Qualcomm: Apple won't use our chips in the next iPhone

Can shares of tech giants keep climbing?
Can shares of tech giants keep climbing?

Qualcomm says it expects Apple won't put its modem chips in the next generation of iPhones.

It had been rumored that Apple (AAPL) would only include Intel (INTC) modems in its new phones, which usually debut in the fall.

"We believe Apple intends to solely use our competitor's modems rather than our modems in its next iPhone release," CFO George Davis said on a conference call with analysts Wednesday. "We will continue to provide modems for Apple legacy devices."

Qualcomm (QCOM) makes most of its money licensing smartphone radios and chips, and Apple is one of its biggest customers. But the two companies have been locked in a fight over royalty payments since 2017.

Apple did not immediately respond to a request for comment. Intel declined to comment.

Qualcomm also reiterated Wednesday that it plans to walk away from its $44 billion acquisition of the Netherlands' NXP Semiconductors unless there are "new material developments" before 11:59 p.m. ET.

The company said it will pursue a stock buyback of up to $30 billion instead. The news, along with a healthy quarter, boosted Qualcomm shares roughly 6% after hours.

"We just need to provide certainty, not only to our partners and shareholders, but also to the employees as to where we're going," CEO Steve Mollenkopf said of the decision to abandon the merger.

Related: Do trade wars hurt business? Ask Qualcomm

The NXP deal, first announced more than 20 months ago, has been held up by the Chinese government for months amid the trade fight with the United States.

If it doesn't go through, Qualcomm will owe NXP a $2 billion termination fee.

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