This is actually a really good offer for both Apple and Huawei when looking at it rationally, assuming if it is true of course.
Apple currently has patent disputes with both Samsung and Qualcomm (none with Huawei). If Intel fails to deliver, the only option left would be MediaTek and Huawei, Huawei being the much stronger and mature product. Furthermore, modem is not something that is really visible to the end user and will have no impact on Apple trying to develop modems in house, so the supplier really does not matter if the functionality is there. The only downside is security concerns, Apple may well sell multiple versions of their phone with different modems for different markets.
Huawei gains some quick cash, and it also improves their reputation. If their modems are used by Apple, Apple would surely have conducted a through security analysis.
While Apple and Huawei are certainly competitors, their overlap is relatively small. Both Apple and Huawei's biggest competitor in Europe and India is Samsung. In the U.S. there is zero overlap. In China both Apple and Huawei compete against a slew of other Chinese manufacturers.