(Reuters) – Apple has held talks with Samsung Electronics and MediaTek together with the existing supplier Intel for the supply of 5G modem chips for iPhone 2019, according to a testimony by an Apple executive at a trial between Qualcomm and the Federal United States Trade Commission on Friday.
Between 2011 and 2016, Apple relied on Qualcomm of San Diego as the sole supplier of such chips, which helps iPhone connect to wireless networks. Starting in 2016, Apple split the business between Intel and Qualcomm, but in 2018, Apple moved exclusively to Intel for its new phones.
But Apple's supply chain executive Tony Blevins testified that Apple also considered MediaTek and Samsung, one of its biggest competitors in the smart phone market, to provide chips for the next generation of wireless networks known as 5G. These networks are expected to start coming out this year and provide faster data transmission rates than current 4G networks.
The FTC is suing Qualcomm by claiming that the chip vendor has engaged in anti-competitive patent licensing practices to maintain a dominant position in the premium modem chip market.
At the booth of a federal court in San Jose, California, Blevins testified that Apple has long sought multiple modem chip vendors but signed an agreement with Qualcomm to provide chips exclusively because the chip vendor offered deep discounts on the costs of patent licenses in exchange for exclusivity.
Later that year after the cost negotiations with Qualcomm did not go as Apple hoped, Apple initiated "Project Antique" to secure a second mode m supplier, testified Blevins.
By 2016 and 2017, Apple introduced Intel modems in some of its iPhone, but also used Qualcomm chips. But Apple's lawsuit against Qualcomm presented at the beginning of 2017 caused the exchange of their business relationship "in a very profound and negative way", leading to use only the Intel modems for phones released last year.
"The whole concept of Project Antique was to find a second supplier, no offense to (Intel) but we do not want to be a single supplier with them, we wanted both Qualcomm and (Intel) in the mix," said Blevins. Blevins also testified that Apple considered making Intel the only modem provider for Apple Watch, which added 4G connectivity in 2017 using Qualcomm chips.
Blevins said that talking to Samsung, whose Galaxy and Note devices compete against the iPhone, is "not an ideal environment" for Apple, but that Samsung is currently the largest component supplier of Apple.
Blevins did not say whether Apple made a decision about a 5G modem provider or whether it would release a 5G iPhone in 2019., Bloomberg previously reported that Apple would not release such a phone until 2020.