5G is the thing for the 2019 smartphone market. Many big smartphone makers, including Samsung, LG and Oneplus have already announced their 5G smartphones. Samsung’s Galaxy S10 5G is already available in the market. The 3rd biggest and the most loved smartphone maker; Apple did not have anything to say in response to the 5G smartphones of its competitors. The enthusiasts were hoping that the 2019 iPhone, coming this September will have 5G support but unfortunately, that is not going to happen. Initially, Apple had a deal with Intel to make the 5G modems that will power the 5G iPhone. To Apple’s distress, Intel’s plan regarding their 5G modems went to drain, and Apple had to look for another chipmaker for their 5G modem.
The 2nd obvious choice for Apple was Qualcomm, which ended up becoming their 5G partner. There is more to this story, especially with regards to the relationship between Apple and Qualcomm. We’ll get into this shortly. More recently reports from Tomshardware suggest that Apple plans to acquire German leg of Intel’s modem division. This move (if happens) is significant for Apple considering the relationship between Qualcomm and Apple.
Apple vs. Qualcomm
Qualcomm is the biggest smartphone chip maker; most high-end smartphones are powered by Qualcomm’s SoCs. Before the lawsuit battle between both firms, Apple was using Qualcomm’s modems on their custom chips. Then their lawsuit battle started when Qualcomm accused Intel of using their intellectual property on the iPhones. Apple responded with its series of lawsuits, and it went on.
These lawsuits were filed in different countries, and the rest is history. Both companies won and lost in different countries, the end of the lawsuit, however, was very anti-climatic. Apple realized that Intel would not be able to manufacture the 5G modems in time. So, Apple presented a considerable amount of money (around $4.5 billion) in the form of apology to Qualcomm and in turn, got a six-year global contract of 5G modems. Hence, in the corporate world, money is the only solution to any dispute between firms. Apple is aware of the market structure; it knows the iPhones are already late in adopting 5G and hence the settlement though comes at a price, is in favor of Apple’s more significant interests.
Apple and Intel
The ongoing dispute between Apple and Qualcomm was the reason why Apple resorted to Intel for its modem technology. Intel had already tried its luck in the smartphone market with its x86 architecture, it could not get into double figures in terms of market share, and hence Intel decided to leave the market. The market was influenced by the ARM architecture where some manufacturers used the core design while some used ARM’s cores for their processors.
Soon after employing Intel’s 4G modems in its devices, Apple found that the modems have poorer performance and energy efficiency compared to Qualcomm’s devices. It was also reported that Intel would not be able to meet the 2020 deadline to develop the 5G modem for the iPhones. Hence Apple went back to Qualcomm, and both firms settled at the six-year 5G contract.
It seems that the dispute between both firms has been settled. However, tension is still there. That is why Apple being a ‘bigger’ firm, is playing it safe. It is reported that Apple plans to acquire the remains of Intel’s 5G development. Apple has already mastered SoC development to some extent; its ‘A’ chips are far ahead of the competition. It will be no surprise if Apple comes out with its own in house 5G modem. Apple is one of the few firms that have enough resources to achieve this suit in the 2024 time frame. On top of that, the company has a buffer period of 6 years ahead; in this time, Qualcomm will fulfill the modem requirements.
Reports suggest that Apple is planning to acquire the German leg of Intel’s 5G venture. Since last year Apple has been trying to strike a deal in buying Intel’s modem division. Apple has already poached many employees of Intel’s division. Intel, on the other hand, is trying to get away from its cash leaking division.
German’s Infenion modem maker was first acquired by Intel when Intel entered the smartphone market. Apple has shown interest in Intel’s subsidiary. It is reported that Apple could make its 5G modems without any outside help, but it would take a lot of R&D. Thus Infenion acquisition is perfect for Apple’s interest.
Apple can then look into the development in-house and with time the company can have a very competent network team cutting dependencies on other firms.