Huawei has no plans to supply Apple with 5G modem chips

Apple chief executive Tim Cook

The settlement, which includes an agreement by Apple to use Qualcomm's chips, may help Apple's plans to add high-speed 5G service to its future phones.

The news sent Qualcomm's stock price soaring more than 23 percent on Wall Street, its best one-day performance in almost 20 years.

While Intel has not indicated a link between the two announcements, the news comes just after Apple and Qualcomm said they are bringing their legal battles to an end.

Today is a day few of us thought would ever come: Apple and Qualcomm have called a truce and ceased all litigation against each other around the world.

The two companies have been at odds since Apple ordered its suppliers to stop paying patent royalty fees to Qualcomm in 2017.

In addition to calling it quits on 5G modems for smartphones, Intel is also reassessing its commitment to 4G LTE and 5G modems for PCs and IoT devices. As a result, the face of the cellular modem market is changing in an instant, as Apple's shift in allegiances will have repercussions throughout the industry. While Qualcomm did not close the terms of the deal, analysts estimated that Apple withheld $5 billion, or about $2 per share, under its previous royalty payment agreement.

In a sudden and unexpected move, Apple and Qualcomm announced today that they have ended all ongoing litigation and have reached global patent license and chipset supply agreements.

Investors sensed a resounding victory for mobile chip maker Qualcomm, bidding up its stock price 23% within minutes of news of the settlement.

It is possible, of course, that Qualcomm and Apple realized it wasn't in their own mutual best interest to keep fighting each other.

CNBC was the first to report the settlement, with confirmation from Apple and Qualcomm coming shortly afterward Tuesday.

Apple and Qualcomm have both taken turns delivering blows to one another over the last couple of years, and just this past Monday, trial proceedings had begun in San Diego.

Along with licensing Qualcomm's patents, Apple is also going to resume buying chips from Qualcomm.

Now that the dust has settled, Apple can start testing a 5G-enabled iPhone with Qualcomm's latest and faster modems.

FILE PHOTO: An employee of German Apple retailer Gravis displays an iPhone 7 and 8 in a store in Berlin, Germany, January 3, 2019. Ahead of Apple and Qualcomm burying the hatchet, Intel acted as a bit of a bargaining chip for Apple by supplying modems for some iPhone models despite generally offering weaker performance than the Qualcomm alternatives.

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