Intel Exiting 5G Smartphone Modem Business, Won't Make 5G iPhone Chips at All

[mi7chy]

Shame Intel hasn't learned from breaking antitrust laws in the past. Shouldn't have colluded with Apple against a competitor.

https://www.agner.org/optimize/blog/read.php?i=49

https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp.

 

[JPack]

I understand why the 2019 iPhone can't get 5G, but why can't it get the Qualcomm 4G modem? It's not like it would be at all out of character for Apple to have designed the phone to work with Qualcomm modems even if they didn't have access to them at the time.

Because contracts and engineering.

Intel doesn't reserve fab space unless it knows it has a customer. Apple has already signed a contract with Intel.
[doublepost=1555465783][/doublepost]

QC market cap is 85 Billion. Apple should just buy them and end all their problems. Of course it would have been 20% less before the announcement.I think that owning QC patents would be worth it.

Think for a second. Do you believe the FTC or the DOJ would allow for such a monopoly? Nope.

 

[Gutwrench]

I hope Apple’s modem chip rolls out better than Apple Maps.

 

[echo44]

[

Think for a second. Do you believe the FTC or the DOJ would allow for such a monopoly? Nope.[/QUOTE]
Like Amazon, Facebook and Google?
Almost forgot microsoft Windows that runs on 75% of all computers in the world

 

[Degerz]

To reduce its reliance on Qualcomm, Apple is working on its own chip technology, but Apple's own modem chips aren't expected to be ready until 2021.

The very fact that Apple themselves have entered into a 'multi-year chipset supply agreement' along with an option for a 2 year licensing extension is an admission from Apple that they cannot realistically hope to compete with giants such as Qualcomm or Huawei ...

If and when Apple are ready to deploy their own in-house designed 5G modems, it likely won't be until 2022 at the very earliest or more realistically until 2023 ...

 

[Trusteft]

Smart move by Intel. What they said makes complete sense.
Apple's agreement with QC is irrelevant. It doesn't matter if Apple reached the agreement before or after Intel decided to quit the 5G phone market.
Since Apple has already decided to do their own thing by 2021 and Intel will/would continue to provide with 4G Apple till at least 2019, Intel is basically losing about a year worth of sales to Apple. Considering the expenses and that possibly they had no other customer for the chips, might as well get out now.
20-21 small difference.
Smart move.

 

[I7guy]

Nah. Qualcomm doesn’t need to cave. They get revenue from every other smartphone manufacturer in the world.

Apple supposedly had their own modem team and Intel as a back up. Not to mention billions. Clearly, Apple didn’t think the trial was worth betting the farm.

Was it Warren Buffet who said this about negotiation: "nobody walks away from the table happy". And while I don't know if there was a bit of irony when you posted, "apple caved", the truth probably lies in-between that and "qualcomm caved".

 

[ersan191]

This is so transparent - Intel sucked at making the modems, Apple said screw it we’ll do it ourselves, and they completely folded to Qualcomm’s demands while they work on them. Two more years of overpaying for modems and they’ll have their own.

 

[Roger67]

Except Intel is known for devising evil that eventually gets them heavily fined. If it comes out your theory holds water, both companies will eventually be fined by regulators. That said, Cook knows what he's doing if history is anything to go by.

Why would it be illegal to court suppliers or get new business?. It's not even unethical. It's business.

 

[torana355]

Good news for iPhone users, Apple was cutting off thier nose to spite thier face using the inferior Intel modems.

 

[goobot]

Just a brief comment from an ex Intel engineer: Intel does not care about Apple, for them it’s the 0.001% of their business and not a high profit business. Apple had their own agenda and Intel wasn’t going to concede in a very low profits customer. That’s all, now Intel can go to their own business.

You’re right but mobile is the future and intel knows that. This was going to be something to help them move into that space.

 

[1144557]

If Apple wanted to save money, they'd do it in house. Period.

The fundamental problem is that Qualcomm, and Intel, and anybody else's discrete modem solution requires a separate chip. That's money, board space, power consumption and decreased reliability.

That's how Qualcomm's Snapdragon is made, the baseband is integrated into the application processor.

That would be under the assumption Apple saw the Qualcomm mess years in advance to start prepping their own 5g modem and knew Intel would fail.

That's a lot of what ifs. They aren't ready in house and likely wouldnt be for years, yet 5g is 2019/2020 and they cannot afford to not put it in their phones.

If you were Apple would you rather rush your own modem and drop a butt ton of money into it and new hires etc trying to get it done in 1.5 years roughly, quite a few billion (its not just the silicone, its the FCC, testing etc etc etc) or settle with QC and use their chips?

There is no financial way in the short term where Apple needs to add 5g in the next year or so that doing theirs in house would be cheaper than using QC.

Is that their ultimate goal to use their own chip? Absolutely, I have 0.00% doubts. But not feasible this close to needing them next year in mass scale.

 

[StralyanPithecus]

You’re right but mobile is the future and intel knows that. This was going to be something to help them move into that space.

All the mobile devices need an infrastructure, and that infrastructure is mostly built by Intel and similar companies, that’s the big money almost nobody knows...

 

[Unregistered 4U]

People who assume it is too late to put in the upcoming iPhone cycle

...are correct. And, are showing an understanding about the complexity of meeting tight schedules ahead of releasing a physical product this fall.

 

[Apples Apples Everywhere]

Its still a monopoly in the marketplace. Thats not good, at all. I am sad that  has settled.

Agreed.

I bet Qualcomm is still forcing its terms on Apple.

 

[sw1tcher]

This is so transparent - Intel sucked at making the modems, Apple said screw it we’ll do it ourselves, and they completely folded to Qualcomm’s demands while they work on them. Two more years of overpaying for modems and they’ll have their own.

