Qualcomm detente is a bitter pill for Tim Cook; clock is ticking on Apple’s own modem

“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!

SEE ALSO:
Qualcomm CEO on Apple settlement: We’re not going to disclose how much the deal is worth – April 17, 2019
Here’s what likely happened between Apple, Qualcomm and Intel – April 17, 2019
Intel axes 5G modem plans after Apple and Qualcomm settle – April 17, 2019
After settlement with Apple, Qualcomm still faces other potential legal fallout – April 16, 2019
Qualcomm and Apple settle, agree to drop all litigation – April 16, 2019

20 Comments

  1. One has to ask why it took them so long to see the dangers before a year or so ago or to play ones hand (one presumes due to pressures on profits before they launched this battle. The answer is you guessed it the 1 dimensional Cook at play and in search of squeezing more profits as per usual without due considerations or interest to the technical aspects in play. He is a one trick pony playing the nice guy but in reality using only the tool of size, wealth and power get to the top and push back others. His hand of course is not as good as he thinks not helped by not developing new decks to play with.

    1. How far downhill has Apple really gone in the last 10 years? How terrible are Apple’s products? Is Cook really doing THAT badly? Is Apple really doing THAT badly? Intel couldn’t even make modems work out. This isn’t a one, two or three year project. Apple has already moved into San Diego… Qualcomm’s territory… to further push their own modem technology. These things take time. Years.

      1. Tim is leaving too much on the table with the Mac, A series cpu’s in the Mac, Apple monitors, routers, etc…It all adds up to big numbers in the end, what is sad is that all of these things are low hanging fruit, but together they make a big difference in user experience.

      2. Your inverted take totally misses the point. The question is not how far “downhill” Cook has taken Apple. The real question is how far UPHILL a competent CEO will soar to greater heights.

        I promise you when Cook leaves Apple will wish him well at his Spaceship Rainbow Departure Party.

        Only THEN on that day, will I lay off the MOST important task facing the company today…

  2. Apple is huge and depends on many suppliers to make the excellent Apple products. The baseband modem industry is very small, and becoming smaller. So, Apple’s options are not easy. The best technology and business analysis of how this Apple – Qualcomm battle, and recent settlement, will affect Apple and the industry that I have read comes from Daniel Eran Dilger, who published this last night on his blog – https://roughlydraftedbeta.com/home/2019/4/17/the-big-loser-in-the-apple-qualcomm-settlement-isnt-intel-its-android.

  3. All Apple wanted was to pay FRAND prices, so I presume that Apple agreed to settle right after Qualcomm submitted to Apple’s demand. If true, Apple’s settling was not a sign of weakness in this one case; It was rather a sign of strength because it won what it wanted in the first place.

    We don’t yet know what other concessions, if any, Apple won. They could be zero, but a significant concession could very well have been be that the six year agreement to use Q. does not preclude Apple from developing and implementing its own modem tech. or even getting it from Qualcomm’s competitors should they arise.

    So, all in all, I doubt that Apple cow towed to Q.’s extortions, unreasonable demands, and threats.

    1. Bloomburg consistently spins against Apple. We don’t know that Apple “folded” because we don’t know what is in the settlement. We weren’t in the room and we are on the silent side of the nondisclosure agreement.

  4. Regarding other chipsets, I hope Apple finally adds the Broadcom BCM47755 GPS chip for far greater precision and less power drain…or develops its own. Position measurement is an extremely important feature for mobile devices and apps would be dramatically improved and new apps would be developed if something like the BCM47755 were widely available on Apple mobile devices. Please, please, please Apple give us the latest and greatest.

  5. I am hopeful John Dingler is on the correct path, as we do not yet know the details of the agreement, where is the information that Apple caved in to Qualcomm? As we have seen with other part suppliers, Apple has to make choices that benefit their company & customers and that means doing business with companies like Samsung and Qualcomm. I for one will wait until we have better insight into how the case was settled, before rushing to judgement.

    1. No problem doing business but, long term there are certain things that have to be done in house, router’s, modems, displays, OS, and Cpu’s. Whatever the AI (tech) future is all the devices talking to each other is vital, and in house capability is better solution.

  6. For Apple to design it’s own 5G modem, how can it do that without treading all over other companies IP? Even it manages to weave a path around every patent, no-one is going to let apple off litigation, just like that…

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