Qualcomm Inc. said on Monday it has signed a new deal with Apple Inc. to supply 5G chips for the iPhone maker until at least 2026. The deal is a major win for Qualcomm, which has been locked in a legal battle with Apple over patent royalties.
Under the terms of the deal, Qualcomm will supply Apple with 5G modem chips for all of its iPhones and iPads that are released in 2023 and beyond. The deal is reportedly worth billions of dollars.
The new deal is a significant departure from the previous agreement between Qualcomm and Apple. The previous deal, which expired in 2023, only allowed Qualcomm to supply chips for a limited number of iPhones.
The new deal is also a sign of the thawing relations between Qualcomm and Apple. The two companies have been at odds for years over patent royalties. In 2017, Apple sued Qualcomm for antitrust violations, alleging that the chipmaker had abused its monopoly power in the market for 4G modem chips.
The two companies eventually settled the lawsuit in 2019. Under the terms of the settlement, Apple agreed to pay Qualcomm billions of dollars in royalties.
“We are pleased to extend our long-standing relationship with Apple and to continue to provide them with our industry-leading 5G modems,” said Cristiano Amon, CEO of Qualcomm. “This agreement is a testament to the strength of our technology and our commitment to delivering the best possible experience for our customers.”
Cristiano Amon, CEO of Qualcomm
Analysis:
The new deal is a major victory for Qualcomm. The company has been facing increasing competition from rivals like MediaTek and Samsung. The new deal with Apple ensures that Qualcomm will remain a major supplier of 5G chips for the foreseeable future.
The deal is also a positive development for Apple. The company has been working on its own 5G modem chips, but it has not yet been able to produce them in volume. The new deal with Qualcomm gives Apple more time to develop its own chips and ensures that it will have a reliable source of 5G chips in the meantime.
Conclusion:
The new deal is a win-win for both Qualcomm and Apple. It ensures that Qualcomm will remain a major supplier of 5G chips for the iPhone maker, and it gives Apple more time to develop its own chips.