Published: Wed, April 17, 2019
Electronics | By Shannon Stone

Huawei Confirmed That It Did Not Contact Apple for 5G Modems

Huawei Confirmed That It Did Not Contact Apple for 5G Modems

That more or less is the question to be decided by a United States court as Apple seeks billions in damages from former chip supplier Qualcomm.

The Qualcomm settlement also incorporates a six-year patent license and a payment from Apple to Qualcomm, but the companies did not disclose the amount. This means that the pair will stop any further litigation (as far as this particular matter is concerned).

After jury selection in the San Diego federal court, arguments are expected to begin Tuesday.

Neither Apple nor Qualcomm released statements illuminating why the settlement occurred so abruptly, however, according to Nikkei, Apple was growing concerned about Intel's ability to supply next year's iPhone models with 5G modems.

Apple has been aggressively hiring RF engineers in San Diego, where Qualcomm is located.

Qualcomm stock rose more than 20% after the news broke, boosting its market cap by about $14.5 billion to more than $84 billion. Intel, which is now the sole supplier of 4G LTE modems for Apple's current generation of iPhones and iPads, just announced that it is throwing in the towel on 5G modem development for smartphones.

China's Huawei Technologies said on Tuesday it has not held talks with Apple Inc about supplying 5G chipsets, a day after its founder said it was open to selling such chips to the USA firm which has yet to unveil dates for a next-gen iPhone.

Later Qualcomm hit back with its own lawsuit, alleging that Apple used its heft in the electronics business to wrongly order contract factories such as Hon Hai Precision Co Ltd's Foxconn to withhold royalty payments from Qualcomm that Apple had historically reimbursed to the factories. It's not yet clear whether this agreement was made early enough to get Qualcomm hardware in the 2020 iPhone 5G - we shall see.

The settlement could also help Apple and Qualcomm compete against Chinese rival Huawei. The case was expected to last until May. The antitrust case was originally filed by Apple in early 2017. Apple claimed Qualcomm abused its position as the primary supplier of cellular chips and was overcharging for chips, using anti-competitive and monopolistic practices. This means that Apple is not dependent on Qualcomm's modem chips. Apple stock was flat.

However, on April 16, 2019, the two companies issued out a press release to announce that they've reached a settlement. A separate chipset supply agreement has been inked; though the official announcement doesn't say for how long beyond the fact that it's a "multiyear" agreement.

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