Qualcomm’s deal with Apple last month ended a long-running dispute over Qualcomm’s patent-licensing fees Qualcomm will receive a windfall of between $4.5 billion and $4.7 billion as part of its settlement deal with Apple. The company revealed the figure during its latest quarterly earnings call. The semiconductor company said that it expects to receive the sum in
Qualcomm’s deal with Apple last month ended a long-running dispute over Qualcomm’s patent-licensing fees
Qualcomm will receive a windfall of between $4.5 billion and $4.7 billion as part of its settlement deal with Apple.
The company revealed the figure during its latest quarterly earnings call.
The semiconductor company said that it expects to receive the sum in the third quarter of the financial year, which ends in June.
Excluding the payment from Apple, Qualcomm has forecast third quarter earnings of between $4.7 billion and $5.5 billion. About $1.23 billion of that revenue will come from patent licences, including the recently agreed deal with Apple.
Qualcomm’s deal with Apple, which includes a chip supply agreement and a six-year patent licence, was announced last month. The deal ended a long-running dispute between two companies over Qualcomm’s patent-licensing fees.
Neither of the two companies provided much detail about the deal when it was announced last month, other than to say that Qualcomm would receive a one-time payment from Apple as part of the agreement.
According to Bloomberg, Apple agreed the deal after arriving at the conclusion that Intel won’t be able to supply modems in time for its planned 5G iPhone. The company, therefore, decided to fold, paying Qualcomm between $4.5 and $4.7 billion to settle the two company’s dispute.
That amount is separate from the royalty payments that Apple will pay for using Qualcomm technology in its devices.
According to Qualcomm, the deal won’t necessarily be an instant financial game changer, but the new deal with Apple should generate an extra $2 per share in additional earnings.
“We delivered a better than expected quarter with earnings per share above the high end of our estimates,” said Qualcomm CEO Steve Mollenkopf. “We are also pleased to have reached multi-year agreements with Apple and look forward to continuing to support them as a customer.”
The company posted net income of $663 million for its second quarter to the end of March 2019, up from $330 million in the same quarter in 2018. Revenue in the second quarter dropped to $4.88 billion, but was just ahead of analysts’ consensus estimate of $4.80 billion.
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