Apple To Use Intel Cellular Modems In 70 Percent Of 2018 iPhones, 100 Percent In 2019

[Arkain2K]

Qualmcomm's bottom line gonna take a serious hit.

We all knew this was gonna happen sooner or later after the fallout between the two behemoths over patent licensing.

Apple To Use Intel Cellular Modems In 70 Percent Of 2018 iPhones, 100 Percent In 2019
byDylan Martin on April 26, 2018

Apple reportedly is planning to use Intel cellular modems for 70 percent of its new iPhones coming out this fall and 100 percent of iPhones in 2019.

Citing a source familiar with Apple's plans, a report from Fast Company Wednesday said Intel potentially could supply more than 70 percent of iPhone modems this year if it can deliver under a certain timeline and budget. If Intel falls behind, Qualcomm may supply more than the 30 percent of modems it's currently slated to deliver this year, according to the report.

Apple is taking a wait-and-see approach because this is the first year Intel is handling the fabrication process for its modems after it had been previously handled by TSMC, which had been fabricating Intel's modem chips since Intel acquired Infineon's Wireless Solutions unit in 2010, Fast Company said. The publication's source said Intel has yet to reach a satisfactory yield rate for modem chips, but that Intel engineers are confident they can sort out issues before production ramps up.

Should Intel's production run meet Apple's expectations, the smartphone giant plans to use Intel's modems for 100 percent of its phones next year, according to the report. Intel first started supplying some modems to Apple for the iPhone 7 in 2016 after Qualcomm had acted as the main iPhone modem supplier for the previous five years.

Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, told CRN that the potential move would be good news for Intel after a report earlier this month said that Apple is planning to ditch Intel CPUs for Mac computers as early as 2020.

"If they're able to pull this off and it does happen, it puts them in a much stronger position to go to other phone OEMs potentially," he said.

However, Venero added, Intel needs to make sure it doesn't run into more security snafus like it did with the Meltdown and Spectre side-channel vulnerabilities found in its CPUs earlier this year.

"Hopefully as Intel goes into this relationship with Apple, they are very cognizant that there are no security flaws in that Intel chipset, like we've seen with Spectre and Meltdown. It would be a disaster," he said.

https://www.crn.com/news/components...percent-in-2019.htm?google_editors_picks=true

 

[Arkain2K]

Qualcomm caps phone licensing fees, hopes for Apple settlement in 2018
Jeremy Horwitz@horwitz April 26, 2018

Chipmaker Qualcomm is signaling that it’s ready for a truce in its ongoing patent licensing dispute with Apple, as CEO Steve Mollenkopf hit CNBC’s airwaves today to predict that the companies will resolve their issues by the end of 2018. His comments come shortly after Qualcomm announced that it’s slashing its patent licensing fees, and therefore its profit forecasts, in apparent response to an Apple lawsuit and international regulatory actions.

While Mollenkopf noted that the Qualcomm-Apple case is still making its way through the courts, he suggested that “legal milestones” coming this summer are putting pressure on both companies to settle. “There will be a decision one way or the other,” he said, “either through the courts, or in the way that I think everybody would prefer, in a settlement, here and before the end of the year if we’re lucky.”

CNBC asked whether Apple CEO Tim Cook’s upcoming June deposition in the lawsuit provided a particular incentive for near-term settlement. “I think in all cases, people don’t like to have legal risks hanging over their heads,” Mollenkopf said, “and as you get closer to the legal milestones, the perspective of both companies — including Qualcomm — is such that I think the environment gets better to get a settlement.” He mentioned that the companies continue to actively communicate, and that Apple’s response has been “very consistent with our view and optimism that we’ll be able to get this done and delivered in fiscal year ’19. There’s just too much, too many reasons to get this settled.”

Mollenkopf interestingly pronounced the word “many” like “money,” hinting at the $1 billion dollar financial basis of the dispute. While Qualcomm’s patent licensing terms have caught the attention of U.S. and foreign governments, the core issue is over the amount of fees paid by licensees, specifically whether or not its licensing rates are “excessive.”

Previously, each phone maker paid Qualcomm a percentage of each phone’s selling price, enabling Qualcomm to collect significantly more on a $1,000 phone than a $300 phone, even if both phones used the same Qualcomm components. Apple complained that its payments to Qualcomm rose with its phone prices, even though new premium features were coming from non-Qualcomm innovations. Under the newly announced licensing strategy, Qualcomm will cap each phone’s basis price at $400, enabling cheap phones to pay a lower rate without penalizing premium phone makers. Major licensee Samsung has apparently already received a rate cut, reducing Qualcomm’s licensing forecasts by several hundred million dollars.

“We are really working on technology that’s important,” Mollenkopf said, acknowledging recent U.S. government actions to protect the company from a takeover by foreign-owned rival Broadcom. “On the other side, we also say, this is very valuable technology, and we need to make sure we can deliver that value to our shareholders. And that’s what the debate is about, whenever we have discussions with a licensee.”

Even in the current LTE generation, Apple has not been able to fully stop using Qualcomm modems in its iPhones. Fast Company reported yesterday that Apple has modified its plan to cut Qualcomm wholly out of its upcoming 2018 iPhones, and now expects to use at least 30 percent Qualcomm modems — perhaps more if production-challenged rival Intel fails to deliver all of the modems Apple needs. Qualcomm is similarly believed to have a major lead over Intel in the engineering and production of 5G modems, which will be necessary for next-generation iPhones starting in 2019 or 2020.

https://venturebeat.com/2018/04/26/...sing-fees-hopes-for-apple-settlement-in-2018/

 

[Madmick]

Unless I'm overlooking something this is more significant from a legal standpoint than a technological or even a market landscape standpoint.

 

[mrbaapt]

No comment from Apple or Intel. This looks like speculation.