Qualcomm and Apple Extend Chip Licensing Agreement

Qualcomm Inc. announced on Thursday it has extended its chip licensing agreement with Apple Inc., continuing a critical technology partnership between the two giants. The extended agreement is set to become effective on April 1 of next year, according to a statement reported by Reuters.

Extension of 2019 Settlement

The renewal builds on a landmark deal first established in April 2019. That agreement ended a bitter, two-year global legal battle between the companies over wireless patent royalties and the supply of modem chips.

The original settlement included an undisclosed payment from Apple to Qualcomm, the dismissal of all worldwide litigation, and a six-year global patent licensing deal. The 2019 agreement also contained an option for Apple to extend the license by an additional two years.

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Implications for Investors

For Qualcomm, the extension provides continued stability for its highly profitable licensing division by securing a key customer. The ongoing partnership reinforces the value of its extensive portfolio of wireless technology patents.

For Apple, the decision to extend the agreement suggests that its long-term strategic effort to develop its own in-house cellular modem chips may not yet be ready for a complete transition. The deal ensures continued access to Qualcomm's technology for its products. The companies did not provide further comment on the details of the agreement, according to the report.