April 25, 2019
Apple v. Qualcomm: A PR win
The scene is this: The opening arguments for Apple vs Qualcomm are well underway in the Southern District of San Diego, with the US District Court Judge Gonzalo P. Curiel first disallowing, then reversing his decision and allowing live tweeting. Included in the passionate arguments are allegations of double-dipping, talk of KFC and its secret recipe, debates over chicken and potatoes. Who says the world of corporate law is a dull one?
Now, seemingly out of nowhere, Apple and Qualcomm have agreed to drop all litigation.
As part of their announcement, both firms announced plans to drop all global litigation between the two firms, including a settlement payment from Apple to Qualcomm. The companies also announced a six-year license agreement, effective from 1 April 2019, made up of a two-year option to extend and a multi-year chipset supply agreement. At the same time, Intel announced plans to exit the 5G Smartphone industry.
Within the span of an hour, the industry shifted from one where Apple and Intel were working on modems for future iPhones, and Qualcomm was fighting its way in from the cold. Now, Intel has bailed from the business and Apple has settled with Qualcomm. The Twitterverse, of course, was abuzz with theories:
“Who moved first?#intel exits modem business #Apple needs #QUALCOMM #intel is late with #5G #Apple goes to #Qualcomm kills the Intel modem business. Either way #QUALCOMM was just waiting to get the call,” wrote one user.
“Intel likely decided they didn’t want to be in the modem business as new management took over. That was likely the first ball to drop. Apple saw the writing on the wall and needed to settle sooner than later. All the days events feel very coordinated,” wrote another.
It is this last line that rings the truest: the days events were laced with a kind of serendipity that surely hid the reality of behind-the-scenes negotiations.
Either way, the outcome of the settlement looks like a big win for both parties. Qualcomm is now set to enjoy Apple’s all-in investment over the next six to eight years; all the money that Apple and its manufacturing partners are holding on to will finally start to flow.
At the same time, Apple seems to have finally carved out a moment of peace for itself amid a tide of bad press. On the back of a lukewarm global reception of Apple’s smartphone output earlier this year, an ongoing regulatory feud with Spotify followed by damning reports that the technology giant is exploiting small-time players in the creative industry, Apple’s move to settle and announce a new partnership is surely music to the Apple PR team’s ears.
Indeed, while there is no such thing as bad press, the latest developments in the ongoing Apple v. Qualcomm saga is very good press for the embattled technology giant.
-5WPR CEO Ronn Torossian