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Qualcomm Is Apple’s Last Resort for 5G Modems

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Apple out of options for 5G modems

Apple (AAPL) has been expected to adopt 5G (fifth generation) in 2020. However, a report by FastCompany stated that delays from its modem supplier, Intel (INTC), could push 5G iPhones to 2021 and beyond, as Apple does not have many other options for 5G modems.

 B2_Semiconductors_AAPL 5G modem supplier options

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Samsung and Qualcomm

Samsung (SSNLF) has developed Exynos 5100 5G modem, which it will use inside some of its smartphones, while its flagship phones will feature Qualcomm’s (QCOM) Snapdragon X55 5G modem. However, a report by Taiwan’s Electronic Times stated that both Qualcomm and Samsung have refused to supply 5G modems to Apple. Qualcomm refused as it is in an ongoing dispute with Apple, and Samsung refused because of the tight supply of 5G modems. Some analysts believe that even if Samsung manages to boost supply, it will charge a higher price from Apple.

Huawei and MediaTek

With Qualcomm and Samsung out, the next 5G modem is Huawei’s Balong 5000 modem. However, Huawei does not sell its chips to other companies. MediaTek is also accelerating the development of the Helio M70 modem, but its chips are mostly used in mid and low-end phones and are not fit for high-end iPhones. These limitations cancel out Huawei and MediaTek from Apple’s possible options for 5G modem suppliers.

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Apple’s own 5G modem

The only other alternative left for Apple is to develop its own 5G modem chips. There have been reports that Apple is opening a development center in San Diego, where Qualcomm is headquartered and Intel’s Mobile business is located. A February report by Reuters stated that Apple’s senior vice president of hardware technologies, Johny Srouji, will head the company’s modem design efforts. The company might poach the talent pool from Qualcomm and Intel.

Even if Apple succeeds in developing its own 5G modem chip, it likely will not be before 2021. If the 5G adoption gathers strong momentum in 2020 itself, Apple would fall behind other handset makers in terms of modem technology, which could force Apple to settle with Qualcomm, as it is the only chipmaker that can meet Apple’s qualitative and quantitative requirements.

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