Apple could end up buying 5G modem chips from a very unlikely source

Apple could end up buying 5G modem chips from a very unlikely source
You might know that Huawei manufacturers handsets and networking equipment. At the end of last year, it was the third largest smartphone company in the world and the top provider of networking gear. What you might not know is that Huawei designs its own chips. Its Hi-Silicon unit created the Kirin 980 SoC which is currently found powering up the Huawei Mate 20 Pro and the Huawei P30 series. It also will be used to drive the foldable Huawei Mate X. While Huawei designs the chips, they are actually manufactured by TSMC.

Now as we discussed yesterday, Apple is relying on Intel to have its XMM 8160 5G modem chip ready in time for its 2020 iPhone models. There are conflicting reports about whether Intel will deliver the component in time, and as a result, we have seen rumors that a 5G iPhone might not surface until 2021. Intel says that it will be shipping the chip later this year, but just in case there is a problem, Apple has found an unlikely friend in Huawei.

Engadget reports today that Huawei would consider selling its 5G Balong 5000 modem chips to Apple. The report cites a source who has "knowledge of the situation." This is an unusual thing for Huawei to do considering that an executive said earlier this year that "Balong is mainly for supporting Huawei's smart products, such as phones and IoT products, and is currently for Huawei's internal use only." It also seems strange considering that Huawei is looking to leapfrog over both Apple and Samsung to become the global leader in smartphones by 2020.

Apple could turn to Qualcomm, but that is unlikely to happen since both firms have been squaring off in court over patent infringements, antitrust claims, and royalty payments, In fact, a week from today a courtroom in San Diego will host a multi-billion dollar trial between Apple, its contract manufacturers like Foxconn and Wistron, and Qualcomm. At stake are unpaid royalties amounting to billions of dollars. Qualcomm CEO Steve Mollenkopf said back in November that his company was "on the doorstep" of resolving its differences with Apple; we now know that this was not the case.

While it seems that Huawei would be "open" to selling Apple its 5G modem chips, the other side of the equation is whether the gang in Cupertino would be willing to buy them. During the FTC v. Qualcomm case, Apple supply chain executive Tony Blevins testified that Apple was considering the use of 5G modem chips from Samsung or MediaTek for the iPhone. Even though Apple currently uses only Intel modem chips for its handsets, Blevins talked on the stand about "Project Antique." This was Apple's attempt to find a second supplier to provide it with modem chips. As Blevins noted, "No offense to (Intel) but we don’t want to be single supplier with them. We wanted both Qualcomm and (Intel) in the mix."

How would the Trump administration respond to an Apple-Huawei partnership?

Huawei's Balong 5000 modem chip supports both mmWave and sub-6GHz 5G networks. It also is compatible with 4G LTE, 3G, and 2G networks. The important thing about using Huawei's modem chip is that Apple could get its hands on it earlier than Intel's chip and have more time to test a 5G iPhone. The Balong 5000 5G modem chip will debut on Huawei's first phone to support the next generation of wireless connectivity. That device happens to be the foldable Mate X.

Apple wouldn't be the only one in such a partnership to benefit. Huawei would get to widen the use of its chips beyond its own devices, and you can just imagine how much revenue would flow into the company's coffers. It also might play well in China after U.S. government attacks on Huawei have led some Chinese consumers to unofficially boycott Apple products.

There is a huge unknown here, and that is how the Trump administration might react. Huawei is considered a threat to U.S. national security and allies have been warned not to use Huawei's networking gear to build out 5G networks. That's because the law in China requires a company like Huawei to gather intelligence if requested to do so. Considering that we are talking about the modem chip, a major component in communicating voice and data, there are bound to be concerns about the use of Huawei's component inside the iPhone.



1. Busyboy

Posts: 738; Member since: Jan 07, 2015

Let's be honest, Apple isn't going to touch Huawei's modems. Why doesn't Apple source from Samsung?

3. drunkenjay

Posts: 1700; Member since: Feb 11, 2013

i heard its because samsung can only make enough for their own phones so they wont be outsourcing them: "Apple inquired about the supply of 5G modem chip from Samsung Electronics System LSI division. However, we know that Samsung Electronics System LSI answered that the supply volume of its smartphone 5G modem chip is insufficient. source:

8. cheetah2k

Posts: 2297; Member since: Jan 16, 2011

Apple didnt get into the Samsung pipeline early enough, plus both Samsung and Qualcomm are in dispute with Apple, it was only a matter of time when they pushed back and said no to the rotten fruit... We will start seeing more manufacturers push back and avoid manufacturing for Apple, because lets face it, Apple are a bunch of c**nts and we all know they back stab everyone in the end..

12. AngelicusMaximus

Posts: 762; Member since: Dec 20, 2017

Keep your personal feelings aside. The reason is as stated. Samsung simply can't manufacture enough to meet Apple's need. If they could, I'm sure they would as any other company as it would mean billions in revenue to land a deal that big.

14. hjl2345

Posts: 92; Member since: Aug 11, 2018

Apple had like 3 choices. 1. Mediatek 2. Qualcomm 3. Intel. Out of the 3, Qualcomm seemed to be the best choice, but due to their recent disputes, they cannot. Both Mediatek and Intel lack behind Samsung and Qualcomm, and Samsung can't push out enough chips, even for them, since they will plan on shipping their phones with Exysnos chips later this year and moving on to 2020.

