Apple has put the iPhone ahead of distaste for the way Qualcomm does business in settling a legal dispute with the chipmaker.
Apple needs chips that would connect the iPhone to the 5G networks being introduced now or risk falling behind its rivals.
The company had bet on Intel Corp, but decided its would-be 5G supplier was not up to the task.
Photo: AFP
That led Apple back to Qualcomm — and spurred a sudden end to a long-running court fight over patents, component costs and royalties for one of the most critical parts of an iPhone.
Just before the settlement was announced on Tuesday, Apple’s lawyers were in a San Diego, California, courtroom saying that the component was just another method of connecting to the Internet.
In reality, Qualcomm’s modems are leading a potential revolution in mobile Internet — and Apple could have been forced to play catchup without them.
Intel has struggled for decades in the mobile sector.
It said that its 5G part was coming in phones next year, but within hours of Apple’s deal with Qualcomm, Intel announced it would end its effort to produce a 5G modem for smartphones.
Qualcomm has also said that it plans to have a better 5G modem ready by the end of the year — plenty of time for Apple to introduce a 5G phone in September next year.
The settlement clears Apple’s path to launching a 5G phone as early as next year.
Apple and Qualcomm’s agreement is a six-year pact, the companies said in a joint statement.
Gene Munster, a longtime Apple analyst and cofounder of Loup Ventures, believes that Qualcomm won the showdown, but it could be a short-term victory.
The chipmaker might lose Apple as a customer in three years, because it should be able to manufacture its own modems by then, Munster said.
In a separate statement issued yesterday, Qualcomm said that it has gained agreements with Apple’s contract manufacturers, including Taiwan’s Compal Electronics (仁寶), FIH Mobile (富智康), Hon Hai Precision Industry Co (鴻海精密) and Pegatron Corp (和碩), to dismiss the litigation between the companies.
Additional reporting by Lisa Wang
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