See the update at the bottom of the piece.
The iPhone 15 was expected to be the first lineup to use an in-house Apple 5G chip instead of the Qualcomm ones used in current models. A recent report suggested that this won’t be the case because Apple has hit problems with the design, but a new analysis suggests that this is only half-right.
Which is to say, there is a problem with the Cupertino company’s attempt to dump Qualcomm in favor of an Apple modem chip, but it’s a legal one, not a technical one …
Background
Apple has for years used Qualcomm modem chips – the radio chips which provide mobile data connectivity. When the iPhone 12 was launched in 2020, it again relied on a Qualcomm chip to provide the new 5G capabilities.
The relationship between Apple and Qualcomm has, however, been a fraught one. In particular, the iPhone maker was upset that Qualcomm was “double-dipping” by selling the company a chip, and then demanding a patent royalty fee for use of the tech within that same chip.
Things got messy. Qualcomm accused Apple of blackmail. The CEOs of the two companies had “hostile” meetings. Qualcomm refused to sell chips to Apple for the iPhone XS and XR. Both companies set aside earlier talk of settlement and pledged to fight it all the way. A multibillion-dollar trial began.
Apple’s plan was to temporarily switch from Qualcomm modem chips to Intel ones while it worked on its own radio chip design. Unfortunately, that plan fell apart when Intel announced that it was exiting the 5G smartphone modem business. Since it would be a few years before Apple’s own chip design was ready, that left the company with no choice but to make up with Qualcomm. An out-of-court settlement was quickly reached.
In order to accelerate work on an in-house 5G modem chip, Apple bought Intel’s modem division.
Apple 5G chip problem
With the headstart provided by acquiring Intel’s tech, Apple was recently reported to be on track for having its own 5G chip design ready for production in next year’s iPhone 15.
However, Apple analyst Ming-Chi Kuo said this week that this was no longer the case, and said this was because of a “development failure.”
But a new report suggests that the problem isn’t with the chip development itself – rather, a legal problem over patents.
My latest survey indicates that Apple’s own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company’s previous estimate of 20%).
In order to design its own chip, Apple needed to invalidate two Qualcomm patents. This battle rumbled on despite the settlement, going all the way to the US Supreme Court. Unfortunately for Apple, the court rejected its appeal bid.
Patently Apple suggest that this, not a technical hitch, is why Apple won’t be able to use its own 5G chip next year – because it would infringe the two Qualcomm patents. The site links to a lengthy Foss Patents analysis that does indeed seem to support this interpretation – suggesting that Qualcomm would sue Apple and win.
Apple still has Qualcomm patent licences in place at present, but the two sides don’t look anywhere close to reaching an agreement on the appropriate payment to renew them.
In a hypothetical 2025 or 2027 Qualcomm v. Apple infringement litigation, the two above-mentioned patents would most likely be asserted again. Frankly, I’d be surprised if they weren’t. The PTAB rejected Apple’s validity challenge, and Apple’s appeal went nowhere due to a lack of standing. Unless Apple can dig up some previously undiscovered prior art of enormous strength, those patents are going to be hard to challenge.
Apple has been working on its own design of modem chip for many years, and has some of the best chip designers in the world. It then acquired Intel’s modem know-how. It seems entirely feasible that this would have enabled it to develop an Apple 5G chip by next year.
If it’s accurate that this chip will no longer be used next year, the question then is: Is this a technical problem, as Kuo claims, or a legal one, as the Foss Patents analysis suggests?
Kuo has in the past been a reliable source of supply-chain information, but has more recently taken to posting more guesses and speculation than things grounded in fact. Additionally, supply-chain data may well provide reliable information on what Apple has planned, but not why.
The legal explanation makes more sense to me anyway, but the smoking gun here is the timing. On June 27, Apple’s attempt to invalidate Qualcomm’s patents is thrown out; the very next day, on June 28, the plan to use the iPhone maker’s own 5G chip next year is reportedly abandoned.
Where do things go from here? Ultimately, it seems likely that Apple will have to renew the patent licences, and it’s looking like Qualcomm holds all the chips (sorry not sorry) when it comes to negotiating the fee. Apple will pay, and will then be free to use its own 5G chip.
Update: To add to the intrigue, Qualcomm tells us that the two patents in question are not 5G-specific:
Photo: Frederik Lipfert/Unsplash
On June 27, the U.S. Supreme Court declined to hear Apple’s bid to revive its legal effort to cancel two Qualcomm patents – an effort that Apple began before the 2019 global settlement between the two companies. The two Qualcomm patents the Supreme Court declined to review are valuable inventions that improve the look-and-feel user experience and have been widely deployed for years; contrary to some recent reports, though, they have nothing to do with 5G modems.