38. shm224

Posts: 303; Member since: Mar 19, 2015

why do you think Samsung lacks that kind of capacity? From what I hear Samsung LSI fab capacity is slightly underutilized, so I don't see how that even makes sense.

48. oldskool50 unregistered

Samsung yes has lots of factories. But if those factories are tooled to make a specific product, it takes time and money to retool them to make other products. Samsung stated they don't have the capability to provide the amount of chips Apple would liekly need. You can take them at their word, or you can just drop the subject. Because anything else you state is just dumb speculation. Even if Samsung is stiffing Apple on purpose; so what! They should. In fact i wish the whole industry did. After what Apple did to Samsung, if I was the head of Samsung, I wouldn't sell Apple any other component for the rest of their dying days. I wouldn't care how much Apple was willing to pay. Samsung does not and has not ever needed Apple. Because Apple needs to rely on 3rd parties for everything they need, they should be trying to create the best relationships possible. But instead, they steal their tech, sue them afterwards over it, and then don't want to pay. Imagine if every business did that to each other. How long you think they will last.

55. shm224

Posts: 303; Member since: Mar 19, 2015

Samsung never stated they didn't have sufficient supply. That statement comes from "one electronics industry official." Everything you said likewise is based on "dumb speculation."

62. Lita9

Posts: 57; Member since: May 07, 2017

TRUE DOES APPLE EVEN MAKE ANYTHING OF ITS OWN? ? They buy camera from sony, screen from samsung, modem from Qualcomm, they only make processor hahaha . they boast attitude as if they make everything, they are the ruler. Good that samsung, Qualcomm is showing apple while Samsung makes everything on its own

50. cheetah2k

Posts: 2297; Member since: Jan 16, 2011

LOL mate, its all fair in love and war. I doubt very much Samsung can't do it. From Samsung's point of view its called "Market Advantage"..

32. SmartPhoneMobiles

Posts: 188; Member since: Oct 16, 2016

(scrap) Apple has issue with everyone

36. shm224

Posts: 303; Member since: Mar 19, 2015

Samsung does have plenty of time and resource to revamp their production line for 2019 and 2020, but I agree with your view. Apple demands their suppliers to take huge financial and engineering risk without any commitment to buy -- remember GT Advanced Tech and Qualcomm? Qualcomm offered migration incentive, rebates and other terms to appease Apple; only to get tricked into regulatory troubles by Apple who tried to further squeeze Qualcomm.

47. oldskool50 unregistered

What? Without commitment to buy? When Apple goes to an OEM to have a sample product developed, Apple pays for that cost. You think these companies engineer samples for free? You have no idea what you're talking about.

56. shm224

Posts: 303; Member since: Mar 19, 2015

No honey. Qualcomm not only had to pay for Apple's migration cost (from Intel) and the company also had to pay "rebates" to make sure that Apple buys Qualcomm's chips since Apple was at no point obligated to buy Qualcomm's modem -- which became the basis of the infamous "rebates for exclusivity" antitrust finding by the KFTC/EU/FTC. Try to keep up

43. oldskool50 unregistered

Just FYI, Samsung and other tech companies all agree that Qualcomm's policies for chipsets are very questionable. Samsung only dropped its lawsuit against Qualcomm for the same thing Apple is suing for, because they worked out some kind of deal.

57. shm224

Posts: 303; Member since: Mar 19, 2015

You clearly don't know what you are talking about. Apple's grievance with Qualcomm is largely about royalty rates (too high) and basis (component-level vs system-level) as a smartphone manufacturer. Samsung's on the hand is largely based on their licensing agreement as a baseband maker (eg, Qualcomm's anticompetitive contract which discourages sales of their modems/Exynos APs under certain terms)

31. SmartPhoneMobiles

Posts: 188; Member since: Oct 16, 2016

O course they will samsung doesn't have 5g modems!

35. Vyshak75

Posts: 82; Member since: Mar 03, 2016

Well... they have...

37. shm224

Posts: 303; Member since: Mar 19, 2015

Samsung went production with their 5g modems last week.

42. oldskool50 unregistered

Because Samsung doesn't have any to sell them and has already told them no.

58. shm224

Posts: 303; Member since: Mar 19, 2015

Again Samsung never stated this.

60. Lita9

Posts: 57; Member since: May 07, 2017

DOES APPLE EVEN MAKE ANYTHING OF ITS OWN? ? They buy camera from sony, screen from samsung, modem from Qualcomm, they only make processor hahaha while Samsung makes everything on its own.

2. MrSupamanNoHeer unregistered

Another clickbait article from Friedman. I knew who it was before I opened it.

11. RevolutionA

Posts: 476; Member since: Sep 30, 2017

Even me, from the title itself. I'm just watching for these titles and guessing the name

13. BuffaloSouce unregistered

But you still went through it... Why do you come here for your news if you have such an issue with how everything is written?

44. oldskool50 unregistered

I dunno. It's just his opinion. Why are people here so against someones opinion, because they choose to see things differently?

4. darkkjedii

Posts: 31598; Member since: Feb 05, 2011

Leo, what ya think? I think intel modems suck.

5. Venom

Posts: 3823; Member since: Dec 14, 2017

Yes, you've said that before. Many times.

6. Vancetastic

Posts: 1754; Member since: May 17, 2017

You didn’t just take the took someone else’s bait!

23. sissy246

Posts: 7129; Member since: Mar 04, 2015

LMAO Hook line and sinker

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