Jim Cramer: Qualcomm's Ending its Dispute With Apple

Credit: The Street
Published on April 17, 2019 - Duration: 00:32s

Jim Cramer: Qualcomm's Ending its Dispute With Apple

Qualcomm ended its long-running dispute with Apple over royalty payments for Qualcomm's smartphone equipment.

Qualcomm shares jumped 23.2% on Tuesday after the settlement was announced.

The settlement ends all litigation between the two companies and includes an unspecified payment from Apple to Qualcomm, according to a press release issued by Apple following the settlement.

As part of the settlement, Apple and Qualcomm also reached a six-year license agreement, effective as of April 1, including a two-year option to extend, and a "multiyear chipset supply agreement." That could mean that Apple is returning to using Qualcomm as its supplier for modem chips after switching to Intel when the dispute with Qualcomm began.

Intel announced Tuesday that it was dropping out of the 5G modem business, just hours after Qualcomm and Apple announced their settlement.

Qualcomm said that the deal with Apple will add about $2 in "incremental EPS" as its chip shipments ramp up.

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