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(Reuters) – Apple has held talks with Samsung Electronics and MediaTek along with Intel's current supplier to provide 5G chips for the 2019 iPhones, according to an Apple executive's testimony in a trial between Qualcomm and the Federal Commission United States of America.
Between 2011 and 2016, Apple counted on Qualcomm, based in San Diego, as the only supplier of these chips, which help iPhones to connect to wireless networks. Starting in 2016, Apple split the deal between Intel and Qualcomm, but in 2018, Apple moved solely to Intel on its newest phones.
But Apple supply chain executive Tony Blevins said on Friday that Apple also considered MediaTek and Samsung, one of its biggest rivals in the smartphone market, to provide the chips for the next generation of networks without known as 5G. These networks are expected to start rolling out this year and provide faster data speeds than today's 4G networks.
The FTC is suing Qualcomm alleging that the chip supplier has engaged in anti-competitive patent licensing practices to preserve a dominant position in the premium market for modern chips.
At a federal court stand in San Jose, Calif., Blevins testified that Apple has long sought several modern chip suppliers, but has signed an agreement with Qualcomm to provide the chips exclusively because the vendor offered deep discounts on license fees patent in exchange for exclusivity.
In 2013, Apple halted work with Intel to begin providing modems for the iPad 2 Mini, because Apple would lose its rebates using Intel chips, making Intel products "economically unattractive" overall.
Later that year, after cost negotiations with Qualcomm did not go the way Apple expected, Apple started the "Old Project" to secure a second modem vendor, Blevins said.
In 2016 and 2017, Apple released the Intel modems on some of their iPhones, but also used Qualcomm chips. But Apple's lawsuit against Qualcomm, registered in early 2017, has caused its business relationship to change "in a very deep and negative way," leading to using only Intel's modems for the phones launched last year.
"The entire concept of Project Antique was to find a second supplier. No offense to (Intel), but we do not want to be a single supplier with them. We wanted both Qualcomm and (Intel) in the mix, "Blevins said. Blevins also testified that Apple considered Intel the only modem vendor for Apple Watch, which added 4G connectivity in 2017 using Qualcomm's chips.
Blevins said that talking to Samsung, whose Galaxy and Note devices compete against the iPhone, "is not an ideal environment" for Apple, but that Samsung is currently the largest supplier of components to Apple.
Blevins did not say whether Apple had come to a decision on a 5G modem vendor or would launch an iPhone 5G in 2019. Citing sources, Bloomberg previously reported that Apple would not launch that phone until 2020.
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