Apple, looking ahead to life without Qualcomm, designs 2018 models for Intel and MediaTek modem chips

Apple, looking ahead to life without Qualcomm, designs 2018 models for Intel and MediaTek modem chips
The legal battle between Qualcomm and Apple over patent royalties, which led Qualcomm to seek an injunction banning iPhone sales in China, may end up permanently damaging the San Diego based chip designer. According to the Wall Street Journal, Apple is designing its 2018 iPhone and iPad models to work with modem chips supplied by Intel and MediaTek. Apple will apparently not use Qualcomm's modem chips for its 2018 mobile devices even though Qualcomm says that the "modem that could be used in the next generation iPhone has already been fully tested and released to Apple."

Apple has always used Qualcomm's modem chips exclusively in the iPhone until last year, when it was supplied by both Qualcomm and Intel. Because the Qualcomm chip (used on the CDMA enabled devices) was much faster, Apple was forced to throttle its speed so that one version of the phone wasn't running much faster than the other (GSM).

Would Apple give up a modem chip that analysts say outperforms the competition just to teach Qualcomm a lesson? The latter owns 50% of the market for modem chips with MediaTek controlling 25% and Intel 6%. Last year, Apple bought 20% of Qualcomm's modem chips amounting to $3.2 billion in purchases. This year, reflecting Apple's decision to add Intel to the mix, that figure is expected to drop to $2.1 billion or 13% of Qualcomm's modem chip revenue.

Another thing to consider is that Qualcomm is considered to be way ahead of its rivals in designing chips for the upcoming 5G standard. The first 5G iPhone could be offered by 2019. Perhaps this is why Qualcomm CEO Steve Mollenkopf recently said that he was optimistic that Qualcomm and Apple would reconcile.

Apple has claimed that Qualcomm failed to pay it $1 billion in royalty rebates that it claims it is due, while the chip designer says that Apple has told the contract manufacturers that it uses to assemble the iPhone and iPad, not to pay royalties to Qualcomm. The latter is also accused of refusing to license its standard essential patents in a fair, reasonable and non-discriminatory manner.

source: WSJ

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20 Comments

1. Klinton

Posts: 1409; Member since: Oct 24, 2016

Apple should stick to Samsung in everything, if want to survive.

3. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

Qualcomm makes the best modems, even samsung uses them along with Qualcomm's SOCs. As for surviving, I don't think Apple or Samsung are going anywhere anytime soon.

13. Papa_Ji

Posts: 851; Member since: Jun 27, 2016

iPhone is lost everything is lost for Apple.. On the other hand smartphones business is only small division of giant Samsung.

22. rantao333

Posts: 346; Member since: May 21, 2013

in term of sales, Samsung mobile division is the largest division in Samsung electronic. And its the most important division of samsung group because it tied closely with semi and display division (samsung mobile source chip and panel from display and semi division)

23. whatev

Posts: 2269; Member since: Oct 28, 2015

Lmao, Samsung smartphones business is the company’s top earner

14. trojan_horse

Posts: 5868; Member since: May 06, 2016

" along with Qualcomm's SOCs" Samsung uses Qualcomm's SoCs because of the CDMA tech, since using the Snapdragon SoC is cheaper than building your own modem and pay royalties... Though Samsung did just that (paid royalties to Qualcomm foCDMA patents?) in the Exynos 7420 because the Snapdragon 810 was an overheating mess. I'll take the Exynos over the Snapdragon any day.

26. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

Depends on the year, exynos was better last year and the year before but not this year.

28. mikehunta727 unregistered

Yeah Exynos and Snapdragon this year are very comparable

18. osterrich21

Posts: 186; Member since: Apr 14, 2017

Samsung make The Qualcomm's chips.

9. AVVA1

Posts: 228; Member since: Aug 01, 2017

It is bad for apple to rely on one company for every piece of hardware apple needs. That's why they outsource from different vendors. So they can get the best price.

5. uncle_gadget

Posts: 1050; Member since: Sep 20, 2017

So Apple is like. We dont want to pay for the best stuff, we will just go elsewhere. Lets see if Intel and MediaTek can yield as much as Qualcomm has. They used an dont wanna pay and now they are gonna drop them. Another move thats gonna cause issues. They will be crawling back to QC, just like they went back to Samsung.

11. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Apple is saying "we don't want to pay for the best stuff, we want to CREATE it" (that's how the iPhone was born, remember?)

19. bur60

Posts: 981; Member since: Jul 07, 2014

If you actually read the statements, Apple doesn't want to use it because Qualcomm wants double royalties. It asks royalties from the fabrics and also from the phone makers that use qualcomm parts. I'm an android guy but Qualcomm is one of the dirtiest companies that exist right now.

12. L0n3n1nja

Posts: 1560; Member since: Jul 12, 2016

So Apple will have slower data speeds than the competition, for the most part mobile networks are too congested and slow to notice the difference anyway.

16. trojan_horse

Posts: 5868; Member since: May 06, 2016

Not only slower data speeds, but less efficient modems as well.

17. byazatt

Posts: 316; Member since: Oct 26, 2012

Finally someone recognized mediatek

20. Anchor

Posts: 160; Member since: Jun 16, 2017

Lol, I was also thinking the same thing.

21. Anchor

Posts: 160; Member since: Jun 16, 2017

Even if Apple stops using QC modems they'd stil have bumper sales because of loyalists. Qualcomm is the only one who can get hurt in this even with their "way ahead of others" 5G dev

25. hemedans

Posts: 755; Member since: Jun 01, 2013

Good thing Microsoft will release windows on ARM, Qualcomm will get new markets of 2 in 1, tablets, ultrabook and other weird small form factors.

27. TheOracle1

Posts: 2280; Member since: May 04, 2015

The much maligned Mediatek hardware will now be hailed as the best there is by the iSheep......

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