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Apple considered Samsung, MediaTek to supply 5G modems for 2019 iPhones

Reuters 

By Stephen Nellis

(Reuters) - held talks with <005930.KS> and <2454.TW> along with existing vendor Corp to supply modem for 2019 iPhones, according to an Apple executive's testimony at a trial between Inc and the on Friday.

Between 2011 and 2016, Apple relied on San Diego-based as the sole supplier of such chips, which help iPhones connect to Starting in 2016, Apple split the business between and Qualcomm, but in 2018, Apple moved solely to for its newest phones.

But Apple testified on Friday that Apple has also considered MediaTek and Samsung, one of its largest rivals in the market, to supply the for the next generation of known as Those networks are expected to start rolling out this year and provide faster data speeds than current

The FTC is suing alleging the engaged in anticompetitive patent licensing practices to preserve a dominant position in the premium modem chip market.

On the stand at a federal courthouse in San Jose, California, Blevins testified that Apple has long sought multiple suppliers for modem but signed an agreement with Qualcomm to exclusively supply the chips because the offered deep rebates on patent license costs in exchange for exclusivity.

In 2013, Apple broke off work with Intel to start supplying modems for the Mini 2 because Apple would lose its rebates by using Intel's chips, rendering Intel's products "economically unattractive" overall.

Later that year after cost negotiations with Qualcomm did not go as Apple hoped, Apple kicked off "Project Antique" to secure a second modem supplier, Blevins testified.

By 2016 and 2017, Apple introduced Intel's modems in some of its iPhones but also still used Qualcomm chips. But Apple's lawsuit against Qualcomm filed in early 2017 caused their business relationship to change "in a very profound and negative manner," leading to using only Intel's modems for the phones released last year.

"The entire concept of Project was to find a second supplier. No offence to (Intel) but we don't want to be single supplier with them. We wanted both Qualcomm and (Intel) in the mix," Blevins said. Blevins also testified Apple considered making Intel the sole supplier of modems for the Apple Watch, which added 4G connectivity in 2017 using Qualcomm chips.

Blevins said that talking with Samsung, whose Galaxy and Note devices compete against the iPhone, is "not an ideal environment" for Apple, but that Samsung is currently the largest to Apple.

Blevins did not say whether Apple had reached a decision on a or whether it would release a 5G in 2019. Citing sources, previously reported that Apple would not release such a phone until 2020.

(Reporting by Stephen Nellis; editing by and James Dalgleish)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, January 12 2019. 03:21 IST
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