Mubasher: Apple may have paid between $5 billion and $6 billion to settle its bitter legal battle with Qualcomm, according to Swiss bank UBS.
Apple paid a big price to settle their litigation that threatened its ability to launch a fifth generation (5G) iPhone and placed Qualcomm’s licensing business model under pressure.
Both companies announced a settlement to their legal dispute earlier this week as a trial in one of their legal feuds has already started.
They said that the settlement comprised a one-time payment from Apple and a chipset procurement agreement, which suggests that future iPhones would be equipped with Qualcomm modem chips.
Apple may have also agreed to pay Qualcomm between $8 and $9 in patent royalties per iPhone, UBS analyst Timothy Arcuri estimated, citing the mobile-chip giant’s guidance which expects earnings per share (EPS) to rise by $2 after the settlement.
The paid one-time amount would have been for royalty fees that the iPhone maker stopped paying throughout two years of legal dispute with Qualcomm, Arcuri said.