It’s been a particularly good day for Apple. In addition to seeing its biggest rival tank the rollout of its most anticipated 2019 product launch, Apple also settled a two-year legal battle over royalty and patent disputes with chip giant Qualcomm. The Cupertino-based company agreed to pay the chip manufacturer an undisclosed amount of money, but also got something pretty important in return: Apple managed to strike a deal to use Qualcomm’s 5G modems in its future iPhones.
Before the deal, the future of the first 5G-enabled iPhone was more uncertain. In light of the Qualcomm quarrel, Apple enlisted the help of the other big chip-maker Intel, whose XMM 8160 modem offers speeds of up to six gigabits per second. But delays in Intel’s production pushed the estimated timeline for the first 5G iPhones from 2020 toward 2021. With an industry-leading 5G chipset at its disposal, Apple could put the 5G iPhone back on his original timeline, though Apple analyst Horace Dediu tells Inverse that it’s too late for the company to incorporate it into the 2019 roster.
“The production line for this year’s phone was probably in development over the last year and initial test runs are likely to begin within weeks,” he explained. “The hardware design and components supply would have been frozen months ago. If there is a Qualcomm chipset version it would have been developed in parallel with any other version so that could be slotted for production.”
Dediu didn’t offer a prediction for when a 5G iPhone could come to market, because he’s unsure if Apple and Qualcomm ever designed a special 5G modem for future iPhone models. Without an open channel of dialog, it’s unlikely Apple has a 5G chipset ready to slot into their 2019 iPhone.
It’s also hard to see how there could have been much dialogue between the two companies before the settlement. Back in July 2018, Qualcomm’s CFO George Davis dropped a serious hint that talks between the companies had already soured.
“Apple intends to solely use our competitor’s modems rather than our modems in its next iPhone release” he said during an earnings call. “Intel is the only other company that supplies that module to Apple, making it likely that iPhones will soon use Intel modems exclusively.”
Qualcomm’s 2018 statement — that iPhones would “soon use” Intel modems exclusively — strongly suggests that, at the time, the partnership was on track to be phased out by this year. Re-starting their collaboration, then, will likely take some time.
2020 seems like the likeliest year, Krish Sankar, the managing director at investment bank Cowen, told Bloomberg. This is likely what Apple planned all along. While not many 5G networks are available right now, waiting all the way until 2021 would dampen demand and made Apple look like a laggard.
“We believe this opens up the possibility of Qualcomm supplying 5G modems to future iPhones and helps [Apple] have a 5G phone ready by [the second quarter of 2020].”
So, while it might come as a disappointment to some that Apple and Qualcomm’s detente didn’t come in time to benefit 2019’s iPhone roster, we should also be grateful that Apple isn’t likely to rush the release, either. Once they do launch, this timeline will help Apple ensure that its first 5G iPhones actually work.