For Apple, Qualcomm and Intel, 2019 is destined to be an extraordinary year. Apple and Qualcomm’s two-year patent litigation was finally settled last month, and Intel also announced its withdrawal from the 5G modem market in a timely manner.
I thought that the “compassion and entanglement” between the three companies was settled in this way, but things are far from simple.
On Wednesday, foreign media revealed the reasons for Apple and Intel to part ways in the 5G baseband business, and Apple’s self-developed 5G modem has also landed.
Dissatisfied with Intel has long buried the seeds
In 2016, Apple released the iPhone 7 series with two versions of the baseband: Qualcomm MDM9645 & Intel XMM7360. Apple’s move is to ease the reliance on Qualcomm’s baseband, and thus adopts a dual-vendor strategy and cooperates with Intel.
However, Apple’s dual-vendor strategy did not bring a win-win result – Qualcomm’s baseband device performed 30% better than the Intel baseband version; this caused Apple to limit the Qualcomm baseband’s network speed to balance the two Differences in usage between versions of devices. In fact, the shortcomings of Intel’s strength have already begun to appear at that time.
At the beginning of 2017, Apple is preparing to launch the new iPhone (iPhone XS/XR/XS Max) in the following year (2018). However, this is the first time Apple has got rid of its long-term partner Qualcomm and relies entirely on Intel’s modem; however, this cooperation The results are still not ideal because the Intel XMM7560 baseband chip does not work properly on new devices.
Although Intel made four major improvements to the XMM7560, making it comparable to Qualcomm’s newly developed chips, Intel’s R&D progress is very slow, resulting in a delay in the delivery date, and the previous technical problems have not been properly resolved. A situation made Apple executives feel anxious.
Johny Srouji, senior vice president of hardware technology at Apple, was disappointed, even annoyed at Intel executives Venkata Renduchintala at a conference:
As long as I am still a leader, this kind of thing will never be allowed to happen in Apple.
In addition to the relatively weak strength of Qualcomm, the internal structure and management of Intel’s mobile sector is also problematic to some extent.
A number of Intel current and former employees and industry partners told The Information that Intel’s mobile business unit is located in 32 locations around the world, most of which are concentrated in Germany, away from its headquarters in California; and, through multiple acquisitions, Intel Mobile The global workforce has expanded to approximately 7,000 people. This size and layout has made modem design inefficient and has increased the difficulty of teamwork.
The above details all hint to some extent that the tension between Apple and Intel is not a cold day; and this tension eventually continues to Apple and Intel’s cooperation on 5G modulation regulators.
Tension is aggravated in 5G baseband cooperation
In fact, Apple and Qualcomm have always had good long-term cooperation, but a lawsuit that began in 2017 has caused the two companies to start “brothers”. By 2018, litigation disputes between Qualcomm and Apple entered a fierce phase, and Intel became the exclusive baseband supplier for Apple; this means that Intel is likely to become the supplier of Apple’s 5G baseband.
On the other hand, Intel really wants to cooperate with Apple. In order to launch the 5G version of the iPhone in 2020, it has also made a lot of preparations for this goal. For example, in the past two years, the 5G baseband chips XMM8060 and XMM8160 have been announced.
However, at that time, some people sang the cooperation between Intel and Apple on the 5G baseband chip. UBS (UBS Group) analyst Timothy Arcuri wrote in a report:
Apple has no better choice, but I don’t think Intel is ready for a backward compatible 5G modem.
Moreover, according to FastCompany , if Apple wants to launch the 5G version of the iPhone in September 2020, Apple should get samples early this summer and determine the ultimate version of the modem in early 2020; however, Intel once again missed Apple. The delivery date. It is said that in the delivery of 5G chips, Apple has lost confidence in Intel and even sought cooperation opportunities from Samsung and MediaTek for 5G baseband, but unfortunately they have failed.
However, Intel is also very vocal about Apple. As a strong buyer, Apple has been pressing the price and put forward a priority requirement, which will greatly reduce Intel’s profits; Intel CEO Bob Swan also has to start to reflect on the relationship with Apple, hoping to turn Intel’s focus Go to other more profitable businesses.
Apple Qualcomm regained its good, Intel took the initiative to withdraw
In the end, Apple couldn’t bear to go to Intel’s slow-moving baseband business. It only offered Qualcomm a good chance to seek re-cooperation. Moreover, Apple executives have been very optimistic about the performance of Qualcomm modems privately, according to the Washington Post . Johny Srouji mentioned in an email:
From an engineering perspective, Qualcomm is the best.
In the middle of last month, Apple and Qualcomm reached an agreement to lift all litigation in both parties; as part of the settlement, Apple and Qualcomm signed a six-year effective one on April 1, 2019. The technology license agreement for the year, the agreement is valid until 2025; in addition, Apple will pay Qualcomm an unspecified fee and resume the plan to purchase a modem from Qualcomm.
For Apple, the return to Qualcomm’s 5G modem chip is the most commercially meaningful; for Qualcomm, the settlement with Apple means that it will regain Apple’s 4G orders, or even 5G orders.
Qualcomm’s share price rose 23.31% on April 16, setting the biggest one-day gain since 1999.
TechGrits was informed that after Apple announced that it had returned to Qualcomm, Intel also stopped the loss in a timely manner and announced that it would withdraw from the 5G modem business. The products originally planned to be launched in 2020 will not continue to be developed.
Bob Swan said in a statement that the company made such a decision because they believed that the development of 5G modems could not achieve profitability and positive returns; this decision also caused Intel’s share price to rise by 3% the next day.
In addition, Intel is also looking for other ways to sell the baseband business. The company stated:
We have world-class 5G modem technology, and few other companies have the full intellectual property and expertise to provide these technologies like Intel. This is why many companies are interested in acquiring Intel’s baseband business.
The Wall Street Journal also reported that Apple had negotiated with Intel on the acquisition of the business last summer, but there was no breakthrough.
Create Apple’s own 5G modem on the agenda
In terms of 5G modem providers, Apple’s settlement with Qualcomm provides Apple with a better choice. And through this “long and painful” partnership with Intel, Apple seems to be aware of the importance of reducing dependence on the outside world and mastering core parts technology.
According to foreign media reports , there is a large team led by Johny Srouji in Apple to develop the company’s own modem, but for now, the progress of the project is far from the prediction level of some chip experts; the engineers of the relevant team expect that Apple It is expected to use its own modem in 2025.
In fact, Apple’s self-developed baseband plan is not surprising, because the iPhone’s A-series chips, GPU graphics and other core components have experienced this process.
However, for Apple, although its relationship with Intel is a bit embarrassing, the acquisition of Intel’s modem is still a long-term good choice, because it can greatly shorten the time and cost of its self-developed baseband.