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18 February 2019

Apple steps up quest for its own modem as it loses German case to Qualcomm

Apple has been forced to stop selling some new iPhones with Intel modems in Germany after losing one of its court battles with Qualcomm last year. Developments like that will only increase the smartphone maker’s interest in becoming self-sufficient in modems, as it has in other components such as the application processor and graphics processor.

In December, Qualcomm won a victory in a German court, where it was suing Apple for allegedly violating Qualcomm patents in the area of envelope tracking, in some older iPhone 7 and iPhone 8 models. At first, Apple had to withdraw the disputed handsets from its stores. Now it will resume selling the models, but only versions that have Qualcomm’s own chips in them, not those from rival Intel.

Qualcomm has accused Apple, in US-based suits, of enabling Intel to access Qualcomm secrets, since the iPhone maker decided to dual-source modems for its smartphones in the iPhone 7, 8 and X. Before that, Qualcomm had been the only supplier of iPhone modems since the third generation of the product.

However, this German victory related to a narrower complaint about the envelope tracking patent, which was not directed at an Intel chip, but a power management chip from Qorvo. This was used in Intel-based models because Intel does not have its own solution in the RF front end space, unlike Qualcomm.

Apple began phasing in Intel’s modem chips in 2016 and in last year’s iPhone models, it only used Intel products. But Qualcomm has continued to supply modems for older models, and Apple says it will use only those for German iPhone 7 and 8 handsets.

“Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” Apple said in a statement to Reuters.

“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Steven Rodgers, Intel’s general counsel, said in a statement.

Faced with such outcomes, Apple has been reported to be keen to develop its own modem, and reduce its reliance on either of the US chip giants. That would give it full control over the design and availability of the component, and could reduce handset bill of material cost (excluding the cost of recouping the massive investment required to create a modem from scratch). However, it would also expose Apple to the risk of creating an inferior modem to that of Qualcomm – and as many modem casualties in the past have illustrated, from Broadcom to Nvidia to Freescale, it is tough to beat Qualcomm at its strongest game.

But, according to Reuters, Apple has shifted its modem group from its supply chain operations to its hardware design division, headed by Johny Srouji – who used to work at Intel and was hired in 2008 to head up the inhouse system-on-chip developments.

Reports first emerged last April that Apple was considering developing its own modem, so that it could create a fully integrated system-on-chip, combining its own processor and modem in order to save cost and power consumption.

Jim McGregor, principal analyst at chip research firm Tirias Research, said at the time: “Intel will likely lose Apple’s modem business once Apple integrates a modem into its mobile SoCs.” The other top three smartphone makers – Samsung and Huawei – both have significant internal modem and SoC products.

It will also be interesting to see whether Apple is actually able to design a modem for its inhouse SoC. The modem is a challenging component to create from scratch (though the same was said about the GPU, and Apple replaced Imagination more quickly than most thought possible).