Qualcomm stock jumps 23% on surprise settlement with Apple
Qualcomm on Tuesday won a major victory in its wide-ranging legal dispute with Apple as both reached a surprise settlement that called for the iPhone to once again use Qualcomm modem chips.
Shares of Qualcomm jumped 23 per cent to US$70.45 (S$95.28) in regular trading, their biggest gain in more than 19 years. They then hit US$75.25 in after-hours trading.
Intel, which had been Apple's sole iPhone chip supplier for the past year amid intensifying conflict with Qualcomm, said after the settlement was announced that it would exit the modem chip business.
The Qualcomm settlement incorporates a six-year patent licence and a payment from Apple to Qualcomm, but the companies did not disclose the amount. And as Qualcomm is already shipping 5G chips while Intel was still developing them, the deal helps Apple in its battle with Samsung Electronics and other manufacturers whose phones already work on the faster networks.
"This is a big win" for Qualcomm, said Mr Christopher Rolland, an analyst at Susquehanna Financial Group.
The settlement followed two years of increasingly bitter legal battles between the two companies and came as opening arguments took place at a trial in federal court in San Diego.
Shares of Intel were up 2.7 per cent at US$58.25 in after-hours trade. Apple was barely changed after hours. - REUTERS