“Apple Inc., locked in an intensifying legal fight with Qualcomm Inc., is designing iPhones and iPads for next year that would jettison the chipmaker’s components, according to people familiar with the matter,” Dana Mattioli and Tripp Mickle report for The Wall Street Journal. “Apple is considering building the devices only with modem chips from Intel Corp. and possibly MediaTek Inc. because San Diego, Calif.-based Qualcomm has withheld software critical to testing its chips in iPhone and iPad prototypes, according to one of the people.”
“Qualcomm, which has worked with Apple for a decade, stopped sharing the software after Apple filed a federal lawsuit in January accusing Qualcomm of using its market dominance unfairly to block competitors and to charge exorbitant patent royalties, this person sai,” Mattioli and Mickle report. “Apple’s plans to exclude Qualcomm chips from next year’s model could still change. People familiar with Apple’s manufacturing process said the company could change modem-chip suppliers as late as June, three months before the next iPhone is expected to ship. Still, some of the people said Apple hasn’t previously designed iPhones and iPads to exclude Qualcomm chips at a similar stage of the process.”
“Qualcomm last year sold around $3.2 billion of modem chips a year to Apple, or 20% of its total chip sales, according to an estimate by Macquarie Capital. This year, Qualcomm’s chip sales to Apple are likely to come to $2.1 billion, or 13% of total chip revenue, reflecting more fully the iPhone 7’s mix of Qualcomm and Intel modems,” Mattioli and Mickle report. “Jettisoning Qualcomm chips would create risks for Apple… Apple typically wants at least two suppliers of key iPhone components to bolster its negotiating leverage, according to people familiar with its procurement process. So it would have to add a new supplier such as MediaTek in addition to Intel to maintain that for modem chips.”
Read more in the full article here.
MacDailyNews Take: The greedy, confused, vindictive, and shortsighted Qualcomm deserves every ounce of pain that Apple Inc. wishes to inflict upon it.
Qualcomm faces long odds in attempt to get ban of iPhone sales and manufacturing in China – October 17, 2017
Qualcomm files lawsuits seeking China iPhone ban, escalating Apple legal fight – October 13, 2017
Qualcomm fined record $773 million in Taiwan antitrust probe – October 11, 2017
Apple faces down Qualcomm, Ericsson over EU patent fees – October 2, 2017
Qualcomm loses two key rulings in its patent royalty fight with Apple – September 21, 2017
Apple’s A11 Bionic obliterates top chips from Qualcomm, Samsung and Huawei – September 18, 2017
U.S. judge rules Apple lawsuits against Qualcomm can proceed – September 8, 2017
Qualcomm CEO expects out of court settlement with Apple – July 18, 2017
Apple-Qualcomm legal dispute likely to be ‘long and ugly’ – July 7, 2017
Qualcomm wants court to block Apple from U.S. iPhone imports and sales – July 6, 2017
Judge rules U.S. FTC antitrust lawsuit against Qualcomm to proceed – June 27, 2017
Apple uses Supreme Court decision to escalate war against Qualcomm – June 20, 2017
Apple’s amended San Diego complaint against Qualcomm leaves no doubt: many billions at stake – June 20, 2017
Apple rejects Qualcomm’s allegation of throttling iPhones, says ‘study’ is ‘methodologically unsound’ – June 20, 2017
Apple just poached one of Qualcomm’s top guys – May 31, 2017
The QualCON must end. There are greedy bastards and there are jacked-up unreasonable GREEDY bastards HQ’d in San Diego giving San Diego a bad name.
I wish Apple would spend a few billion to develop this tech in-house, then release it open-source to destroy Qualcomm
It’s not software. And Qualcomm owns the (FRAND) patents.
It’s great to see that when a company behaves baldy towards Apple, Apple tries to take business away from them. It may not happen overnight, but it happens eventually.
We’ve seen it with Google and their maps, Samsung with a whole bunch of components and are now seeing it with Qualcomm.
It’s not always easy for Apple to find a suitable alternative, Apple Maps was a bumpy road initially. Doing away with Samsung’s chip fabrication required massive investment in TSMC, which propelled them to become a major force in chip fabrication. Not only has Apple diverted huge sums of money away from those former suppliers or partners, but they have created a significant rival to them too, which weakens them in the future.
Qualcomm appear to have learned no lessons from how Apple has reacted to that sort of situation and will be the next company to feel the pain.
I wouldn’t be at all surprised if Apple were to develop it’s own modem chips instead of relying on Intel or MediaTek.