Apple said to have held talks with Samsung Electronics and MediaTek Inc. along with existing vendor Intel Corp to supply 5G modem chips for 2019 iPhones, according to an Apple executive’s testimony at a trial between Qualcomm Inc and the U.S. Federal Trade Commission.
Apple, between 2011 and 2016, relied on Qualcomm as the sole supplier of chips which helped iPhones connect to wireless networks. However, in 2016 the company split its business Intel and Qualcomm, and in 2018, it completely moved to Intel for its newest iPhones. Apple supply chain executive Tony Blevins testified to the court that Apple has also considered MediaTek and Samsung to supply the chips for 5G.
The FTC is suing Qualcomm alleging the company engaged in anti-competitive patent licensing practices to preserve a dominant position in the premium modem chip market. On the stand at a federal courthouse in San Jose, California, Blevins testified that Apple has long sought multiple suppliers for modem chips but signed an agreement with Qualcomm to exclusively supply the chips as the chip supplier offered deep rebates on patent license costs in exchange for exclusivity.
The company in 2013 has stopped its work with Intel to start supplying modems for iPad Mini 2 because Apple would lose its rebates by using Intel’s chips, rendering Intel’s products “economically unattractive” overall. Late that year, Apple’s cost negotiations with Qualcomm did not go as Apple hoped, hence the company kicked off “Project Antique” to secure a second modem supplier, Blevins testified.
By 2016 and 2017, Apple introduced Intel’s modems in some of its iPhones but also still used Qualcomm chips. Apple’s lawsuit against Qualcomm was filed in early 2017 and this caused their business relationship to change. “The entire concept of Project Antique was to find a second supplier. No offense to (Intel) but we don’t want to be a single supplier with them. We wanted both Qualcomm and (Intel) in the mix,” Blevins said. He also testified Apple considered making Intel the sole supplier of modems for the Apple Watch, which added 4G connectivity in 2017 using Qualcomm chips. Blevins did not say whether Apple had reached a decision on a 5G modem supplier or whether it would release a 5G iPhone in 2019.