended for another two years.
The firms have also agreed a "multiyear chipset supply agreement", which means Qualcomm's modems will once again appear in the iPhone; after the firms' legal squabbles began back in 2017, Apple dropped Qualcomm as a supplier and solely relied on Intel as its provider of LTE modems.
It was rumoured that Apple's 2020 iPhones would also feature modems made by Intel, but recent reports claimed that Apple had "lost confidence" in the chipmaker, which had been missing deadlines for the development of its XMM 8160 5G modem.
While at the time Intel debunked the rumours, saying in a statement that it "plans to support customer device launches in 2020 with its XMM 8160 5G multimode modem", the firm on Tuesday announced that it will quit building 5G modems for smartphones.
The not-so-surprising move, which likely explains the sudden settlement between Apple and Qualcomm, will also see Intel "complete an assessment of the opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices."
"We are very excited about the opportunity in 5G and the 'cloudification' of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns," Intel CEO Bob Swan said in a statement.
"5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world." µ
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