Qualcomm reveals Apple's final 5G iPhone desperation bill, Tim Cook is glad it's over with

Qualcomm reveals Apple's final 5G iPhone desperation bill, Tim Cook is glad it's over with
In one fell swoop, Apple cut its self-inflicted Gordian knot of 5G modem supply and paid Qualcomm undisclosed amount to settle the patent litigation and secure a multi-year contract for 5G iPhones. Apple had little choice but to settle, as Intel threw in the towel on 5G modem development when it learned that Qualcomm resolved its patent issues with Apple, while America's homeland security institutions would balk at Huawei's involvement due to geopolitical considerations.

Samsung, on the other hand, simply can't make enough of its own 5G modems to exclusively supply another huge customer. Apple will reportedly still hedge its Qualcomm bets with Samsung as a side dish. If you are wondering why, it is most likely planning to use the more advanced Qualcomm modems in placed where mmWave spectrum 5G networks are being established, while Samsung's more affordable solution will remain for the sub-6 GHz crowd.

Effective as of April 1, Qualcomm went for a six-year global patent license agreement with Apple, with the option to be extended for two more years, and a seemingly endless chipset supply contract. Its financial terms are undisclosed no more, as Qualcomm tucked the lump sum amidst its quarterly results forecast for this current quarter which the company deems the third one in its fiscal year count.


If it wasn't for the $4.5 billion haul from Apple, Qualcomm's revenue would have been down year-on-year - both the licensing business, as well as the chipset sales. Still, it made more than a billion in profits, and a huge chunk of that comes from patent licensing and royalties hauled in from nearly every major phone maker, including Huawei which makes its own chipsets and 5G modems. With the Apple agreement, the health of that business segment is only poised to grow further, considering the tens of million of iPhones that Apple is selling each quarter.

Et tu, Apple? To 5G or not to 5G


"It’s personal. I don’t see anybody who can bridge this gap," tipped the WSJ recently about Apple and Qualcomm CEOs relationship but the big boys ironed out their differences quickly. Famed Apple analyst Ming-Chi Kuo forecasts a fall 2020 release date of the future 5G iPhones. That's the same timeframe as before but this time around, Apple is in a position to use the best that the 5G market can offer without triggering the NSA, CIA and other three-letter agencies' wrath.

Verizon got South Korea beat with the first commercial 5G connection to a retail handset, but the Koreans launched a nationwide 5G network, with the Galaxy S10 5G being its poster child when not in flames. We kid, but upon the phone's release there, Korea has all of its carriers offering 5G plans now. Korea Telecom announced three 5G price tiers. Among those, there is a "Super Plan" that offers truly unlimited 5G data without speed caps, and this one will go for the equivalent of $70, a pretty good price no matter how you slice it.

A true nationwide shift to 5G networks is not happening this year in the US anyway, despite Verizon lighting up more cities soon, so iPhone users won't be missing all that much until then. Next year, however, most of the flagship phones of the spring season will probably have some sort of 5G connectivity support, be it with a Qualcomm, Samsung or Huawei modem, and Apple could have felt the pinch in that regard, hence the settlement with Qualcomm. 

Apple's CEO Tim Cook went on record during the conference call with analysts yesterday to comment on the deal with Qualcomm and its 5G plans going forward:

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5 Comments

3. iloveapps

Posts: 855; Member since: Mar 21, 2019

Well the thing that matters here is Midan would be so glad that in 2020 apple will be using Qualcomm chip. I’m happy too because I don’t like to use an inferior intel or samsung chip.

4. mudcat626

Posts: 230; Member since: Jul 13, 2016

Something different happening here. After Apple earning call came on Tuesday, you see all the negative hyped stories , like this one, IPhone sales tanking, Huawei about to take over the world, etc, etc, but the stock price keeps going up..........

5. iloveapps

Posts: 855; Member since: Mar 21, 2019

Your stupid ignorant android troll. Analysts sees the light of revenue in services. Wake up man! People don’t replace their phone every year so apple’s strategy is to lock them up with services that no android can come up.

9. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Well the stupid one is really the individuals that want to be locked into Apple's services. Especially when Apples iPhone sales globally are tanking. If Apple really wants users around the world to use their services, then Apple's services cannot be exclusive to Apple hardware. Which the vast majority of Apple's services are only available to Apple's platforms, and only Apple's platforms. The people that need to wake up are the Apple users. Cloud computing is the next major phase of computing, and please tell us where Apple is in that area. I will tell you Apple is next to nowhere when it comes to cloud computing. Also Apples AI endeavors place Apple at a stage where they are still throwing things at a wall, or basically close to no where.

7. oldskool50 unregistered

The only issue I have with this article, is you seem to keep panning out that, somehow this is Qualcomm's fault. Qualcomm is the only company that offers the tech that they offer in their hardware, because Qualcomm spends the time and money with every wireless carriers that OEM's will be making phones for, to ensure they offer the best possible hardware that is compatible with the type of services carriers need to offer. Even Broadcom does not offer this. Imagine the staggering costs it takes to sit and work with 100's of wireless providers all over the planet, to create what is basically a single solution that works for ALL of them. If you go and sign a lease to pay rent for a certain amount, you don't get to go to the court and say, I'm paying to much I need you to reduce what I am paying, because we are gettign less sales and we need to increase profits. Qualcomm was simply waiting for Apple to give up, because no matter how much money Apple would have spent fighting this, they would have lost anyway and they would have ended up paying far and away more money that they owed Qualcomm. At that point Apple was owing QC about $7-10B in cash. Apple losing would not only have meant they had to pay that, but they would have had to pay all of QC's legal fees and any extra loses that the court would have deemed Apple needs to pay for trying to hurt QC to begin with. This could have easily doubled or even tripled what Apple already owned. If every OEM would just stick it to Apple like they should, Apple wouldn't be a problem, because none of them need Apple, Apple needs them and Apple just found out they are not as powerful as they think they are. Now Apple is gonna be paying more money, and they have to pay off most of what they didn't pay before. Apple motto is, if you create a product, then you have a right to charge whatever you think it's worth. So why is this not Ok for anyone else? $7.50 per iPhone for a device, you charge 200%+ above what it costs you to make, seems like a really small price to pay, for a piece of hardware designed just for you and only you can use it.

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