Qualcomm Jumps 23 Percent as Apple Drops all Litigation


One of NASDAQ’s largest winners today was Qualcomm  , a multinational semiconductor company that gets most of its income from producing chips.

Shares of the company spiked today when it announced that itself and Apple   had come to an agreement where they settled a patent dispute and dropped all litigation between the two. Additionally, the settlement would see Apple purchasing Qualcomm chips again for their iPhones, along with a six-year license agreement.

“Qualcomm and Apple® today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm. The companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement,” read an official press release.

The two companies began proceedings in a federal court in San Diego on Monday, with both sides asking for billions in damages. Originally filed by Apply in early 2017, the antitrust case proved to be a complex legal battle that’s been raging for over two years. Qualcomm stipulated that any company using its chips would pay licensing fees for its patents, while Apple argued that Qualcomm was abusing its power as one of the few suppliers for cellular technology.

The resulting arrangement would see a new six-year license agreement between the two companies along with an optional two-year extension. Apple also provided an undisclosed one-time payment to Qualcomm.

“This was a major win for Qualcomm as fears of a loss in the courts was a major overhang on the name with Apple going after this IP issue full steam ahead,” said Dan Ives, an analyst at Wedbush Securities according to CNBC. “A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court.”

In response to the excellent news, shares of Qualcomm jumped 23 percent on Tuesday, increasing by $13.27 dollars and settling the day at $70.45 per share, marking the best single day since 1999. Prices for Apple shares stayed essentially the same, with big movements in the tech behemoth being largely a thing of the past.

Qualcomm Company Profile

Qualcomm develops and licenses wireless technology and also designs chips for mobile phones. The company’s key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. In turn, Qualcomm’s IP is licensed by virtually all wireless device makers. The firm is also the world’s largest wireless chip vendor, supplying many premier handset makers with leading-edge processors. – Warrior Trading News

Apple Company Profile

Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, AppleCare and Apple Pay, among others.

Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News