Updated: Apple reportedly dumping Intel’s 5G modem

Apple, iPhone X, facial recognition, security, Juniper market research
Apple released its iPhone X last year. (Apple)

According to a new report, Apple won’t use Intel’s silicon for its forthcoming 5G iPhone—a noteworthy situation considering Qualcomm and Apple remain locked in a heated patent licensing battle.

Israeli website CTech by Calcalist reported it reviewed internal communications from Intel and spoke to "people familiar with the matter” and found Intel would not supply 5G modems for Apple's 2020 phones. As a result, according to the report, Intel halted development on its 5G modem—code-named “Sunny Peak”—and would work on getting Apple’s 5G modem business for the company’s 2022 lineup.

That news is bolstered by a recent report that Northland analyst Gus Richard believes Apple may look beyond Intel for phone modems made by MediaTek, and that Apple might also ditch Intel’s chips in its Mac laptops.

However, following the publication of the report, Intel denied it has changed its 5G plans. “Intel’s 5G customer engagements and roadmap have not changed for 2018 through 2020. We remain committed to our 5G plans and projects,” the company said in a statement.

After stumbling in the race to supply silicon to 4G phone makers, Intel has been working to obtain a foothold in the nascent 5G market. At the same time, though, heavyweight Qualcomm has been crowing of its growing 5G traction—Qualcomm in February said more than a dozen handset makers around the world have selected its Snapdragon X50 5G NR modem to power their forthcoming 5G phones, an announcement the company argued gives it a 12- to 18-month lead on its competitors in the 5G arena.

However, Qualcomm is embroiled in a high-profile patent battle with Apple that has clearly soured the companies’ relationship. Apple’s $1 billion lawsuit against Qualcomm is centered on Apple’s argument that Qualcomm charges too much for licenses to its patents for mobile phones. Qualcomm, of course, is hoping to both ink a 5G patent licensing agreement with Apple as well as sell its 5G silicon to the iPhone vendor.

Along those lines, Qualcomm’s management in April indicated the company is adjusting its patent-licensing terms, which some analysts said could result in a reduction in licensing fees paid by some of Qualcomm’s bigger customers, such as Samsung.

It’s unclear whether Qualcomm’s patent-licensing changes, and its 5G momentum, might sway Apple or whether the iPhone vendor will look to another supplier like MediaTek—or develop its own products—to tackle the 5G sector. But it’s likely that the 5G phone business will begin to pick up speed in the coming years: Strategy Analytics recently said it expects the first 5G commercial handsets to go on sale starting in early 2019, but the firm also said 5G handsets will only account for 5% of global handset sales by 2021.

Similarly, Gartner predicted that, by 2021, 9% of smartphones sold will support 5G.

Article updated July 6 to include the statement from Intel.