Apple-Qualcomm settlement expected to accelerate Apple’s entry into 5G market

Apple and Qualcomm have surprisingly agreed to settle their 30 trillion-won patent dispute on the first day of their trial. The two American “IT dinosaurs” issued a joint statement on Tuesday (local time) that they reached a license agreement and agreed to drop all litigation between the two companies worldwide.

The settlement has put an end to their patent dispute that started in January 2017, when Apple filed a lawsuit against Qualcomm. Against this backdrop, Apple is projected to release its first fifth-generation (5G) iPhone model that employs Qualcomm’s 5G modem chip as early as within this year.

The global electronics industry considers that the two IT giants that represent the U.S. have decided to choose “reconciliation” over “brinkmanship” in order not to fall behind in the global 5G market. Samsung Electronics’ releasing of “Galaxy S10 5G,” the world’s first 5G smartphone, early this month may have provoked a sense of crisis for Apple.

Apple and Qualcomm actually agreed to settle their legal battles only hours after the opening arguments took place at a trial in San Diego federal court. The exact amount and conditions have not been disclosed but the two companies agreed to sign a six-year license agreement, effective April 1 of this year, with the option to extend for two years and a one-time royalty payment to Qualcomm from Apple.

This agreement allows Qualcomm to maintain its licensing based profit model and secure the biggest customer in the premium smartphone market.

Apple’s earlier-than-expected entry into the 5G market is expected to have a positive impact to Samsung Electronics. “A market can grow fast when there are a fast growing number of players,” a domestic communications industry official. “Apple’s participation in the development of 5G smartphones following Samsung is expected to invite more investments from global mobile carriers and draw more customers to the stagnant global smartphone market.”


Ji-Hyun Kim jhk85@donga.com · Yong Park parky@donga.com