Reports indicate that Apple is developing iPads and iPhones slated for release next year which are not using components from Qualcomm. Currently the two tech firms are locked in a courtroom battle. Instead of using modem chips made by Qualcomm, Apple is said to be planning on using chips developed by companies such as MediaTek and Intel.
According to sources Qualcomm has declined to provide Apple with the software necessary to test chips in the prototypes of the iPad and the iPhone. Despite having been partners for a decade now, Qualcomm withheld the software following Apple’s decision to file a lawsuit earlier in the year in which the iPhone maker accused the chipmaker of abusing market dominance by unfairly blocking competitors.
Exorbitant patent royalties
Apple also accused Qualcomm of charging exorbitant patent royalties. Qualcomm has however said that the cellular modem chips that are set for use in the upcoming iPhone have undergone testing and been released to the Cupertino, California-based tech giant.
In the past Apple used modem chips designed by Qualcomm exclusively in the iPhone though that changed last year when it released the iPhone 7 of which some models had Intel chips. This year a mix of Intel and Qualcomm chips were used in iPhone 8 Plus and iPhone 8 which went on sale in September.
According to Stacy Rasgon, an analyst at Berstein, the move by Apple is to some extent expected since it is big enough to employ multiple contingency plans. Apple would also not be the first smartphone maker to abandon Qualcomm chips.
Multiple contingency plans
“Apple is big enough that if they want to support multiple paths, they can do that. Samsung did this too. A couple of years ago, Samsung designed Qualcomm out, but Qualcomm didn’t even know until it was close to time to ship,” said Rasgon.
If Apple moves ahead to do away with Qualcomm chips exclusively, the chipmaker would be impacted significantly. In 2016 the value of the chips that Qualcomm sold to Apple was $3.2