The Apple and Qualcomm spat could take a new turn with the former reportedly considering a decision to manufacture the iPad and iPhone without Qualcomm chips, says a report from The Wall Street Journal. Apple’s move is inspired by Qualcomm’s decision to reportedly withhold software that Apple needs to test LTE chips in the iPhone and iPad.
Can Apple drop Qualcomm chips?
Such a move from Apple, according to Bernstein analyst Stacy Rasgon, is not totally unexpected. As of now, it is not known if Apple would completely call off the relationship with Qualcomm, or there would be some strings attached. The Cupertino California-based company might currently be weighing all alternatives such as entering into a pact with multiple suppliers.
“Apple is big enough that they want to support multiple paths, they can do that,” Rasgon said. A couple of years back Samsung also decided to drop Qualcomm chips from its smartphone, but the chip maker was not aware of the development until it “was close to time to ship” Samsung’s phones, said Rasgon, according to Reuters.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
Apple did not reveal its intentions behind its bid to acquire the chip business of Toshiba earlier this year. Thereafter, a report from Nikkei Asian Review stated that Apple might be going forward with its plan to make its own chipsets for which it needs to do significant investment in the semiconductor business. Apple ultimately wants to be less dependent on both Qualcomm and Intel.
Qualcomm is all set to report its third-quarter results this week, and Apple’s decision could be a huge setback for them. The chipmaker’s stock is down 15% this year even though its chips are deployed in devices like Google’s new pixel phone.
According to the WSJ, Apple has about three months to decide on the manufacturer that would supply the chips for its upcoming devices. As the company launches next-gen products on an annual basis, the iPad Pro could be released somewhere midyear followed by a new iPhone in September, notes the WSJ.
Apple vs. Qualcomm – what’s the dispute about?
Qualcomm has been a component supplier to Apple for many years. However, Apple opted for Intel chips for some iPhone 7 and iPhone 7 Plus models. Similarly, in the iPhone 8 and the iPhone 8 Plus, Apple has used both Qualcomm and Intel chips. Network carriers AT&T and T-Mobile sell Intel-powered iPhones, whereas Verizon and Sprint models have Qualcomm chips fitted to them.
Apple and Qualcomm got into a legal tussle after the former stopped paying licensing fees to the later. The Tim Cook run company sued Qualcomm for charging excessive licensing fees. Qualcomm, on the other hand, maintains that its technology is, “at the heart of every iPhone.”
As the battle escalated, Qualcomm even asked for an import ban on iPhones to the United States. Earlier this month, Qualcomm slapped Apple with another lawsuit to block the sales and manufacturing of the iPhone in China as well.
In August, the U.S. International Trade Commission said that it is in the process of investigating into the matter, where Qualcomm accused Apple of violating some of its patents related to the mobile technology.