UBS: Apple and Huawei paid Qualcomm $6.4 billion in royalties in arrears

Analyst Timothy Arcuri estimates the terms of Tuesday’s settlement.

From a note to clients that landed in my desktop Wednesday:

While very limited terms were disclosed, QCOM’s indication of ~$2/share in incremental EPS… suggests to us that AAPL settled for something in the range of $8-$9/phone royalty rate—a solid outcome for QCOM and certainly better than the ~$5 assumption we had been making.

This additionally does not include what seems to be a likely resumption of full royalty payments from Huawei as well as bullet payments from both AAPL (~$5-$6B) and Huawei (~$1.5B) for royalties in arrears.

Cue the spreadsheets:

UBS apple qualcomm huawei

Click to enlarge.

My take: Apple caved.

See also: Apple-Qualcomm settlement: What the influencers are saying


  1. Fred Stein said:
    At $9 to $10 per phone, Apple pays about 1.5%, or 70% less than what Qualcomm asked, 5% of customer price.

    April 19, 2019
  2. Jerry W Doyle said:
    I suspect Qualcomm’s Steven Mollenkopf is basking in the afterglow from events this past week. With this in mind, let us turn the rear-view wisdom of Spanish philosopher George Santayana on its head by saying, “… Those who truly can see all possible futures have the best chance of choosing the winning one and avoiding the worst.”

    Something tells me that Tim Cook pursued the wisdom of Santayana.

    April 19, 2019
    • Alan Birnbaum said:
      Wonderful quote ! Another one of his is “ Those who cannot remember the past are condemned to repeat it“!

      Also, very true in this case.

      April 19, 2019
  3. Mark Visnic said:
    Aaron Rakers, who is not an Apple bull, estimated a payment of less than half the number Acuri estimated. The numbers will be clearer later. It was a good strategic move by Apple that also will become clearer.

    April 19, 2019
  4. Michael Thompson said:
    The net effect is that Apple likely received the $1 billion or more in royalties that QCOM failed to pay and Apple paid the monies that it accounted for and had its suppliers account for.

    As usual, Apple wins.

    April 20, 2019

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