Qualcomm (NASDAQ: QCOM) and Apple (NASDAQ:AAPL) have settled their royalty dispute.
The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that Apple will buy Qualcomm chips for future iPhones. The companies did not say how much the payment will be.
Qualcomm stock rose more than 20% after the news broke, boosting its market cap by about $14.5 billion to more than $84 billion. It’s Qualcomm’s best day since 1999. Those shares began Wednesday’s trading day ahead $9.87, or 13.6%, to $80.32
Apple was up $1.79 to $201.04. Intel (NASDAQ:INTC), a Qualcomm competitor, sharply dipped on the news before recovering.
Qualcomm says it expects incremental earnings per share of $2 as product shipments ramp.
The two companies started proceedings in a trial in federal court in San Diego on Monday, which was expected to last until May. Both sides were asking for billions in damages. The anti-trust case was originally filed by Apple in early 2017.
The complicated legal battle, centered around modem chips and related disputes, has been raging in courts around the world for the past two years, including an earlier trial between Qualcomm and the U.S. Federal Trade Commission.
For years, Apple bought modem chips from Qualcomm, but it bristled under Qualcomm’s prices and requirement that any company using its chips would also pay licensing fees for its patents.
The new license between the two companies is six years, with a two-year option to extend, and includes a one-time payment from Apple to Qualcomm.
