Apple Held Talks With Samsung And MediaTek To Replace Qualcomm

Dhir Acharya - Jan 15, 2019

During its Friday testimony to the US Commission, Apple confirmed that it talked with Samsung and MediaTek to replace Qualcomm as its suppliers.

Apple talked with MediaTek, Samsung Electronics, and its current partner Intel about providing 5G modem chips for iPhones models in 2019. The Cupertino-based company confirmed this information.

On Friday, Apple revealed this discussion when testifying on trial before the US Federal Trade Commission. Accordingly, Apple exclusively used Qualcomm chips for its iPhones from 2011 to 2016. In 2016, it started splitting orders between Qualcomm and Intel. In 2017, with the iPhone XS, XS Max and XR, Apple turned to Intel for the entire order, dropping Qualcomm.

During the testimony, Tony Blevins, supply chain executive at Apple, said the company is taking Samsung and MediaTek into consideration for supplying c5G chips for its 2019 iPhones. Qualcomm is no doubt the leader in 5G wireless communication, and in 2019, the giant chipmaker will power 5G phones from major brands like Samsung, Xiaomi, and OnePlus.

Intel supplies chips for the iPhone XR, XS, and XS Max

The iPhone maker stopped ordering from Qualcomm, claiming it’s charging unusually high fees for patent licensing and over-protecting its dominance in the chip-making industry. After Apple and its partner used Qualcomm, FTC followed filed a lawsuit accusing the company of not licensing patents to other chip makers as an anti-competition practice.

It was also confirmed in the testimony that Apple searched for multiple suppliers, but chose to sign an exclusive agreement with Qualcomm due to the offer of deep rebates in exchange. In 2013, the company canceled its order with Intel involving the iPad Mini 2 modems because it did not want to lose the rebates Qualcomm offered. Later that year, Apple’s “Project Antique” began with the aim to secure a second supplier.

As a result, in 2016 and 2017, Intel became Apple’s second supplier, responsible for powering the three latest iPhone released last year. Regarding this, Blevins said the company did not want to completely shift its order to Intel, instead, it wanted both Intel and Qualcomm.

Blevins continued by admitting that holding talks with its rival Samsung is not the ideal scenario. But Intel’s 5G modem won’t be ready before 2020, so Apple had better find a way or take the opportunity cost.