After a year-long disagreement that started with being sued by Apple at the start of last year, Qualcomm has finally put a stop to its business relationship with the Cupertino company. During an earnings call with industry analysts, Qualcomm revealed that it doesn’t expect any requests from Apple for the supply of its modems and thus the next generation of iPhones might be using Intel’s chips.
According to CNET, Qualcomm’s Financial Chief, George Davis said: “We believe Apple intends to solely use our competitor’s modems rather than our modems in its next iPhone release”. While the company’s Head of Chip Business, Cristiano Amon did indicate that this doesn’t mean the end of the business with Apple forever, saying “This is a very dynamic industry. If the opportunity presents itself, I think we will be a supplier of Apple”.
While Davis didn’t make direct mentions to Intel about the recent development, it’s believed that Intel’s latest XMM7560 chip might have been a major game-changer. It’s Intel which offers better connectivity to GSM and CDMA networks and has been supplying LTE modems to Apple since the iPhone 7, though not entirely. Apple has used modems from both the companies on several variants of the previous iPhones and while the next line of Apple devices won’t equip their chips, Qualcomm has ensured that it’ll continue supporting older iPhones which use them.
The news comes in the aftermath of legal disputes that Apple and Qualcomm have been suing each other withfor almost a year. Apple sued Qualcomm for close to $1 billion for excessive royalties in January 2017, months after which Qualcomm sued Apple for making their modems seem inferior to Intel’s. Later in the same year, the American chip manufacturer sued Apple for sharing internal trade secrets with Intel and even demanded Apple stop production of its iPhones in China. Earlier this year, Qualcomm got fined for paying Apple to use its chips over Intel’s.
With the 2018 line of iPhone X and iPhone X Plus touted for a release this fall, Qualcomm would be kicking itself and this could be a significant blow to the yearly revenue estimates. However, analysts do predict that Qualcomm has a huge advantage over its competitors when it comes to the development of the upcoming 5G technology. Their 5G chips are supposed to hit the market later this year with OEMs to make use of the technology by the early part of 2019. This will be a blessing since Intel hasn’t quite peaked in the 5G development and might only launch its 5G modem by late 2019.
Only time will tell if Apple was too eager to jump off the bandwagon or if it really was the right decision to cut off Qualcomm this early in the year.