Apple Inc. (NASDAQ:AAPL) and mobile chip maker Qualcomm have settled a bitter financial dispute

Apple Inc. (NASDAQ:AAPL) and mobile chip maker Qualcomm have settled a bitter financial dispute

Apple Inc. (NASDAQ:AAPL) and mobile chip maker Qualcomm have settled a bitter financial dispute

Apple and mobile chip maker Qualcomm have settled a bitter financial dispute centered on some of the technology that enables iPhones to connect to the internet. News of the surprise truce Tuesday sent Qualcomm stock soaring more than 23 percent, to nearly $70.50 a share.

The settlement came just as the former smartphone allies turned antagonists were facing off in a federal court trial that was supposed to unfold over the next month in San Diego. The resolution abruptly ended that trial, which also involved Apple’s key iPhone suppliers.

Apple had been seeking at least $1 billion while Qualcomm was seeking $7 billion for unpaid royalties it contended it was owed for its patented technology in the iPhone. Apple’s key iPhone suppliers wanted another $27 billion from Qualcomm.

The deal requires Apple to pay Qualcomm an undisclosed amount. It also includes a six-year licensing agreement that likely involves recurring payments to the mobile chip maker.

Wall Street clearly thought the settlement was a boost for the wireless industry. “I believe both Apple and Qualcomm got deeper into this than they wanted to — Apple was challenging Qualcomm’s most profitable business model, licensing, and Qualcomm was accusing Apple of IP theft and lack of payment,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strrategy. “This settlement should be good for the wireless industry as companies should feel free to invest in research, get paid a fair price for those inventions, and consumers take advantage of those innovations at a very rapid pace.”

Apple’s stock price closed Tuesday largely unchanged, up just 0.01 percent to $199.25 a share.

Neither Apple nor Qualcomm would comment beyond a brief statement announcing they had resolved their differences. Details about how much Apple and its iPhone suppliers will be paying Qualcomm could emerge in court documents or when the companies announce their latest financial results. Apple is due to report its quarterly results on April 30 while Qualcomm is scheduled to release its numbers on May 1.

Apple had been seeking at least $1 billion for money that Qualcomm was supposed to rebate as part of an earlier licensing agreement. Apple had begun to have misgivings about that deal as it added more features to its increasingly popular line-up of iPhones.

Qualcomm was seeking $7 billion for unpaid royalties it contended it was owed for its patented technology in the iPhone. Apple’s iPhone suppliers, including Foxconn and Pegatron, wanted another $27 billion from Qualcomm.

Apple had already lost an earlier battle with Qualcomm last month when a federal court jury in San Diego decided the iPhone maker owed Qualcomm $31 million for infringing on three of its patents.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 205.70.

The projected lower bound is: 193.92.

The projected closing price is: 199.81.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 47.2884. This is not an overbought or oversold reading. The last signal was a sell 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 70.86. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 16 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 71. This is not a topping or bottoming area. The last signal was a sell 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

APPLE INC closed up 0.020 at 199.250. Volume was 24% below average (neutral) and Bollinger Bands were 23% narrower than normal.

Open High Low Close Volume___
199.460 201.370 198.560 199.250 25,696,384

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 198.46 182.88 191.22
Volatility: 12 20 38
Volume: 23,615,246 26,922,772 33,421,304

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

APPLE INC is currently 4.2% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 56 periods. Our momentum oscillator is currently indicating that AAPL.O is currently in an overbought condition.


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