Apple and Qualcomm Renew Global Patent License; Apple Shares Hit Record High

September 25, Local Time — Shares of Apple and Qualcomm surged in U.S. trading, with Qualcomm rising nearly 4% and Apple's stock price reaching an all-time high. Apple's market capitalization increased by more than 500 billion yuan overnight.

On September 24, Qualcomm announced on its official website that it had renewed a global patent licensing agreement with Apple. The new agreement will take effect on April 1, 2027.

Qualcomm did not disclose detailed terms of the licensing arrangement. Previously, in September 2023, Qualcomm Technologies had announced a separate agreement to supply Apple with Snapdragon® 5G Modem-RF Systems for smartphones to be launched in 2024, 2025, and 2026.

A History of Legal Disputes and Reconciliation

Apple's publicly expressed desire to reduce reliance on Qualcomm dates back to 2017, when the two companies initiated patent litigation in multiple jurisdictions worldwide. The disputes were resolved in 2019, when Apple and Qualcomm reached a settlement. The agreement, effective from April 2019, included a multi-year licensing deal with a six-year term and an option to extend for two additional years.

Under the 2019 settlement:

• Apple agreed to pay Qualcomm a patent licensing fee
• Apple made a one-time payment to Qualcomm
• The two companies entered into a multi-year chipset supply agreement

Apple's Push for In-House Chip Development

In July 2019, Apple and Intel jointly announced that Apple would acquire Intel's smartphone modem business for $1 billion. The acquisition brought:

• 2,200 Intel employees into Apple
• 17,000 wireless technology patents, covering cellular standards, modem architecture, and modem operations

This move signaled Apple's intent to strengthen its in-house chip capabilities, particularly in baseband technology, even as it continued its partnership with Qualcomm. However, due to the vast intellectual property landscape surrounding baseband chips, Apple has not fully severed ties with Qualcomm.

Shifting Focus: From Chip Supply to Patent Licensing

Broadly speaking, Apple and Qualcomm's collaboration consists of two components:

• Chip supply: Qualcomm provides baseband chips to Apple
• Patent licensing: Cooperation on communications patent licensing

The relationship appears to be shifting from a combined chip supply and patent licensing model toward a greater emphasis on patent licensing alone.

Qualcomm's Outlook on Declining Apple Revenue

Qualcomm has already prepared the market for a gradual decline in revenue from Apple. During its most recent earnings call for the third fiscal quarter of fiscal 2026 (ended June 28), Qualcomm executives noted that, due to supply constraints, the decline in product revenue from Apple is expected to accelerate starting in the fourth fiscal quarter of this year. This is because Qualcomm's contribution to upcoming iPhone models is projected to be significantly lower than the previously estimated 20%.