Tuesday in CE: Apple May Ditch Qualcomm; Sprint Dumps T-Mobile Again
If you can remember back a ways, the bickering between Apple and Qualcomm all started because the former accused the latter of using its “market dominance” in order to create a rather large mismatch and unfair advantage in the wireless chip space. That leverage, Apple alleged in a January court filing, was used to block competitors in the space from doing business with Apple and to charge exorbitant patent royalties. Qualcomm, of course, denied those claims and has since been trying to block the sale and export of iPhones and iPads the world over.
Qualcomm’s legal actions have really just served as empty threats. But now, Apple is hitting back at an incredibly soft spot for the wireless chipmaker—and it’s one that could take a huge chunk of business away.
According to several reports, Apple is actively exploring the possibility of developing next year’s iPhones and iPads with a new wireless chipmaker. Already, Apple started using Intel chips for some models of the iPhone 7 and 7 Plus produced last year, and some models of the iPhone 8 and 8 Plus released last month. The move now, according to those reports, would be for Apple to completely ditch Qualcomm and go with a mix of Intel’s chips and some possibly from a company called MediaTek.
Those plans could still change, according to sources cited in those reports. But this is the earliest in the manufacturing process that Apple has explored this possibility, they said, which represents a serious effort to get out of business with Qualcomm.
The impact for Qualcomm here would be massive. Currently, according to the Wall Street Journal, Apple spends around $3.2 billion on modem chips per year with Qualcomm, or roughly 20 percent of the company’s total chip business.
Legal action is one thing. But Apple taking real steps to remove Qualcomm chips from its products shows how impactful a major manufacturer’s decision to dump a supplier can be.
Shares in both companies are not doing well on the news. Sprint is down 9%. pic.twitter.com/fhcyb3tLw0
— Henry Williams (@digitalhen) October 30, 2017
It looks like Sprint is going to leave T-Mobile hanging yet again. Talks of a merger between the two mobile companies picked up again in the past few weeks, but during yesterday’s earnings call, Sprint majority owner SoftBank basically said it put the talks on hold.
The concerns that SoftBank had with a potential merger of the third- and fourth-largest wireless carriers included its ability to retain control over the newly formed company and a reportedly low valuation by T-Mobile owner Deutsche Telekom of Sprint’s stock.
It is still possible that the two will some day join arms and work together to take on Verizon and AT&T, but for now, this is that TV soap opera kind of couple where you want to see the two end up together, but they keep dragging the storyline out for years on end…