“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.
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