Correction - Updated Version 2 - Qualcomm granted extension of global patent licensing agreement with Apple

Correction to the headline: it should be "patent licensing" agreement, not "chip licensing"; this error also appeared in previous versions of this report.

Reuters, September 24 - Qualcomm (QCOM.O) said on Thursday that Apple (AAPL.O) has extended its patent licensing agreement with the chip designer, even as the iPhone maker seeks to reduce its reliance on Qualcomm modem chips.

The semiconductor company did not disclose the timeline of this latest move. The current agreement is set to expire on March 31, 2027, with an option to extend for two years. Neither Apple nor Qualcomm responded to requests for comment.

Although the agreement keeps Apple bound to portions of Qualcomm’s patent portfolio, the chip designer said in July that revenue from Apple products would (link) decline faster than expected.

In the quarter ending in June, Qualcomm’s patent licensing business accounted for about 15% of total revenue. The company has said it is counting on growth in its data center business to offset revenue losses after the reduction of Apple business in 2027.

In 2023, Qualcomm and Apple signed an agreement (link) to supply at least 5G chips through 2026. At that time, the iPhone maker was facing increasing challenges in China and sought to strengthen its supply chain in other regions.

This cooperation stems from a 2019 settlement agreement that ended a two-year global legal dispute between the two parties over wireless patent royalties and modem chip supplies. In April 2019, just before a US jury trial in San Diego was set to begin, the two companies announced the settlement.

Under the settlement, Apple paid Qualcomm an undisclosed sum, both parties withdrew litigation globally, and agreed to a six-year global patent licensing agreement effective from April 1, 2019.

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