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Apple and Qualcomm have reached a surprise deal to end their legal battle earlier this week. The transaction included a one-time payment from Apple to Qualcomm, although neither company is willing to disclose the value of the payment. Analysts are now trying to gauge the details of the deal.
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In a note to investors today, obtained by CNBCTimothy Arcuri, an analyst at UBS, said it was likely that Apple will pay between $ 5 billion and $ 6 billion under the settlement. Apple and its suppliers were holding down Qualcomm royalties, which are likely to be worth more than $ 7 billion, according to reports.
If the UBS estimate is close to accuracy, it is unclear how this figure compares to what Apple had concealed from Qualcomm during the testing period. Apple and its suppliers both paid royalties to the chip maker, and the most recent estimates estimate the deduction at around $ 7.5 billion.
In addition, UBS estimates that Apple will pay Qualcomm between $ 8 and $ 9 in patent royalties by iPhone. UBS bases this estimate on Qualcomm's earnings review, which included a $ 2 increase in earnings per share.
Apple was paying $ 7.50 to Qualcomm by selling iPhone, which represents a significant increase for Qualcomm in terms of royalties.
With an agreement like this, there are many nuances that make it difficult to determine who exactly is the "winner". For example, the fee of $ 8 to $ 9 might not tell the whole story. In addition, thanks to this agreement, Apple has access to 5G modems for iPhone, which represents a considerable advantage from his point of view.
We may see the effects of this transaction in Apple's quarterly results at some point. If this is the case, we should be able to know more about the one-time payment made by Apple to Qualcomm.
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