Huawei founder Ren Zhengfei says his company is ‘open’ to stepping in and supplying 5G chips for Apple devices.
Some analysts predict it will be 2021 until we see a 5G iPhone. Apple tends to wait a while for new technologies to mature before adoption, but 5G networks are beginning to be deployed and consumers are looking for compatible handsets.
The delay is not a poor strategic decision from Apple but rather a result of its ongoing dispute with chipmaker Qualcomm.
Apple shifted away from Qualcomm modems to Intel starting with the iPhone 7, but the latter doesn’t expect to launch a 5G modem until the second half of this year. Intel’s roadmap rules out its 5G chip making it into this year’s iPhone.
One company that Apple’s been rumoured to be in talks with to step in and supply 5G chips is Chinese telecoms giant Huawei.
Zhengfei told CNBC that Huawei is ‘open’ to selling its 5G modems to Apple. However, speaking at the Huawei Analyst Summit held in Shenzhen, China on Monday, rotating chairman Ken Hu said: “We do not have communication with Apple on this issue.”
Given the US government’s hostility towards Huawei, claiming it’s Beijing-controlled and poses a national security threat, there’s likely some hesitance from Apple to go down that route. The last thing a company wants to do is source over 40 million 5G chips (the approximate number of iPhones sold in the US each year) which are at risk of being banned in its biggest market.
Alternative 5G Modem Suppliers
Another possible 5G modem supplier is MediaTek, but it too isn’t expected to be able to supply in time for this year’s iPhone. Its first chip, the M70, is due to launch in late-2019.
Samsung is the only remaining major supplier. The company has a 5G chip available and could supply in time for the 2019 iPhone. Apple, however, would rather not source from its biggest smartphone competitor.
Earlier this year, in a testimony as part of the Qualcomm trial, Apple supply chain executive Tony Blevins confirmed his company had considered sourcing chips from Samsung and MediaTek. The discussions with Samsung was “not an ideal environment” for Apple, Blevins noted.
As it stands, Samsung is set to launch one of the first 5G handsets and will benefit from a year’s headstart over Apple. The company would likely be reluctant to supply chips that would remove such a marketing advantage and cannibalise its smartphone sales. If it was to do so, it would almost certainly be at a huge cost to Apple.
To avoid this situation again in the future, Apple is reducing its reliance on third-party suppliers. Earlier this year, Apple combined its modem engineering team with its processor chip team showing it’s ramping up in-house efforts to build modems.
Right now, Apple’s best bet to get a 5G iPhone on shelves this year is to settle its differences with Qualcomm or source from Samsung. We have a feeling it’ll choose to skip a 5G iPhone this year.
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