5g Apple will continue to use discrete Qualcomm 5G modems as their in-house modems experience problems

[captain_to_fire]

Qualcomm's stock price rose to 3% after Ming-Chi Kuo tweeted that Apple will still continue to use Qualcomm modems for the 2023 iPhones because of problems with their in-house modem development.

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Apple analyst Ming-Chi Kuo released some interesting information on Twitter today. Kuo said that his latest supply-side surveys are indicating that Apple has been unable to develop a custom 5G modem of its own, in time for the 2023 iPhone series (iPhone 15).

 

Due to the apparent development delays, Kuo believes that Apple will resort to using Qualcomm modems for the 2023 iPhones once again. Previously, Qualcomm executives had warned investors that it expected to lose up to 80% of the Apple business by 2023, as Apple planned to use its own chips instead.

 

The April 2019 settlement meant that Apple and Qualcomm entered a six year licensing agreement, with an option to extend for an additional two years. This essentially gave Apple until 2027 to develop and engineer an in-house solution. Meanwhile, Intel exited the modem business altogether, and sold off its assets and employees to Apple.

I'm not sure if the number of patents Qualcomm holds is the reason why Apple can't develop in-house modems but it's probably the reason. Historically even back to the iPhone 7 era, iPhones on Verizon and Sprint had better 4G LTE performance because they use discrete Qualcomm modem (MDM9645M) while the AT&T and T-Mobile iPhone 7's use the inferior Intel XMM7360 modem.

 

So Apple's dreams of being a vertical monopoly is not fully achieved yet but I'm glad that the iPhones next year will still use the superior Qualcomm modems. Looks like Apple just wasted $1bn after all. I'm not sure if having an integrated modem to the SoC will result to huge battery endurance as even now, the iPhone 13 Pro Max with its 4325 mAh battery and discrete Qualcomm modem has better battery life than the Samsung Galaxy S22 Ultra with an integrated modem and 5000 mAh battery.

 

[saltycaramel]

They “failed” to meet the 2023 iPhone deadline (and let’s not forget the iPhone is the live-or-die most important product in the universe for Apple’s business, so they can’t take big risks on it), I wouldn’t read that “it’s over, 1bln wasted” into that and I wouldn’t rule out that the 2032 Apple Glasses 10 years from now won’t have a 5G (or 6G) Apple Modem.

 

Not sure “monopoly” is the right word there, that’s just vertical integration. 

 

Not sure battery life gains, while relevant, are the only benefits Apple is after. There’s also getting control of your own destiny in one fundamental aspect of the devices, costs, efficiency on wearables with very small batteries, etc.

[captain_to_fire]

1 hour ago, saltycaramel said:

They “failed” to meet the 2023 iPhone deadline (and let’s not forget the iPhone is the live-or-die most important product in the universe for Apple’s business, so they can’t take big risks on it), I wouldn’t read that “it’s over, 1bln wasted” into that and I wouldn’t rule out that the 2032 Apple Glasses 10 years from now won’t have a 5G (or 6G) Apple Modem.

Qualcomm simply hold a lot of 5G patents and I doubt neither Qualcomm wants to license those patents nor Apple willing to pay for royalties.

 

 

[saltycaramel]

I also doubt Apple YOLO-ed 1bln and initially told Qualcomm they wouldn’t need them in 2023 without taking all of this (patent challenges, technical challenges, etc.) into consideration. 

[Obioban]

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So Apple's dreams of being a vertical monopoly is not fully achieved yet but I'm glad that the iPhones next year will still use the superior Qualcomm modems.

Such a weird statement. 

 

An additional player in the market (Apple) disrupts Qualcomm's near monopoly. If they're unable to do it (as opposed to it just being a year later), that really speaks to how entrenched Qualcomm's monopoly is-- good for nobody. Imagine where Qualcomm's SoCs would be if they didn't have Apple silicon pushing them along. 

 

Then, the assumption that the Qualcomm modem is superior to what Apple would have come up with. Why would you assume that? In all instances of Apple vs Qualcomm silicon that we've seen to date, Apple's is significantly better. 

[hishnash]

On 6/30/2022 at 3:07 PM, captain_to_fire said:

Looks like Apple just wasted $1bn after all.

would only be a waist if they never shipped a modem of their own.  Delaying 1 year is not the same as cancelling the project. 

[mr moose]

$1B to a company that has more than $300B cash in the bank and the ability to borrow a small nations worth of bank roll is not much of a dilemma.  

 

 

EDIT: actually looked it up, it's $51B cash on hand and the rest is in assets.   But the point still stands,  It's essentially like you or me buying a $50 screwdriver then not using it for a year.

[dizmo]

Researching something is very rarely ever a waste. You've still learned something along the way. 

 

Monopoly is also an odd term to use. 

 

On 7/1/2022 at 4:46 AM, Obioban said:

Such a weird statement. 

 

An additional player in the market (Apple) disrupts Qualcomm's near monopoly. If they're unable to do it (as opposed to it just being a year later), that really speaks to how entrenched Qualcomm's monopoly is-- good for nobody. Imagine where Qualcomm's SoCs would be if they didn't have Apple silicon pushing them along. 

 

Then, the assumption that the Qualcomm modem is superior to what Apple would have come up with. Why would you assume that? In all instances of Apple vs Qualcomm silicon that we've seen to date, Apple's is significantly better. 

Eh I don't think Qualcomm really cares. It's not like Apple is farming their SoCs out to other people. That point of view has never made sense to me. 

[Roswell]

On 6/29/2022 at 11:07 PM, captain_to_fire said:

So Apple's dreams of being a vertical monopoly

Yeah, god forbid Apple manufacturers their own parts for their own devices! Better call your local congressman!