Qualcomm and Apple have long been embroiled in a patent lawsuit — each tech company suing the other in a high-priced back-and-forth.
Broadcom ‘s $103 billion bid for rival chipmaker Qualcomm could ease a lengthy war with Apple, analysts said Monday.
Qualcomm and Apple long been embroiled in a patent lawsuit — each tech company suing the other in a high-priced back-and-forth. Apple alleges fraudulent royalty charges, and Qualcomm alleges patent infringement.
« While Qualcomm is pursuing the dispute in the courts in an effort to maximize the value of its IP, an acquirer wouldn’t need to maximize value — an acquirer would only need to settle for a rate that would provide a positive ROI, » Chris Caso of Raymond James Equity Research said in a note.
Apple CEO Tim Cook last week commented on the ongoing battle and reiterated the company’s stance on Qualcomm’s alleged wrongdoing.
« If you back up and look at this, what is happening is that [Korea’s Fair Trade Commission] has found Qualcomm guilty and fined them in the past few weeks, » Cook told CNBC’s Josh Lipton . « The Taiwan justice department has found Qualcomm guilty and fined them. The U. S. FTC sued them and has a suit going on. The EU is investigating them. And so I think it’s pretty clear that there are problems there. »
Broadcomm, for its part, has a pretty cordial relationship with Apple, as one of the smartphone giant’s main component suppliers.
« Broadcom and Apple have a much more cohesive partnership, in contrast to the hostility and lawsuits you have between Qualcomm and Apple, » RBC Capital Markets’ Amit Daryanani told CNBC’s » Squawk Alley » Monday. « So Broadcom may logically think, and we think it’s fair, that they could resolve these regulatory litigation issues more easily than Qualcomm is doing right now. »
The soothing effect could extend to the industry at large, according to Anil Doradla of William Blair & Co.
« This could mark a new benign environment, » Doradla told CNBC in the same interview. « Some of these litigation issues have been resolved, [but] they are still a thorn for many. »
