“Apple Inc.’s legal surrender this week is a blow for the company’s supply chain strategy, and one of the biggest tests of its push to cut reliance on providers of key components,” Mark Gurman and Ian King report for Bloomberg. “The iPhone maker struck a deal Tuesday with Qualcomm Inc. to halt all litigation and start using the chipmaker’s modems again, likely including important new 5G versions.”

“The agreement includes a six-year licensing pact, creating a telling new deadline for Apple to design its own modems and finally cut ties to Qualcomm. That’s an eternity in the technology business and shows how difficult it is to make this crucial component,” Gurman and King report. “‘Modems are the sport of kings,’ said Gus Richard, a chip analyst at Northland Capital Markets. ‘Qualcomm’s probably the only company on the planet that can get a 5G modem in an Apple phone by next year.’ Apple declined to comment.”

“The Qualcomm detente is a bitter pill for Tim Cook,” Gurman and King report. “Modems require more layers of engineering than some other types of processors… Apple began in-house work on modems about a year ago, and the part typically takes at least two years to build and another year and a half to test… While its legal battle with Qualcomm raged, Apple began work on its own component. It has teams dedicated to this in San Diego, Cupertino, California, and Munich, Germany.”

Read more in the full article here.

MacDailyNews Take: Surely Apple has the cash and the will to get to self-sufficiency in modems within six long years!

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