In one fell swoop, Apple cut the Gordian knot of 5G modem supply and it is smooth sailing from here, as it paid Qualcomm undisclosed amount to settle the patent litigation and secure a multi-year contract for 5G iPhones.
“It’s personal. I don’t see anybody who can bridge this gap,” tipped the WSJ recently about Apple and Qualcomm CEOs relationship but the big boys ironed out their differences quickly. Apple could have tried Intel, Samsung or Huawei, but each of those choices comes with drawbacks.
Intel threw in the towel on 5G modem development when it learned that Qualcomm resolved its patent issues with Apple, while America’s homeland security institutions would balk at Huawei’s involvement due to geopolitical considerations. Despite all rumors, Huawei company reps said during its Analyst Summit 2019 yesterday that they have “no communication with Apple on 5G modems.”
Samsung, on the other hand, simply can’t make enough of its own 5G modems to exclusively supply huge customer like Apple. It recently declined Apple’s advances for its Exynos 5100 5G modem. Not only does the company need its production for the Galaxy S10 5G that is now shipping, but it could very well need it for the Note 10 Pro, too, and others down the line. According to one “electronics industry official” there:
Apple inquired about the supply of 5G modem chip from Samsung Electronics System LSI division. However, we know that Samsung Electronics System LSI answered that the supply volume of its smartphone 5G modem chip is insufficient.
Well, the most renowned Apple supply chain analyst, Ming-Chi Kuo of TF International Securities, has spoken, and Apple will seemingly hedge its Qualcomm bets with Samsung as a side dish. If you are wondering why, Apple is most likely planning to use the more advanced Qualcomm modems in placed where mmWave spectrum 5G networks are being established, while Samsung’s likely cheaper solution will remain for the sub-6 GHz crowd.
Apart from all these juicy dual supplier predictions, Ming-Chi Kuo is advocating for a fall 2020 release date of the future 5G iPhones. That’s the same timeframe as before but this time around, Apple is in a position to use the best that the 5G market can offer without triggering the NSA, CIA and other three-letter agencies’ wrath.
South Korea just launched its nationwide 5G network, with the Galaxy S10 5G being its poster child. Upon the phone’s release there, Korea will have all of its largest networks offering 5G plans. In fact, Korea Telecom announced three 5G price tiers. Among those, there is a “Super Plan” that offers truly unlimited 5G data without speed caps, and this one will go for the equivalent of $70, a pretty good price no matter how you slice it. In fact, the Super 5G Plan is somewhat cheaper than the current unlimited 4G LTE plans in Korea, so the 5G future seems bright, and we are expecting more and more 5G handsets to enter the fray this year, especially towards the tail end of 2019.
A true nationwide shift to 5G networks is not happening this year in the US anyway, so iPhone users won’t be missing all that much until then. Next year, however, most of the flagship phones of the spring season will probably have some sort of 5G connectivity support, be it with a Qualcomm, Samsung or Huawei modem, and Apple could feel the pinch in that regard.
Had Apple gone alone in developing a 5G modem, either by acquiring Intel’s wireless modem assets, or starting from scratch, it would have taken it years to reach a sufficiently good unit that is worthy to put in millions of iPhones. Wireless connectivity modems are perhaps the most complex of chips in a phone, and 5G ones require so much filters and software control to avoid interference and still be backwards compatible that this option would have meant either a lot of extra expenses for Apple in order to deliver a 5G iPhone in 2020, or falling behind the competition by launching one that is a cycle or two behind.
“Apple knows our phone number, we are still in San Diego,” tipped Qualcomm recently, giving a glimmer of 5G hope, and patching thing up with Qualcomm turned to be the smartest solution, just as we expected. There you have it – Apple resolves the bad blood between the companies, Qualcomm is likely to assist it with the 5G push, and Samsung will be its sidekick. The 5G future is so bright, we have to wear shades. According to Kuo, the launch of the 5G iPhone is expected to unleash a big upgrade cycle for Apple, and he upped his forecast for iPhones sold in 2020 to the whopping 200 million, from the current 190 million prognosis.
