26/09/2026
Apple and Qualcomm's commercial relationship is entering a new phase: chip supply is gradually receding while patent licensing continues. On September 24 local time, Qualcomm issued a statement on its website announcing the renewal of its global patent license agreement with Apple, with the new agreement taking effect on April 1, 2027. Qualcomm did not disclose the term, royalty rates, or other financial terms of the new agreement.
The notably brief statement stands in sharp contrast to the information-rich announcement the two companies made when they settled their disputes in 2019. At that time, Qualcomm and Apple ended two years of global patent litigation, with Apple making a one-time payment to Qualcomm. The parties signed a six-year global patent license agreement effective April 1, 2019 (with a two-year extension option), along with a separate multi-year chip supply agreement.
John Han, senior vice president and general manager of Qualcomm's technology licensing division, said in the latest statement: "We are pleased to continue our patent license agreement with Apple." Beyond that, Qualcomm offered no further details.
Chips and Patents: Two Cooperation Tracks Diverge
The key to understanding this renewal lies in distinguishing between the two types of cooperation between Qualcomm and Apple: chip supply and patent licensing.
In September 2023, Qualcomm announced an agreement with Apple to supply Snapdragon 5G modem-RF systems for smartphones launched in 2024, 2025, and 2026. This renewal, however, covers only the global patent license agreement, with no mention whatsoever of extending chip supply arrangements.
The logic behind this is not difficult to grasp. After Apple acquired Intel's smartphone baseband chip division for $1 billion in July 2019, its pace of in-house baseband development accelerated markedly. The acquisition brought Apple 2,200 employees and 17,000 wireless technology patents covering areas such as cellular standard protocols, modem architecture, and modem operations.
Since then, Apple's in-house baseband product line has advanced in a step-by-step progression: the entry-level iPhone 16e launched in February 2025 featured the first-generation cellular modem C1; in September of the same year, the upgraded C1X was used in the iPhone Air and iPhone 17e; and the newly released iPhone 18 Pro and foldable iPhone Duo are equipped with the next-generation C2 system. The C2 reportedly offers faster upload speeds, consumes 15% less power than the C1X, and supports millimeter-wave technology in the United States.
However, for its core flagship models, Apple still chooses to entrust baseband chip supply to Qualcomm. This means Apple's dependence on Qualcomm hardware is shrinking, but has not yet been fully severed.
The Barrier to Entry in Baseband Chips: Patent Accumulation
Why must Apple still renew its patent agreement with Qualcomm even after making clear progress on in-house baseband development? The answer lies in the complexity of communications patents.
The difficulty of baseband chips lies not in chip design itself, but in compatibility with five generations of past communications technology standards. In the 3G era alone, there were three standards: WCDMA, CDMA2000, and TD-SCDMA. Cumulatively, a 5G baseband chip maker must be compatible with roughly 10 past technology standards and complete testing and certification across more than 100 commercial networks worldwide. These patent accumulations and validation results—spanning nearly five decades and five generations of communications technology—are something no company can easily circumvent in the short term.
Paolo Pescatore, chief analyst at PP Foresight, said the agreement "demonstrates the enduring value of Qualcomm's vast patent portfolio." He noted that Apple has been steadily reducing its dependence on Qualcomm hardware through its in-house modem development, yet still needs continued access to Qualcomm's core wireless communications intellectual property.
Pescatore also emphasized that this renewal should not be interpreted as a retreat by Apple on in-house baseband development. "Obtaining a Qualcomm patent license and buying Qualcomm chips are two completely different things."
Qualcomm's Revenue Transition Pressure
For Qualcomm, the impact of Apple reducing chip purchases has long been fully anticipated by the capital markets. At the company's fiscal Q3 2026 earnings call in July, Qualcomm CFO and COO Akash Palkhiwala said that, due to supply constraints, the decline in product revenue from Apple would accelerate starting in the fiscal fourth quarter.
Specifically, Qualcomm expects chip segment revenue of $8.4 billion to $9 billion in the next fiscal quarter, with handset revenue of approximately $5.2 billion. Sequential growth in the Android business will substantially offset roughly 50% of the revenue reduction from the Apple business, while the data center business is expected to begin ramping in the first fiscal quarter of next year.
Qualcomm's overall patent licensing business accounted for approximately 15% of total revenue in the quarter ending in June. Despite pressure on chip revenue from reduced Apple purchases, the patent licensing segment continues to contribute stable cash flow for Qualcomm.
Market Reaction and Analyst Skepticism
Following the announcement, the capital markets' reaction was muted. Qualcomm shares fell 1.51% on Thursday local time to close at $194.26 per share; Apple closed down 0.33% at $335.92 per share. Bernstein analyst Stacy Rasgon noted that when Qualcomm announced the 2019 agreement, it explicitly disclosed the six-year term and extension provisions, whereas this statement was notably lacking in detail—leaving him "somewhat skeptical" about how long the new agreement would provide licensing revenue security for Qualcomm.
Rasgon said market participants may need to seek greater clarity at Qualcomm's upcoming quarterly earnings call. Despite these uncertainties, Qualcomm shares are still up approximately 13% year-to-date, partly due to its positioning in emerging areas such as AI chips, robotics, and data centers.
Implications for Chinese Smartphone Makers
Another noteworthy dimension of this agreement is its reference value for the global communications patent licensing landscape.
In Qualcomm's 2022 patent license renewal with Samsung, the agreement explicitly extended licensing of 3G, 4G, 5G, and future 6G mobile technology patents through the end of 2030, while also expanding Snapdragon platform cooperation. Whether the new agreement with Apple covers 6G is not publicly known at this time. If the new agreement's term is comparable to the previous six-year period, then starting from April 1, 2027, it would extend to around 2030—the widely expected timeframe for 6G commercialization.
For Chinese smartphone makers accelerating in-house chip development and overseas market expansion, the signal from this case is clear: in-house chips can reduce dependence on external chip suppliers, but cannot eliminate the intellectual property costs behind communications standards. As long as phones continue to adopt 3G, 4G, 5G, and other communications standards, they will still need to confront licensing of the relevant standard-essential patents.
Qualcomm has cumulatively invested more than $110 billion in R&D since its founding, and has consistently invested nearly 20% of annual revenue in R&D every year since 2006. This high-margin business model centered on patent licensing constitutes a unique competitive moat that distinguishes Qualcomm from most chip companies. For Chinese smartphone makers going global, how to secure reasonable royalty rates in patent negotiations with Qualcomm will be a long-term challenge beyond the chip supply chain itself.
This renewal between Apple and Qualcomm appears on the surface to be a commercial arrangement between two American companies, but in reality it affects the licensing landscape of the entire mobile communications industry. Chips can be developed in-house, but patent accumulation spanning five generations of communications technology remains a barrier that cannot be bypassed.
https://finance.biggo.com/news/00ba7261-1d03-44fb-8a85-3f23f90a0676
Big Go Finance - 2026-09-26