Apple mulls dropping Qualcomm from future iPhones - Mobile World Live

Apple mulls dropping Qualcomm from future iPhones

31 OCT 2017

Apple is considering ending the use of Qualcomm components in iPhones and iPads developed in 2018, as the fallout between the two companies continues to escalate.

According to The Wall Street Journal (WSJ), Apple is looking to build its products with modem chips from Intel and possibly Mediatek, potentially ending a relationship with Qualcomm which started a decade ago.

Apple used Qualcomm chips exclusively for its iPhones until 2016 when it also deployed Intel chips on its iPhone 7 and iPhone 7 Plus. In the recently launched iPhone 8 and iPhone 8 Plus, it used a mix of both.

The US-based vendor took the decision to explore Qualcomm-free products after the chip giant reportedly began to withhold software which was critical to testing its chips on iPhone and iPad prototypes in January, when a legal spat between the two companies began.

Should Apple go through with the plan to drop Qualcomm silicon, there could be severe ramifications for both companies.

Beyond the courtroom
At the moment, the dispute between the two companies relates to licensing and royalty payments, but losing Apple as a customer for its chips could result in a huge hit to Qualcomm’s business.

According to an estimate by Macquarie Capital, Qualcomm sold $3.2 billion worth of modem chips to Apple in 2016, accounting for 20 per cent of its total chip sales.

This year the figure is expected to drop to $2.1 billion following Apple’s deal with Intel.

Qualcomm, currently the biggest chip provider for smartphones, told WSJ it is committed to supporting Apple’s new devices and added its modem can be used for the next-generation iPhone after being fully tested and released to Apple.

WSJ sources also noted Apple’s plans to exclude Qualcomm chips could still change, though the company (theoretically) would need to decide on a change in supplier by June, three months before new iPhone models typically ship.

There would also be risks for Apple: Qualcomm is considered the leader when it comes to chip performance, and both Intel and Meditek products are thought to lag in terms of performance.

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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