24/7 Wall St.

Shares of chipmaker Qualcomm Inc. (NASDAQ: QCOM) have jumped more than 22% Tuesday afternoon following an announcement that the company has settled its long-running multi-billion litigation with Apple Inc. (NASDAQ: AAPL). While the financial details were not divulged, the settlement includes a payment by Apple to Qualcomm and a new six-year license agreement that became effective April 1 of this year. The six-year deal includes a two-year extension option and a “multiyear” chipset supply agreement.

A single slide posted at the Qualcomm website notes that Apple will pay royalties and make a one-time payment of unspecified size to Qualcomm. The two companies will drop and withdraw all litigation worldwide, including claims against Apple’s contract manufacturers. The driver of Qualcomm’s share price boost, however, was a single line: “Expect Incremental EPS of ~$2.00 as product shipments ramp.”

The company did not say, but the boost is likely a projection the full fiscal year. Qualcomm said it would provide further details on during its conference call on May 1.

It could be that Qualcomm had Apple over a barrel with its 5G modem. Apple has been struggling to find a source of supply for the new modem which Qualcomm has been supplying in quantity to Android-based phonemakers including Apple nemesis Samsung. Apple could not simply let the 5G surge that is coming get away from the company. As it is, the 5G modem may not make it into Apple’s fall lineup.

That’s not the worst technological thing that could happen, but it would be a public relations screw-up of the worst kind. One thing Apple can’t do without is its high margins based on its high-quality reputation as a technological innovator. Running as fast as it can just to catch up next year is not the look Apple wants consumers to see.

About 30 minutes to the closing bell, Qualcomm stock is up 22% at $69.87 in a 52-week range of $48.56 to $76.50.

Apple stock traded up less than 0.1% at $199.61 in a 52-week range of $142.00 and $233.47.