Stephen Nellis, reporting for Reuters:
Apple Inc has moved its modem chip engineering effort into its
in-house hardware technology group from its supply chain unit, two
people familiar with the move told Reuters, a sign the tech
company is looking to develop a key component of its iPhones after
years of buying it from outside suppliers.
Modems are an indispensable part of phones and other mobile
devices, connecting them to wireless data networks. Apple once
used Qualcomm Inc chips exclusively but began phasing in Intel
Corp chips in 2016 and dropped Qualcomm from iPhones released
Johny Srouji, Apple’s senior vice president of hardware
technologies, took over the company’s modem design efforts in
January, the sources said. The organizational move has not been
Recall the Cook Doctrine:
We believe that we need to own and control the primary
technologies behind the products we make, and participate only in
markets where we can make a significant contribution.
Right now Apple only has two choices for modems: Qualcomm and Intel. Qualcomm’s modems have historically been superior, and probably still are, but Apple’s relationship with Qualcomm is contentious, to say the least. At Qualcomm’s FTC trial last month, Jeff Williams said “We had a gun to our head” when it came to negotiating with Qualcomm for iPhone modems, and that it cost Apple $1 billion a year in licensing fees Apple considers unfair. Considering that Apple’s only alternative is Intel, who’ve always been second-fiddle to Qualcomm in modems, yeah, I’d say this qualifies as a “primary technology” Apple needs to “own and control”.
Imagine what a spot Apple would be in if they relied on Qualcomm for CPUs.
★ Thursday, 7 February 2019