Apple has confirmed that it held talks with Samsung Electronics and MediaTek along with existing vendor Intel Corp to supply 5G modem chips for 2019 iPhone models. The discussion between these companies was revealed during testimony of Apple executive at the ongoing trial between Qualcomm Inc and the US Federal Trade Commission on Friday. Apple used a modem from Qualcomm exclusively on its iPhones between 2011 and 2016. However, starting in 2016, Apple decided to split the modem business between Qualcomm and Intel and last year, the iPhone maker went ahead with dropping Qualcomm altogether and using only Intel modems on three new iPhone models – the iPhone XR, iPhone XS, and iPhone XS Max.
During the testimony on Friday, Apple supply chain executive Tony Blevins confirmed that the company considered MediaTek and Samsung to supply the chips for next generation of wireless network, widely known as 5G. Qualcomm is undisputed leader in the 5G wireless communication and its modems are expected to power 5G smartphones from leading brands including Samsung, OnePlus and Xiaomi in 2019. The 5G mobile telephony is expected to enable gigabit throughput speeds on mobile with low latency and will aid in connected vehicles and home IoT solutions.
Apple parted ways with Qualcomm citing the San Diego-based semiconductor company is charging extensively for patent license and is dominating its position as the industry leader. Apple and its partners sued the company first and the FTC has also sued the company alleging that it engaged in anti competitive patent license practice to maintain its dominant position in the modem chip business.
During the testimony, Blevins also confirmed that Apple sought for multiple suppliers but signed exclusive agreement with Qualcomm since it offered deep rebates on patent license costs in exchange for exclusivity. Apple broke off a deal with Intel in 2013 to supply modems for the iPad Mini 2 because it would lose rebates from Qualcomm. Later that year, Apple started its “Project Antique” to secure a second modem supplier, Blevins testified.
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Apple thus introduced Intel as second supplier in 2016 and 2017, and migrated fully to the chipmaker’s modems when it launched three new iPhones last year. “The entire concept of Project Antique was to find a second supplier. No offense to (Intel) but we don’t want to be single supplier with them. We wanted both Qualcomm and (Intel) in the mix,” Blevins said. According to Reuters, Blevins also confirmed that the company explored the idea of making Intel sole supplier of modems for the Apple Watch, which used Qualcomm chips to enable 4G connectivity in 2017.
He further revealed that talking with Samsung was “not an ideal environment” since it competes with Apple with its Galaxy and Note smartphones. Bloomberg has reported that Apple will miss out on the first 5G wave of devices and will instead launch its first 5G smartphone in 2020. Intel is expected to have its 5G modem ready by early 2020.