Apple may have settled with Qualcomm, but Tim Cook and his team appear to be working to gain some leverage in the battle to get 5G on the iPhone.
The latest leaked details on Apple’s 5G plans for the iPhone have been covered by noted analyst Ming-Chi Kuo (reports MacRumors). After finally put to bed the IP issues with Qualcomm and gain access to its 5G technology (albeit at a potentially high cost), Tim Cook is gambling that new relationship by reportedly working with Samsung for inventory of the South Korean company’s 5G chips.
The market was worried that Intel’s disappointing 5G baseband chip development might be the most severe uncertainty for the new 2H20 iPhone models’ adoption of 5G. But we believe the uncertainty has been removed after Apple and Qualcomm’s end of patent dispute and entrance into a six-year licensing deal, and Intel’s announcement that it will exit the 5G baseband chip business. We expect Apple will likely adopt 5G baseband chips made by Qualcomm (focus on mmWave markets) and Samsung (focus on Sub-6GHz markets) for lowering supply risk, reducing costs and having better bargaining power.
Bringing Samsung in as a 5G supplier is a classic Cook move. The objective to create an internal market with a major and a minor supplier should force both to offer competitive pricing (with the assumption that the volume of an Apple purchase makes up for the smaller margin). That’s a risky call given the new supplier relationship.
It’s also a pretty standard play from Apple, and it’s one that anyone paying attention will have seen in other areas, such as screen display technology and memory chip supply. I’m pretty sure that Qualcomm has been paying attention and are expecting such a move from Apple and that the long-term contract with Apple will have a number of stops in the terms to block this game-playing. Apple needs Qualcomm a lot more than Qualcomm needs Apple at this stage.
As for the release of a 5G iPhone, even the most optimistic would think that attempting to get the newly acquired modems into the 2019 iPhones would be a courageous decision. Expect Apple to quietly lean on AT&T’s 5G Evolution network to allow the words ‘5G’ to be used on stage in a positive light, and the true 5G models to arrive in September 2020 – eighteen months after 5G debuted on Android, but no doubt regarded as ‘fashionably late’ by Apple’s fan base.