Apple and Qualcomm are locked in an extended legal battle right now that has seen the latter party attempt to block production and sales of the iPhone in China. Rumors had swirled that in response, Apple was looking to shed Qualcomm hardware from its phones. People claiming to be familiar with Apple’s plans are now saying that Cupertino is working on iPhones and iPads for next year that would be free of any Qualcomm hardware.
The reports indicate that Apple is considering using LTE modems that are sourced from Intel and/or possibly MediaTek. The sources making these claims say that the reason Apple is doing this is because Qualcomm is withholding software that is critical to testing chips inside iPhone and iPad prototypes. Qualcomm allegedly stopped sharing the software needed after Apple filed a suit in January that accused the company of using its market dominance to unfairly block competition and to charge massive royalty payments on its patents.
Qualcomm went on to add that the “modem that could be used in the next generation iPhone has already been fully tested and released to Apple." The company also stated that it is “committed to supporting Apple’s new devices.” If Apple does indeed pull Qualcomm chips from its products, the move could have significant impact on Qualcomm. Apple makes one of the most popular line of smartphones in the world and moves more devices in a month than some competitors sell in a year.
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People who claim to be familiar with Apple’s plans say that a decision could be changed (with regards to the next generation iPhone family) as to which modem supplier is used until June of 2018. That is three months before the next iPhone is likely to ship. It’s most certainly not out of the realm of possibility that this possible exclusion of Qualcomm chips is simply a way Apple is putting pressure on Qualcomm in its suit with the company. Apple certainly pays a lot of money to Qualcomm, with reports indicating that it will spend $2.1 billion on modem chips with Qualcomm this year making up 13% of Qualcomm’s total chip revenue. Apple spends more on royalty payments than it does hardware purchases to the tune of $2.8 billion in royalty payments last year.
Apple has reportedly been working on designing its own chips to replace Intel and Qualcomm hardware inside its smartphones, but there is no word on when those hardware designs will be completed.