Apple is planning to purchase 5G modem chips from Qualcomm for use in its 2020 iPhones, according to a source with knowledge of today's settlement plans that spoke to Nikkei.
Apple won't be able to use Qualcomm chips in its 2019 iPhone lineup, but has already been testing Qualcomm's 5G chips for 2020 devices.
"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," a source with direct knowledge of the settlement plan told Nikkei.
As it moved toward a settlement, Apple started testing Qualcomm's 5G modem chips and asked some of its suppliers to test the chipmaker's product, Nikkei has learned.
Qualcomm and Apple have reportedly been negotiating for weeks to reach the settlement that was announced today. In a press release, Apple said that the two companies had agreed to drop all litigation with a six-year licensing agreement for Qualcomm's technology. Apple also said that the deal included a "multiyear chipset supply agreement."
Apple initially planned to use Intel's 5G chips in its 2020 iPhones, but recent reports have suggested that Intel has been missing developmental deadlines, causing Apple to lose confidence in Intel.
For a September 2020 launch, Apple needs to have sample 5G chips in hand in mid 2019, with finished chips available in early 2020, and rumors indicated Intel might not make that goal.
Apple in 2018 used Intel's chips exclusively for its iPhone lineup due to the bitter legal battle with Qualcomm, but may have had no choice but to settle with Qualcomm in order to ensure a 5G iPhone launch in 2020.
Smartphone makers like Samsung are debuting their first 5G smartphones this year, which means Apple is already launching 5G technology behind other manufacturers. Another year of delay rolling out 5G would have put iPhones far behind other devices.
Qualcomm has already debuted two 5G chips, including the X50 and the X55.
It's not clear if Apple will use Qualcomm chips exclusively for the 2020 iPhones or will split orders between Intel and Qualcomm as it has done in the past. According to Nikkei's source, Apple was concerned whether a sole supplier would affect its plans to introduce the first 5G smartphone in 2020.
Apple is working on developing its own modem chips in house to avoid relying on either Qualcomm or Intel, but those chips reportedly won't be ready for a 2020 iPhone launch.
Top Rated Comments
[doublepost=1555454970][/doublepost]You have no clue. Apple was dug in and had plenty of money to fight. The settlement appears to me to be a concession and admission from Qualcomm that too much of their business was at risk to continue. Everything dropped?
Apple: “OK look, we will buy your chips if you agree to new, more fair, terms.”
Qualcomm: “Done.”
Qualcomm’s stock up 20%. You think the market didn’t recognize what a big deal this is for QCOM? Apple didn’t even move on the news. They are fine either way.