Qualcomm shares soar on surprise settlement with Apple of long legal dispute

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(Reuters) – Qualcomm Inc on Tuesday won a major victory with a surprise settlement of its wide-ranging legal dispute with Apple Inc that includes a supply agreement paving the way for the iPhone to once again use Qualcomm modem chips including potentially for new 5G capability.

The settlement also includes a six-year patent license and a payment from Apple to Qualcomm, but the companies did not disclose the amount.

“This is a big win” for Qualcomm, said Christopher Rolland, an analyst at Susquehanna Financial Group. Shares of Qualcomm jumped 23 percent to $70.45, their biggest gain in more than 19 years.

As their conflict intensified, Apple had relied exclusively on Intel Corp chips since last year. Apple stock rose marginally, gaining two cents to $199.25. Shares of Intel, Qualcomm’s main competitor for supplying modem chips to Apple, rose 43 cents to $56.71.

The settlement followed two years of increasingly bitter legal conflict between the two companies and came as a opening arguments took place at a trial in federal court in San Diego.

The deal restores Qualcomm to Apple’s stable of suppliers and could help it return to the preeminent position it held in the early 2010s. Qualcomm dominated the