DealBook Briefing: Apple and Qualcomm Kiss and Make Up

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After two years of bitter patent battles across three continents, Apple and the chip maker Qualcomm have settled all of their disputes, Don Clark and Daisuke Wakabayashi of the NYT report.

• The companies “agreed to dismiss all litigation between them worldwide. They added that they had reached a six-year agreement for Apple to pay unspecified royalties on Qualcomm’s patents.”

• “That deal, which was effective as of April 1, included a two-year option for an extension, plus a multiyear agreement for Qualcomm to supply chips to Apple. In addition, Apple will make an undisclosed one-time payment to Qualcomm.”

Hours later, Intel said it would stop selling smartphone modem chips — including 5G models that Apple had been expected to use next year — citing “no clear path to profitability.” Nikkei Asian Review reports, citing unnamed sources, that Apple had been concerned about relying solely on Intel for its 5G chips.

And Qualcomm’s shares jumped 23 percent after it said it expected $2 per share in additional revenue from the settlement.

“I’m floored,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, a technology analysis firm. “Qualcomm got the bigger win because it had the most to lose and the most to gain. And it ended today.”

“How much the deal might affect people’s phone prices will not be clear until more financial details of the settlement are disclosed. But the effect on the price of individual handsets is not likely to be large,” Mr. Clark and Mr. Wakabayashi write.

More 5G news: Nokia wants to take on Huawei on next-generation wireless infrastructure. And Huawei said that it has no 5G contracts from mainland China.

Shares in Sprint tumbled over 7 percent yesterday after the WSJ reported that Justice Department staffers had concerns about its proposed sale to T-Mobile USA.

Justice Department officials met with both carriers earlier this month to discuss the merger, according to news reports. They showed some skepticism about the structure of the transaction.

But one man will decide whether to block the deal. That’s Makan Delrahim, the head of the Justice Department’s antitrust division — and it isn’t clear which way he is leaning.

T-Mobile’s C.E.O., John Legere, is pushing back. He tweeted that the WSJ’s description of the meeting, which had Justice Department staffers saying the deal was “unlikely to be approved as currently structured,” was “simply untrue.”

The companies still have about a month of regulatory reviews to wait out. And they could still make changes to the transaction to win over Washington officials.

More: The White House is refusing House Democrats’ request for any documents about President Trump and the Justice Department review of AT&T’s takeover of Time Warner.

CreditMark Lennihan/Associated Press

The business of multibillion-dollar deals and complex derivative trades wasn’t Wall Street’s cash cow in the first quarter. That honor fell to bank branches, consumer apps and credit cards, Robert Armstrong of the FT reports.

• “Over the past 12 months, shares in Morgan Stanley, which has no retail unit, and Goldman Sachs, which has only a tiny one, are the worst performing among the six big U.S. banks, having fallen 11 percent and 21 percent, respectively.”

• “Conversely, JPMorgan and BofA, with the strongest retail units, trade at the widest premiums to tangible book value in the group.”

• “ ‘Corporate and investment banking is not a source of growth, and asset management is not [either]. All the growth is coming from the retail banks,’ said Charles Peabody of Portales Partners.”

• The big question, Mr. Armstrong writes, is how long this will last. Banks have kept deposit rates low even as the Fed’s rates have risen. But the difference between shorter-term and longer-term interest rates is narrowing, threatening that income.

In the wake of two fatal crashes, two influential shareholder advisory firms have recommended big changes to Boeing’s board of directors, including a partial demotion for Dennis Muilenberg, the C.E.O.

Mr. Muilenberg should lose his role as chairman, I.S.S. and Glass Lewis said. The two proxy advisory firms, who hold sway over many institutional investors, often recommend having an independent chairman.

Separating the roles “eliminates the conflict of interest that inevitably occurs when a C.E.O. is responsible for self-oversight,” Glass Lewis wrote in its report to investors, according to the WSJ.

Also under pressure: the head of Boeing’s audit committee, Lawrence Kellner. Glass Lewis want him removed for failing to foresee safety risks on the 737 Max planes.

Boeing defended its current board and said it should decide its own leadership structure. “The board is not aware of clear evidence demonstrating that splitting the C.E.O. and chairman roles is good for all companies in all circumstances,” the company said in its proxy filing.

CreditIllustration by Minh Uong; Photograph by Peter Prato for The New York Times

Ads that ran alongside anti-vaccine content. Accusations of abetting child suicide. Viral content that showed pedophiles were flourishing in comments sections. YouTube has had a rough time recently. Daisuke Wakabayashi of the NYT looks at how its C.E.O., Susan Wojcicki, is coping.

• “In an industry that celebrates eccentricity, Ms. Wojcicki presents as exceedingly normal, bordering on boring, even as elements of her digital realm burst into the real world in forms that are increasingly grotesque and sometimes dangerous.”

• “Political figures and tech luminaries alike are castigating YouTube for not doing enough to rein in the crooks, crackpots, racists, Russian agents and charlatans who call the platform home. New horrors are ceaseless.”

• Now, “YouTube wants to remove the content that violates its policies more quickly and effectively; promote better, more authoritative material and limit the spread of videos that are potentially harmful but does not break the rules.”

• “I know we can do better, but we’re going to get there,” she said in an interview. “I own this problem, and I’m going to fix it.”

• Ms. Wojcicki is unlikely to be unseated anytime soon. While she technically reports to Sundar Pichai, Google’s C.E.O., she is one of the few people at the tech giant with “walk-in access” to Larry Page, Alphabet’s reclusive co-founder and C.E.O. “She is not going anywhere,” one Google executive told Mr. Wakabayashi.

