In a surprise move Apple and integrated circuit vendor Qualcomm have announced that they will discontinue all ongoing litigation worldwide, after the start of what looked set to become a long and complex court case over patent licensing.
The two tech giants issued a short statement saying they had reached a settlement that includes an undisclosed amount as payment from Apple to Qualcomm to license the latter company's patents.
Qualcomm had demanded Apple pay US$13 per iPhone in licensing fees.
The licensing agreement runs for six-year with a two-year option to extend. A multi-year chipset supply agreement is also part of the settlement.
Earlier the same day, Apple had fired the first legal shots in a San Diego courtroom, accusing Qualcomm of abusing its market power.
Apple alleged that Qualcomm engaged in illegal monopolistic patent licensing practices for its premium cellular modem chips for smartphones.
Qualcomm insists on customers signing a patent licensing agreement before it will sell modem chips, a practice Apple objected to.
Apple had tried to bypass Qualcomm by using modems from Intel in its iPhones and iPads.
Intel has not been able to supply as advanced parts as those made by Qualcomm however and Apple was rumoured to be in talks with Huawei to use the Chinese company's Balong chipset.
In February this year, Intel advised Apple that it would not have 5G modems until 2020. That delay would have left Apple without a 5G capable iPhone at a time when competitors are launching devices that can utilise the next-generation cellular broadband standard.