Apple Loses Confidence In Intel’s 5G Chip Deadline – Report

Apple is reportedly building up its own in-house engineering team to develop 5G modem chips, after losing confidence in Intel’s ability to hit its exacting deadline.

Apple of course is locked in a bitter legal battle with Qualcomm, and therefore the firm is currently utilising modem chips from Intel in phones such as the iPhone XS, XS Plus, and XR.

But next year Apple expects to release its first 5G compatible iPhone in 2020, supposedly boasting Intel modem chips, but a recent media report has again cast doubt on that happening.

Intel deadline

It should be noted that this is not the first time that it has been reported that Apple would drop Intel’s 5G chipset.

In July 2018 a report from Ctech claimed that it has seen internal documents that showed Apple had already notified Intel that it would not be using the chipmaker’s 5G modems in its 2020 product lineup.

But now Fast Company has reported that Apple is bolstering its in-house engineering team to between 1,000 and 2,000 engineers to work on a 5G modem chip.

The reason is down to Apple reportedly losing confidence in Intel’s ability to deliver the XMM 8160 5G modem, Fast Company quoted a source with knowledge of the situation.

Essentially in order for Intel to deliver huge numbers of those 5G modems in time for a September 2020 iPhone launch, the chip giant has to deliver sample parts to Apple by early summer of this year, says the report.

It then needs to deliver a finished modem design in early 2020.

Intel last November reportedly said it expects to ship the 8160 5G modem in the second half of 2019.

But Apple is not convinced Intel will meet the deadline, the source apparently said.

For Intel, the report said, Apple is proving to be a difficult client as it has already negotiated an attractive unit price, leaving Intel with very little profit.

On top of that Apple is also demanding that it has delivery priority over other Intel customers.

In-house team

And in a sign of how little faith Apple has in Intel, the source explained that Apple has recruited RF engineers from both Intel and Qualcomm to work in a new development facility in San Diego.

The source says the in-house development operation has been ramping up quickly, but it should be remembered that Apple has been designing its own iPhone processors since the release of the iPhone 4 in 2010 and has steadily been ramping up its chip design efforts over the years.

Currently, all iPhones, iPads, Apple Watches, and Apple TVs use processors designed by Apple and based on technology from ARM Holdings.

But at least one expert also thinks Intel will not meet Apple’s deadline.

“We do not believe [Intel] will be ready with a single chip backward compatible 5G modem, while others like Samsung/Mediatek are unlikely solutions either technically (Mediatek) or practically (Samsung),” UBS analyst Timothy Arcuri was quoted as writing in a research note this week.

The source has confirmed that Apple has recently held talks with both Samsung and Mediatek about supplying modem chips in the near term.

Qualcomm battle

Apple has historically relied on Qualcomm chips, but its bust up with the chip designer meant that it turned to Intel for its chipsets.

Of course it makes sense for Apple to go back to Qualcomm for its 5G modem chips.

But such is the bitterness between the two firms that this seems unlikely.

Last year Qualcomm claimed that Apple owes in billions of dollars in unpaid royalties. It said that Apple was $7bn (£5.5bn) behind in patent royalty payment for the use in its chip in iPhones.

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