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Apple Reportedly Paid Qualcomm an Estimated Single $6 Billion Payment, to End Patent Licensing Lawsuit

Apr 18, 2019
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While it was reported that Apple and Qualcomm ended their legal skirmish once and for all, it wasn’t recorded how much it cost to reach that agreement. Sure, with both companies presumably rekindling their business relationship, we now have higher hopes of seeing a 5G iPhone lineup next year. As for what the reported amount was, a UBS analyst might have a clue concerning the agreement, so let us dive deep into the details.

Apple Will Also Reportedly Pay Nearly $9 per iPhone to Qualcomm – These Earnings Do Not Include the $6 Billion Payment

According to a research note from UBS, Qualcomm turned out to be the lucky recipient of a hefty sum from Apple. One reason UBS believes Apple was willing to pay such an amount to Qualcomm could be that the technology giant was having trouble securing 5G modems from other suppliers. While Huawei would seem like the ideal candidate for this requirement, turns out that the Chinese behemoth did not have any communication with Apple related to providing 5G modems. Also, since Qualcomm is the market leader when it comes to this part of this industry, Apple would likely have no choice but to give in to the demands.

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Qualcomm might not have disclosed about the payment details, but UBS believes Apple will be paying between $8-9 per iPhone, making it higher than the $5 per device that was assumed earlier. These earnings do not account for the amount in the range of $5-6 billion that was agreed earlier to end the lawsuit. In short, looks like Qualcomm will happily be hopping all the way to the bank. A lot of people might also comment that Apple has the engineering talent and resources to develop its in-house communications modem, so why would it proceed to agree to such demands?

It’s true, Apple has hired a dedicated team to make an in-house modem but unfortunately, industry watchers state that it will take a significantly long period for Apple to materialize a workable silicon. It is even more ridiculous to think of developing an in-house 5G baseband solution at this time as Apple’s team needs more time to form a quality product. The company most likely knew it was wasting crucial time and bleeding money in legal battles so forming an alliance in the short term would be best for business.

What reasons do you think Apple would have to pay Qualcomm a huge sum, while also giving the chipset manufacturer additional payments per iPhone sold? Let us know your thoughts down in the comments.

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Source: AppleInsider

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