Qualcomm announced Monday that it has signed a new deal with Apple to supply 5G chips to the iPhone maker, extending the partnership until at least 2026. The San Diego, California-based company saw a 5% increase in its shares in the early stages of trading, and is the main designer of so-called modem chips, responsible for connecting phones to mobile data networks. Previously, the company had entered into a supply agreement with Apple in 2019, after a long legal battle between the two companies. This chip supply deal now comes to an end, meaning the iPhones Apple plans to announce on Tuesday will represent the last generation of phones based on that deal.
Under the deal announced Monday, Qualcomm pledges to supply Apple with the chips needed for phones launching every year through 2026. The value of the deal was not disclosed, with Qualcomm merely saying the terms are “similar ” to those of the previous agreement. Furthermore, Qualcomm clarified that the patent licensing agreement signed with Apple in 2019 will remain in force. This agreement will expire in 2025, but the two companies will have the possibility to extend it for a further two years. It should be noted that Apple is working on its own modem technology, having spent $1 billion to acquire Intel’s modem unit in 2019. However, Apple has not yet spelled out a timeline for the widespread adoption of its chips.
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