Umm... Apple signed a 6 year licensing deal with Qualcomm with option to extend that for an additional 2 years. So it's a 6-8 year deal.

 

[JPack]

Like Amazon, Facebook and Google?
Almost forgot microsoft Windows that runs on 75% of all computers in the world

Ever heard of Walmart, Costco, eBay, or Best Buy? How about Twitter, Snapchat, Reddit, or WeChat?

Apple and Qualcomm own over 90% of the SoC market share in the U.S.

Microsoft lost its anti-trust case with the government. If Apple were allowed to buy Qualcomm, consumers would be buying chips from Apple or Apple. MediaTek is virtually non-existent in the U.S.

 

[AEWest]

Sounds like Qualcomm caved, they have been hurting for apple's lost revenue.

What I think happened is that Intel told Apple some time ago that 5G was a no go. Timmy then told Intel to keep this info under wraps until the Qualcomm issue was settled.

Apple was all set to fight Qualcomm in court, but since they no longer had a dance partner for 5G, they bluffed as much as possible to cut the best deal they could with the tough hand they were dealt.

 

[magicschoolbus]

Apple needs to start making their own parts. seems a hardware war is getting more and more aggressive.

 

[Apples Apples Everywhere]

What I think happened is that Intel told Apple some time ago that 5G was a no go. Timmy then told Intel to keep this info under wraps until the Qualcomm issue was settled.

Apple was all set to fight Qualcomm in court, but since they no longer had a dance partner for 5G, they bluffed as much as possible to cut the best deal they could with the tough hand they were dealt.

Exactly right.

I feel like the insiders all knew. Huawei was even offering 5G to Apple through the press.

 

[cmaier]

Excellent.

Qualcomm returns, *and* Intel exits.

This is a massive win for us.

Yep. Nothing like lack of competition to result in the best product.

Of course in this case it will turn out fine when Apple brings these chips in-house.
[doublepost=1555468815][/doublepost]

Because contracts and engineering.

Intel doesn't reserve fab space unless it knows it has a customer. Apple has already signed a contract with Intel.
[doublepost=1555465783][/doublepost]

Think for a second. Do you believe the FTC or the DOJ would allow for such a monopoly? Nope.

Why not? It wouldn’t be any more of a monopoly than now, and the government generally doesn’t have a problem with vertical mergers.
[doublepost=1555468909][/doublepost]

Umm... Apple signed a 6 year licensing deal with Qualcomm with option to extend that for an additional 2 years. So it's a 6-8 year deal.

Your statement is a non sequitor. When apple makes their own chips in 2 years they will still need a patent license from Qualcomm. (In fact, since they don’t need one when they buy Qualcomm chips, and Intel will be going away soon, the ONLY time they need a license is when they make their own chips)

 

[jeremiah256]

Plus Huawei’s CEO said the other day they’d be willing to work with Apple on 5G.

That's a non-starter.

Both Congress and the Trump Administration are in agreement to actively discourage use of any Huawei communications equipment for anything, not only within the United States, but with all allies. Maybe Apple could make Huawei modem phones for China and some other nations, but in the U.S. market? Not going to happen.

Was it Warren Buffet who said this about negotiation: "nobody walks away from the table happy". And while I don't know if there was a bit of irony when you posted, "apple caved", the truth probably lies in-between that and "qualcomm caved".

Intel no doubt gave all it's 5G modem customers a heads up as soon as they decided this was the path they were taking. It allowed Apple time to conclude business with Qualcomm and move forward. From statements from Qualcomm about what they 'knew' about Apple already testing their modems, I'd guess they also may have had some decent intel on both Apple and Intel's situations, so I'd guess the final settlement was more tilted toward Qualcomm's side.

Hurts Apple's pride in the short term, but overall, this isn't really about Apple or Qualcomm. Bottom line, Intel, once again, has let Apple down. Apple is probably doing everything, short of raising hell-spawn, to divorce themselves from relying on Intel as fast as they can.

Edit: @AEWest said it more concisely than I.

 

[JPack]

What I think happened is that Intel told Apple some time ago that 5G was a no go. Timmy then told Intel to keep this info under wraps until the Qualcomm issue was settled.

Apple was all set to fight Qualcomm in court, but since they no longer had a dance partner for 5G, they bluffed as much as possible to cut the best deal they could with the tough hand they were dealt.

You didn’t need to be a rocket scientist to know Intel didn’t have 5G. They didn’t demo a single or non-working 5G chip. Intel showed nothing at MWC2019. The chip they planned was supposed to be built on 10nm to be delivered by 2020.

In all likelihood, Qualcomm sat back waiting for Tim’s phone call.

 

[Baymowe335]

Nah. Qualcomm doesn’t need to cave. They get revenue from every other smartphone manufacturer in the world.

Apple supposedly had their own modem team and Intel as a back up. Not to mention billions. Clearly, Apple didn’t think the trial was worth betting the farm.

Look at the stock. Qualcomm needed this to work out. When it did, the stock jumped 30% while AAPL didn’t even flinch. This was HUGE for Qualcomm and they came to their senses and likely edited their pricing model. Apple wouldn’t have dropped everything if the pricing model stayed the same. Doesn’t make sense.

The market had priced in a lot of doom for QCOM and when this was resolved, the stock rocketed. I think that proves it.

 

[JPack]

Why not? It wouldn’t be any more of a monopoly than now, and the government generally doesn’t have a problem with vertical mergers.

Right now, Apple and Qualcomm supply over 90% of the SoCs for the U.S. If Apple were allowed to buy Qualcomm, it would be one supplier. It’s the same reason why Intel wouldn’t be allowed to buy AMD.