Apple and Qualcomm’s long litigation battle surprisingly ended today after both companies announced that they have reached a comprehensive settlement. The news caused Qualcomm’s share price to soar. As per reports coming out of China, Qualcomm’s share price soared by 23.42% to reach $70.57. This is the company’s largest single-day gain since 1999. Its market value has therefore increased by more than $15 billion to $86.3 billion US dollars.
On the other end, Apple’s stock price has not fluctuated significantly, and it has remained basically flat. According to reports, Qualcomm and Apple’s settlement agreement ended all ongoing litigation, including litigation with Apple equipment contract manufacturers. At the same time, the two companies have reached a global patent license agreement and a chipset supply agreement.
The six-year patent license agreement came into effect on April 1, 2019, and it has a two-year extension option. The settlement agreement includes an undisclosed payment made by Apple to Qualcomm and a chipset supply agreement for many years.
Analysis pointed out that this shows that Apple’s future iPhone may use Qualcomm’s chip. Qualcomm said it expects EPS to increase by about $2.00 as product shipments increase, and plans to provide further updates on its second-quarter earnings on May 1.