Arm Holdings Withdraws Qualcomm Complaint

During its financial earnings conference call today, Qualcomm said that Arm Holdings had withdrawn the licensing breach complaint that triggered last year’s legal standoff. It also told Qualcomm that it no longer plans to terminate Qualcomm’s license agreement.

Qualcomm announced earlier that it earned a net income of $3.2 billion on revenues of $11.7 billion in the quarter ending December 29, 2024. But the company expanded on that information in its post-earnings conference call.

Qualcomm was previously involved in a serious legal battle with Arm Holdings, which alleged that Qualcomm owed significantly higher licensing fees for its chip designs. But Qualcomm won handily in court, and as I later wrote, the Arm complaint was, at best, superficial.

“The jury’s verdict vindicated Qualcomm’s CPU innovations and affirmed that Qualcomm’s contract with ARM provides a license for Qualcomm’s products containing our proprietary Oryon CPUs in industries such as smartphones, automotive, next generation PCs, IoT, and datacenter,” Qualcomm CEO Cristiano Amon said during the call. The company also reported today that Arm Holdings notified it that it was withdrawing its October 22, 2024 notice of breach. Arm further indicated that it has no current plan to terminate the Qualcomm Architecture License Agreement.

Arm Holdings previously indicated it would seek a retrial, though the judge overseeing the case told the firm it would need to meet a high bar before she would allow the company to do so. With this change, however, it appears that Arm has seen the light and will instead work with its biggest customer.

The company also addressed sales of its Snapdragon X family of chips that power Copilot+ PCs. It said that there are now over 80 PC designs in production or development from companies such as Acer, Asus, Dell, HP, Lenovo, and Microsoft. And that it’s targeting the commercialization of over 100 Snapdragon X-based PC designs through 2026.

“While we are still in the early phase of the transition to Copilot+ PCs, we are pleased with consumer reception for our Snapdragon X series, which has exceeded our expectations,” Mr. Amon said. “According to Circana, in December, Snapdragon X series had more than 10 percent share of the greater than $800 Windows laptops in U.S. retail … The broader app ecosystem continues to expand, with Snapdragon-native apps now including 20 of the most popular VPNs, 50 of the most popular security and cloud storage apps as well as new applications for creators.”

Qualcomm said later in the call that its Snapdragon X market share is on track with its expectations.