Qualcomm Extends Long-Term Patent Agreement With Apple, Securing QTL Revenue in Era of In-House iPhone Modems

TradingKey - On Thursday, September 24 ET, Qualcomm (QCOM) announced that it has renewed a global patent licensing agreement with Apple (AAPL), with the new agreement set to take effect on April 1, 2027. Qualcomm did not disclose the specific duration, licensing fees, or other financial terms of the agreement. Following the announcement, Qualcomm's stock rose about 1% in US pre-market trading.

This renewal extends the patent licensing relationship between the two companies that dates back to 2019. That year, Qualcomm and Apple ended years of global patent litigation and signed a six-year global license agreement that included a two-year extension option. Apple later exercised the extension option, extending the current agreement through the end of March 2027, with the new agreement taking effect seamlessly the following day.

The agreement primarily involves wireless communication patents owned by Qualcomm, which is a separate business from supplying 5G modem chips to Apple. Qualcomm holds a vast patent portfolio covering 3G, 4G, 5G, and related wireless technologies, and has signed more than 200 5G license agreements to date. Even as Apple increasingly adopts its in-house modem chips, it must still pay licensing fees to patent holders for the relevant cellular communication technology used in its devices.

This is particularly noteworthy as Apple accelerates replacing Qualcomm chips with its in-house modems. In recent years, Apple has introduced its in-house C-series modems in select iPhone and iPad models and continues to expand their adoption. The latest teardowns show that the US version of the iPhone 18 Pro Max still uses Qualcomm's Snapdragon X80 modem, but several other iPhone 18 series models have already switched to Apple's C2 chip.

Qualcomm previously expected revenue from chip sales to Apple to decline as Apple's in-house modems gain wider adoption. However, its patent licensing business (QTL) operates independently from chip supply. Therefore, this long-term renewal means that even if Apple further reduces its purchases of Qualcomm modems in the future, Qualcomm can still continue to generate patent licensing revenue from Apple device sales.