Qualcomm renews global patent license with Apple, effective April 1, 2027

Apple is reducing its reliance on Qualcomm's baseband chips, but the patent relationship between the two companies continues.

On September 24, Qualcomm announced the renewal of its global patent licensing agreement with Apple, effective April 1, 2027. Qualcomm did not disclose the term, royalty rates, or other financial terms of the new agreement.

The brief statement has drawn attention because Apple is advancing its in-house development of baseband chips.

Background of the Partnership

In 2019, Qualcomm and Apple ended a two-year global patent dispute. The settlement included:

• A payment from Apple to Qualcomm
• A six-year global patent licensing agreement effective April 1, 2019, with a two-year extension option
• A multi-year chip supply agreement

Subsequently, Qualcomm and Apple signed a chip supply agreement to provide 5G modems for iPhones from 2024 to 2026.

Shift in Focus

Notably, Qualcomm's latest announcement covers only the patent licensing renewal, with no mention of new chip supply arrangements. Against the backdrop of Apple's push for self-developed baseband chips, the focus of the partnership is shifting from chip supply toward patent licensing.

Qualcomm has previously acknowledged that reduced chip purchases by Apple will impact its chip business. In July, Qualcomm projected a faster decline in revenue from Apple and plans to partially offset this impact through growth in non-handset businesses such as automotive and data centers.

Continued Patent Relationship

However, declining chip revenue does not mean the end of the business relationship between Qualcomm and Apple. Qualcomm's business includes both chips and patent licensing. Even if Apple gradually reduces its procurement of Qualcomm baseband chips, it will still need to license Qualcomm's patents as long as it continues to use related communication technologies.

The term and technology coverage of the new agreement have not been disclosed. For reference, in 2022, Qualcomm and Samsung extended their patent licensing agreement for 3G, 4G, 5G, and future 6G mobile technologies through the end of 2030, while also expanding their Snapdragon platform collaboration. Whether the Apple agreement involves 6G remains unknown.

Implications for Chinese Smartphone Makers

This development is also noteworthy for Chinese smartphone manufacturers. Developing in-house chips can reduce reliance on external chip suppliers, but it does not eliminate the intellectual property costs associated with communication standards.

In recent years, Chinese smartphone makers have accelerated in-house chip development while expanding into overseas markets. However, even as they gradually reduce dependence on external chip suppliers, as long as their phones continue to use communication standards such as 3G, 4G, and 5G, they will still need to license relevant standard essential patents (SEPs).

For Chinese smartphone manufacturers targeting global markets, managing communication patent licensing will remain a long-term challenge beyond the chip supply chain.

Editor on duty: Yulin