Litigation between US tech giants was dulling Silicon Valley’s edge in 5G.
After two years of bitter legal squabbling, Apple and Qualcomm have agreed a settlement deal, which includes a payment from the former to the latter.
The agreement ends all ongoing litigation, including with Apple’s contract manufacturers.
The companies have also reached a six-year licence agreement, effective as of 1 April 2019, including a two-year option to extend and a multiyear chipset supply agreement.
At the heart of the deal is 5G and it is interesting that just as Qualcomm and Apple reach a settlement, rival chip giant Intel has announced that it is exiting the 5G smartphone modem business.
Apple originally sued Qualcomm, claiming the latter was charging exorbitant prices for what the iPhone giant claimed were original Apple innovations. Meanwhile Qualcomm, a major player in the smartphone and automotive space with major designs on the internet of things (IoT) market, countersued, claiming that the iPhone’s success would not have been possible without Qualcomm technology. Qualcomm even made the explosive claim that Apple shared confidential intellectual property with rival chip giant Intel.
Now that the matter has finally been put to bed, it might be a signal for the US, and Silicon Valley in particular, to return to the battlefield when it comes to 5G innovation. That battlefield has been dominated by Chinese tech giant Huawei.
The 5G battle space
“Qualcomm invents breakthrough technologies that transform how the world connects, computes and communicates,” the company said in a statement.
“When we connected the phone to the internet, the mobile revolution was born. Today, our inventions are the foundation for life-changing products, experiences and industries. As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices, and enabling new opportunities in connected cars, remote delivery of healthcare services, and the IoT – including smart cities, smart homes and wearables.”
The business of 5G innovation hasn’t so much been disrupted by rival Chinese players such as Huawei as it has been flooded, no doubt raising the hackles of US lawmakers.
Huawei has been under a lot of pressure from the US and its allies, which claim security vulnerabilities in the Chinese company’s technology, leading to calls by Five Eyes countries to ban it, a call that has been largely resisted by more sober forces in Europe. The scrutiny has even led to the arrest of Huawei founder Ren Zhengfei’s daughter, Meng Wanzhou, regarding the alleged breach of a trade embargo against Iran, among other charges.
Without the distraction of litigation across three continents, Apple and Qualcomm can resurge as a formidable force to compete with Huawei in terms of phones, chipsets and, in particular, modems. In terms of smartphones, Huawei has already surpassed Apple in global phone sales and is now vying for the number one position against South Korea’s Samsung.
However, where the US is losing the fight (and probably could never win it anyway) is in terms of the actual cellular networks and radio access technology. While Cisco is still a force in the network-switching technologies that define the internet and global data networks, the battlefield for radio access networks and core networks is really a three-horse race between Huawei and European rivals Nokia Siemens Networks and Ericsson.
While the US can certainly fight in terms of devices and chipsets, the ultimate question is, can the US really build its 5G future without Huawei technology somehow coming to bear? Or will the US fall behind in the 5G race because of its Cold War-esque stance against Asian firms?
Either way, the end of the litigation between Apple and Qualcomm is a chance for the US to get back into the fight.