We now have a much clearer understanding of just how much the settlement with Qualcomm cost Apple. Yesterday, the chip maker announced their quarterly earnings. When it got to the revenue the company expects for the next quarter, part of that was a “cash payment from Apple and the release of related liabilities.” That cash payment will be somewhere between $4.5 and $4.7 billion according to Qualcomm’s financials.
There was little doubt that the big winner in the Apple-Qualcomm legal battle was the chip maker, given they walked away with not only a cash settlement but a six-year agreement with the Cupertino tech giant. That agreement assures their modems will be in the iPhone in earnest in 2020 and beyond. But neither company would comment on exactly how much had been agreed upon. The beauty of public companies is they have to share more on their financials than they would like at times.
For Qualcomm, forecasting this settlement figure was aimed at putting their stockholders at easy. Apple didn’t mention this in their forecasting for next quarter as it will be a loss for them.
The reality of the agreement is Apple had little choice. They had been pushing Intel hard to get their 5G modem ready for 2020 and Intel was struggling to do so. From their perspective, they needed to have a modem sorted for next year and settling with Qualcomm would assure they had a reliable source for them.