Qualcomm (QCOM.US) and Apple Inc. (AAPL.US) renew global licensing agreement, effective April 2027

Qualcomm (QCOM.US) said on Thursday it has renewed its global licensing agreement with Apple Inc. (AAPL.US), with the new agreement set to officially take effect on April 1, 2027, meaning the iPhone maker will remain a core customer of Qualcomm in the near term. "We are pleased to extend our licensing agreement with Apple Inc.," said John Han, Qualcomm's executive vice president in charge of licensing. The statement announcing the renewal on Thursday did not include the duration of the new agreement. Following the announcement, shares of Qualcomm and Apple Inc. were roughly flat in Thursday's U.S. pre-market trading session. It is understood that as the world's largest smartphone processor manufacturer, Qualcomm's patent licensing revenue is calculated based on handset makers' shipment volumes. According to compiled data, Apple Inc. is Qualcomm's largest customer, contributing more than one-fifth of its revenue. The two companies had been engaged in a protracted legal dispute over billions of dollars in patent fees, and reached a licensing agreement in 2019. Currently, affected by the downturn in the smartphone market, Qualcomm is facing operating pressure that exceeds expectations. The company outsources chip production and said it is passing on some cost increases to customers. The company said this will help margins recover over time. A memory chip shortage driven by surging demand for artificial intelligence (AI) computing equipment has forced Qualcomm customers, including Apple Inc., to reduce handset production.