Apple appears to be making some big changes to the chips in its upcoming iPhones -- and that could mean your next iPhone downloads data slower than rival Android devices. Qualcomm, a major supplier of 4G chips for smartphones, on Wednesday said it doesn't expect to supply modems for any upcoming iPhones.
"We believe Apple intends to solely use our competitor's modems rather than our modems in its next iPhone release," Qualcomm financial chief George Davis.
Cristiano Amon, the head of Qualcomm's chip business, noted that it doesn't mean Qualcomm has lost Apple's business forever, but it's out for now.
"This is a very dynamic industry," he said during the earnings call. "If the opportunity presents itself, I think we will be a supplier of Apple."
Apple and Qualcommsince the beginning of 2017. Qualcomm previously supplied all modems for iPhones, but Apple now uses 4G chips from Intel in about half of its phones -- particularly those running on AT&T and T-Mobile networks. The move gave Apple more leverage in its battle with Qualcomm, but it has been criticized for hurting consumers by limiting their network speeds.
Qualcomm didn't say which company will supply modems for the next iPhone, but it's believed to be Intel.
Apple's apparent move to source its chips from one supplier could have big implications for your next iPhone. Going back to one chip provider could make it tougher for Apple to keep up with demand for its upcoming iPhones, which means you may have to wait even longer to get your hands on a new device. And speed tests have shown Qualcomm-powered smartphones are capable of faster network speeds than the devices running on Intel processors.
"Qualcomm will be the best performing 4G and 5G modem for a LONG TIME so now its [sic] time for Android makers, and QC, and cellular carriers, to start making noise on this," Shrout Research analyst Ryan Shrout tweeted.
Apple and Intel declined to comment on Qualcomm's remarks.
Qualcomm is the world's biggest provider of mobile chips, and it created technology that's essential for connecting phones to cellular networks. The company derives a significant portion of its revenue from licensing those inventions to hundreds of device makers, with the fee based on the value of the phone, not the components. Because Qualcomm owns patents related to 3G and 4G phones -- as well as other features like software -- all handset makers building a device that connects to the newer networks have to pay it a licensing fee, even if they don't use Qualcomm's chips.
That includes Apple. The Cupertino, California, giant makes its own applications processor -- the brains of the iPhone -- but it relies on third-party chips for network connectivity. Since the iPhone 4S in 2011, the supplier for those chips was Qualcomm. Because only Qualcomm designed high-end modems, it had more power when it came to the relationship.
Apple in January 2017 sued Qualcomm, saying it should pay a fee based only on the value of Qualcomm's connectivity chips, not the entire device. It says Qualcomm is "effectively taxing Apple's innovation" and that Apple "shouldn't have to pay them for technology breakthroughs they have nothing to do with."
Qualcomm counters that its technology is much more than just connectivity. It's also multimedia, imaging, GPS and countless other inventions that make a phone a phone. Without its technology, Qualcomm says, the iPhone wouldn't be possible.
With 2016'sand launch, Apple started using Intel chips in some versions of the iPhone, namely the models running on AT&T and T-Mobile networks. The Verizon and Sprint versions still used Qualcomm processors. Apple continued that strategy with last year's , and , and Qualcomm has previously said Apple likely would take the same tack with this year's phones. That has turned out not to be the case.
Qualcomm has accused Apple of purposely slowing down the speeds of Qualcomm-powered iPhones to match the speeds of Intel-powered devices. While Intel has made strides speeding up its modems, itin speed tests.
A report from Speedtest app maker Ookla earlier this week showed that Android phones using Qualcomm modems were faster than Intel-powered phones -- iPhones -- on the same networks. On T-Mobile, for instance, Android smartphones using Qualcomm's Snapdragon 845 downloaded data 53 percent faster than phones using Intel's XMM 7480 chip and 68 percent faster than Intel's XMM 7360 modem.
"Overall, the cellular performance of Android smartphones based on the Snapdragon 845 outpaced the Intel devices in every evaluated metric," Qualcomm said Monday in a blog post.
Analysts expect its speed advantage over Intel to continue. The first devices using Qualcomm's 5G chips -- likely mobile hotspots -- will hit the market later this year, followed by phones early next year. Intel doesn't expect its 5G chips to power phones.
First published July 25 at 2:12 p.m. PT.
Update at 3:15 p.m. PT: Adds background information and additional comments.
Update at 4:01 p.m. PT: Adds Apple declining to comment.
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