The Chinese economy steadied itself in the first three months of the year, after Beijing flooded the financial system with money to avoid a slowdown, Alexandra Stevenson of the NYT reports.

The world’s second largest economy was 6.4 percent bigger in the first quarter than in the same period of 2018, Ms. Stevenson reports, citing figures provided by Chinese officials. “The pace matched that of the fourth quarter, when growth suffered as shoppers pared back, the stock market slumped and private businesses pleaded for help.”

“While economists generally regard China’s economic figures with skepticism, they point to other signs that the country’s current slowdown may have reached bottom. Other figures suggest shoppers are back at the tills, factory output is ticking up and the world, after several tough months, is buying more Chinese goods.”

“Beijing needs such hopeful signs as it tries to reach a trade deal with the Trump administration while under pressure to lift conditions at home.”

But there’s a caveat. The improvement probably has more to do with all that stimulus cash than with any sudden increase in business confidence. And it’s unclear how long the cash can keep flowing.

More: As unlikely as it sounds, some business leaders and intellectuals in China see President Trump — one of Beijing’s toughest critics — as a kind of savior for the nation.

Mick MulvaneyCreditChip Somodevilla/Getty Images

As a lawmaker, Mick Mulvaney tried to abolish the Consumer Financial Protection Bureau. And when the Trump administration made him its acting director, he steadily undercut it from within, Nick Confessore reports in the NYT Magazine.

• “When Mulvaney took over, the fledgling C.F.P.B. was perhaps Washington’s most feared financial regulator: It announced dozens of cases annually against abusive debt collectors, sloppy credit agencies and predatory lenders.”

• “What he left behind is an agency whose very mission is now a matter of bitter dispute. ‘The bureau was constructed really deliberately to protect ordinary people,’ says Lisa Donner, the head of Americans for Financial Reform. “He’s taken it apart — dismantled it, piece by piece.’ ”

• “Some career employees saw a kind of strategic ambiguity at work, designed to muddle decision-making and insulate Mulvaney as he neutered the agency’s enforcement work.”

• The deconstruction “offers a case study in the Trump administration’s approach to transforming Washington, one in which strategic neglect and bureaucratic self-sabotage create versions of agencies that seem to run contrary to their basic premises.”

• This “wasn’t just one of the Trump era’s most emblematic assaults on the so-called administrative state,” Mr. Confessore writes. It was “also, in part, an audition” to become the White House chief of staff.

Robert Jackson Jr., the S.E.C.’s only Democratic commissioner, is expected to step down later this year.

Ulrich Spiesshofer abruptly stepped down as C.E.O. of ABB after facing pressure from activist investors. He will be replaced in the interim by Peter Voser, the company’s chairman.

Nissan has reportedly abolished its “office of the C.E.O.,” a group of executives who worked for the chief executive.


• James Murdoch reportedly plans to invest about $1 billion into new media companies after his family sold the bulk of its media empire to Walt Disney. (FT)

• Commerzbank is said to have been approached by the Dutch lender ING about a potential merger before it began deal talks with Deutsche Bank. (FT)

• Expedia Group agreed to buy Liberty Expedia Holdings for $2.6 billion in stock to simplify its ownership structure. (Bloomberg)

• KKR has profited handsomely by investing in Marshall Wace, the big British hedge fund. (Bloomberg)

• Netflix says it has “no big need” for mergers. (Business Insider)

Politics and policy

• Democratic presidential contenders are spending their fund-raising cash on digital ads, huge rallies and unexpectedly large staffs. (NYT)

• And House Democratic freshmen have maintained a torrid fund-raising pace to hold onto their seats. (Politico)

• UnitedHealth’s C.E.O., David Wichman, said yesterday that Medicare for all, as proposed by leading Democrats, would “destabilize the nation’s health system.” (CNBC)

• Terry Gou, Foxconn’s founder, said a sea goddess has persuaded him to run for the presidency of Taiwan. (Bloomberg)


• Here’s what the Brexit delay means for the forthcoming E.U. elections. (FT)

• Brexit is proving bad for people’s mental health. (FT)


• The enforcement mechanism America wants in its proposed agreement with China could also be a powerful weapon for Beijing. (Bloomberg)

• The U.S. and Japan will fast-track their trade talks, partly by narrowing the scope. (FT)


• Jack Dorsey of Twitter promised changes to clean up his social network. But can he do it? (Axios, Wired)

• How Hulu’s ads could help it in the streaming wars. (NYT)

• Microsoft turned down a facial-recognition contract with a California law enforcement agency over rights concerns. (Reuters)

• Here’s an insightful — if extremely long — look at Facebook’s troubled 15 months. (Wired)

• The NYT spent $60 on a facial recognition system to study crowds in a park. It worked scarily well. (NYT)

Best of the rest

• Donations for the restoration of Notre-Dame have surpassed 600 million euros, or about $675 million. (NYT)

• Researchers at the Commerce Department’s Bureau of Economic Analysis want to measure how wealth is shared across America. (WSJ)

• Nissan and Renault have ousted Carlos Ghosn. But can they save their partnership? (NYT)

• Richard Liu, the billionaire founder of the Chinese e-commerce giant, has been accused of rape in a lawsuit. (NYT)

• The highest-paid financial professionals work in real estate investment trusts. (WSJ)

• Employee wellness programs do little good. (NYT)

• What it was like for a Lehman Brothers veteran to watch “The Lehman Trilogy.” (NYT)

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