Apple’s plan to launch a 5G iPhone in 2020 are in jeopardy as Intel has been struggling to meet the development deadline of its XMM 8160 5G modem.
Apple is looking to solely source 5G modem from Intel until its own in-house 5G modem design is ready.
For Apple to launch a 5G iPhone in 2020, Intel needs to deliver sample chips to the company by early summer of 2019 followed by a finished modem design in early 2020. However, Intel has struggled to meet the deadlines and it looks unlikely that its 5G modem will be ready in time. This has strained the relationship between the two companies. There have already been three different project managers over at Intel to manage its relationship with Apple.
Apple already has over 1,000 to 1,200 engineers working on an in-house modem for future iPhones. The company has managed to poach RF engineers from both Qualcomm and Intel to its team who are working in a San Diego development facility. However, despite Apple’s best efforts, the modem is only going to be ready by 2021 or later.
Apple has held talks with Samsung and MediaTek to use their 5G modem in 2020. However, neither of the companies are in a position to supply Apple with standalone 5G modem in 2020. Apples best bet is to go back to Qualcomm but given the strained relationship between the two companies, that’s unlikely to happen.
The report from Fast Company also highlights that iPhone modem orders are not particularly lucrative for Intel. Apple negotiated a very attractive price for modems from Intel which means the latter is making very little profit. Plus, the agreement demands that Intel keeps up with development and fabrication deadlines and orders from Apple always receive the highest priority.
Intel must move to fabricating modem on 10nm followed by 7nm fabrication node to keep up with TSMC. This requires a huge investment on Intel’s part and while orders from Apple will be enough to keep its fab operational and busy, it would also means that the company prioritises orders from the Cupertino company first. This means not being able to fulfil orders of other more profitable clients. This is something that has not gone down well with Intel’s new CEO Robert Swan.
Our Take
If Intel is unable to deliver a 5G modem to Apple in time for 2020 iPhones, we could see the company completely skipping 5G connectivity for the year. Instead, Apple might just delay offering 5G on iPhones until its own in-house modem is ready. Despite the hype, 5G networks are still in nascent stages and almost non-existent so Apple can possibly afford this delay.
[Via Fast Company]
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