Apple reportedly paid Qualcomm up to $ 6 billion to sign deal, says analyst

Apple reportedly paid Qualcomm up to $ 6 billion to sign deal, says analyst

The details of the already historic agreement between Apple and the Qualcomm are, so far, unknown: we don’t even know which of the two companies came out «on top» in the agreement. Everything indicates, however, that it was the microchip giant that had the advantage – just see this estimate by the analyst Timothy Arcuri, from UBS.

According to a note by Arcuri obtained by CNBC, Apple would have paid between $ 5 and $ 6 billion to Qualcomm to end all disputes between the two companies – a clear sign that Apple felt that its imbroglio narrative was eroding and that the balance would likely tip over to the rival’s side in court decisions.

The analyst’s estimates are based on updating Qualcomm’s forecasts for its next financial results: the company has announced that it now expects a $ 2 per share increase at the close of the quarter.

In Arcuri’s forecast, the deal also brought an extra benefit to the microchip giant: going forward, Apple will pay between $ 8 and $ 9 Qualcomm for each iPhone sold – a significant increase from the $ 7.50 previously set and a good increase from the $ 5 per device that was provided for under this agreement.

Apple back in the game

The above paragraphs may imply that Apple lost strongly in reconciliation – and, from a purely financial point of view, Apple really must have suffered a considerable shake in the piggy bank. A report recently published by Bloomberghowever, it brings another perspective to the whole story.

According to the report, Apple would be at least five years ago of Qualcomm in the development of 5G modems – that is, considering Intel’s exit from the market and Apple’s improbability to enter into agreements with other suppliers, the Cupertino giant could spend half a decade breaking its head trying to build its own chip, while the entire competition would already be putting 5G smartphones on the market.

The point is that the modem, as the article reports, is one of the most complex parts to develop within a smartphone: it is necessary to take into account an infinity of frequencies and communication patterns from hundreds of countries, bring support to communication standards (such as 3G and 4G) and, above all, to build solutions that do not put excessive demands on the battery of devices or their processors. It’s not a cookie.

Qualcomm has an extreme advantage in this because it already has the necessary expertise and facilities required for the related tests; the company is also ahead because it has been working on the development of 5G technology for years – unlike Apple, which is still in its infancy in this world.

With the agreement between the rivals, therefore, Apple returns to the game and is in a more comfortable position: Tim Cook and his gang may have spent a note to appease Qualcomm’s spirits, but the amount can be easily recovered by putting iPhones 5G on the market ahead of expectations and attracting consumers who would otherwise be able to migrate to the Android side. It was a necessary move, after all.

via MacRumors, 9to5Mac