Apple is designing iPhones and iPads for next year that will use modem chipsets from either Intel or MediaTek. The Wall Street Journal reports that Apple is planning a move that could do away with Qualcomm's LTE modems used on existing iPhone models.
Apple, the most valuable company in the world and Qualcomm, the leading smartphone chip maker are engaged in a bitter patent battle. San Diego-based Qualcomm has accused Apple of infringing six of its patents while Apple has accused Qualcomm of overcharging for patent use and abuse of power. A move by Apple to drop Qualcomm chipsets from its iPhone and iPad could significantly affect the latter. Reuters confirms that Apple could drop Qualcomm components from next year's iPhone and iPad.
Qualcomm is the leading supplier of LTE modem chipsets capable of gigabit download speed and Apple has been using its chipsets for nearly a decade. In a clear indication that it is moving away from its reliance on Qualcomm, Apple used modems from both Intel and Qualcomm for iPhones last year. Qualcomm, on the other hand, claimed Apple is engaging in unlawful import and sale of iPhones and sought a ban on import of iPhones using Intel modems.
The WSJ report adds that Qualcomm has withheld critical software needed to test its chipsets used on prototype iPhone and iPad models. Qualcomm is believed to have stopped sharing the testing software after Apple filed a lawsuit against the chipmaker in January. In its lawsuit, Apple accused Qualcomm of blocking competitors and making exorbitant charges for royalties towards the use of its patents.
Qualcomm, however, says it is committed to supporting Apple's new devices like it does for the entire industry. Qualcomm said its "modem that could be used in the next generation iPhone has already been fully tested and released to Apple."
People familiar with Apple's manufacturing process believe that Apple could change its modem-chip supplier as late as June, three months ahead of the scheduled launch in September. The Apple iPhone 8, iPhone 8 Plus and iPhone X use a mix of Intel and Qualcomm modem chips.
Apple is believed to constitute 20 percent of total modem sales for Qualcomm. With Apple dropping Qualcomm components, the battle between the two companies could move beyond the courtroom. Qualcomm CEO Steve Mollenkopf had said that both the companies will eventually settle the dispute out of court and the trial is expected to begin early next year.
By switching to Intel and MediaTek, Apple stands to avoid paying for Qualcomm's component but it also stands to lose out on performance. Qualcomm's chipsets are believed to support faster download speeds than that of Intel and some reports suggested that Apple is limiting Qualcomm modems to deliver even performance between two chipsets. With Qualcomm having announced a chipset capable of 5G, it will be interesting to whether Apple really drops the San Diego-based company from its suppliers' list.