Mikey Campbell
A surprise settlement in a years-long legal battle over licensing and patents has opened the door for Apple to adopt Qualcomm 5G modems, but the chips are not expected to reach iPhone until 2020.
Citing a source familiar with the matter, Nikkei reports Apple and Qualcomm were working toward a settlement for weeks, during which time Apple began evaluations of Qualcomm's 5G modem for use in iPhone. In addition to what appears to be internal testings, the tech giant also requested partner manufacturers to test the chip, the report said.
Despite the effort, Apple will not be able to build the chipmaker's 5G silicon into this year's iPhone. The deadline for integration, both in terms of hardware and software, has likely long passed.
"It is too late for Apple to use Qualcomm's chips this year, but for 2020 it will purchase modem chips, including 5G modem chips, from the chipmaker for iPhones after finalizing the deal," according to an unnamed source.
With a settlement secured, Apple is now free to use Qualcomm's 5G technology. Previously, Apple's two-year legal battle with the chipmaker restricted its options to Intel, whose XMM 8160 5G modem is rumored to be hamstrung by delays. A report earlier in April claimed Apple had "lost confidence" in Intel's ability to deliver the chip on time, as the company missed several development deadlines.
"Apple had been a little concerned whether a sole supplier for modems could affect the company's plan to introduce its first 5G smartphone next year," one source told Nikkei.
Apple's search for a viable 5G modem supplier has been well documented over the past few months, with numerous reports noting the tech giant is in dire straits without Qualcomm's participation. The situation changed earlier today, when settlement negotiations were finalized in time to end Apple's original action over withheld rebates and chip licensing fees that just got underway in San Diego.
While specific settlement terms have not been disclosed, the deal includes a multiyear chipset supply agreement and a backdated six-year license agreement with a two-year option to extend. Apple paid a sum to Qualcomm as part of the contract, though the company could regain those funds in rebates if the agreement is structured after Qualcomm's typical contract terms.
How long Apple will rely on Qualcomm hardware remains unknown. The iPhone maker is in the process of developing its own 5G chips for use in future iPhone models. Reports suggest Apple has between 1,200 and 2,000 engineers on the project, including recruits from Intel and Qualcomm, who are working toward a solution predicted to debut as soon as 2021.
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24 Comments
I'd bet testing the chips was a large contributor to the settlement. Probably gave Apple a clearer understanding of just how far behind Intel was.
This is actually along the lines of what we have been previously told. Earlier reports claimed that iPhones wouldn't have 5G until 2021, but it is likely that they meant "the iPhones introduced in late 2020 and sold until late 2021." While I'm sure Apple is relieved to have a source for 5G chips that it knows are good, I'm also quite sure they are continuing with their own efforts and encourage other companies to spread the 5G love around. Apple does not like to have one supplier for anything because of exactly the nonsense we've seen Qualcomm pull.
I would expect that Apple will use more than just Qualcomm for its 5G needs in 2020 and going forward, eventually phasing them out to the smallest possible role, like they have done with Samsung.
All indications are that Apple will move modems in- house in 2-3 years. This deal buys Apple 5G coverage in short term and (likely) protects them from an IP/lawsuit when they do launch their own
I don’t understand the rejoicing on the $QCOM side. I can’t imagine Cook has any confidence in them as a strategic supplier partner after all the BS they have pulled over the last two years
It is just a matter of timing
This would be a great time for Apple to abandon the annual media circus it holds every September. The circus like atmosphere and the build up create what is invariably disappointment in what are always great products -- if for no other reason than the build up combined with media's penchant for reporting negativity rather than positivity.
For myself, It is time to upgrade at least one of our phones. But there is no way that I would want to buy a phone that is soon to be obsolete. That is my feeling and I can pretty much guarantee that will be the feeling in the media as well. People just don't keep phones for a year or two anymore and the media will be merciless if Apple tries to pawn a 4G phone off on us.
But, on the other hand, I wouldn't hesitate to wait a few months till Apple can come out with a product I would want to live with for the next 4-5 years. If Apple does decide to go ahead with its September circus, then I assume they will announce a 5G phone that will soon be available. Otherwise...