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Apple's agreement with Qualcomm this week has hit the company's supply chain strategy, which has become one of the biggest challenges in its efforts to cut off dependence on key parts suppliers.
This familyIPhoneThe manufacturer reached an agreement with Qualcomm on Tuesday to terminate all legal proceedings and to reuse the chip maker's modem, possibly including important 5G chips. This ended a two-year patent dispute between the two technology giants.
The agreement contains six years of authorization. That is to say, in six years, Apple will not design its own modem, nor will it stop cooperating with Qualcomm. This also highlights the difficulty of self-development of key components.
"the modem is the king's game," said Gus Richard (Gus Richard), a Northland Capital Markets chip analyst. "Qualcomm may be the only one in the world to be Apple next year.Mobile phoneCompanies that provide 5G modems." Apple declined to comment.
For Apple CEO Tim Cook (Tim Cook), reconciliation with Qualcomm is a bitter pill. It is his two important strategies to improve the efficiency of the large supply chain and transfer the design of some components to the interior. In order to reduce costs alone, the company may also sign up with a number of suppliers. If its in-house engineers mastered all the development technology, the company sometimes completely cut off cooperation with some suppliers.
This has become an important element of the success of the iPhone, enabling it to differentiate itself from its competitors. Apple's mobile processors are at the top of the industry, ensuring that their phones are fast and round. The company is also developing its own display technology for future devices, and recruitment information indicates that they may be developing their own battery technology. The company also doesIPadApple Watch, Apple TV, AirPod and Mac have developed many components to improve their performance.
Modems require more layers of technology than other types of processors. It is responsible for linking mobile phones to cellular networks, allowing devices to browse the network, download applications, and answer calls. It is a complex task to run this technology smoothly around the world, requiring a wide range of industry knowledge, but it is difficult to achieve it overnight. Apple started developing its own modem about a year ago. This part of the work usually takes at least two years, and another year and a half of testing.
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For a mobile phone for global sales, it must be compatible with a variety of operators, which requires professional engineers to conduct comprehensive field testing.
Qualcomm has done a lot of this for mobile phone manufacturers, and spent many years building relationships with major telecom equipment manufacturers and suppliers. The company has laboratories at its headquarters in San Diego and elsewhere that replicate the environment of mobile phones anywhere in the world. This becomes critical when standards are changed and new equipment and services are introduced.
"It's very difficult for a modem to meet the requirements of all parts of the world." Richard said, "Enterprises have accumulated a lot of fragmented knowledge through 2G, 3G and 4G. Without this experience, you may not have the experience you need to succeed.
Intel, as the most dominant manufacturer in the history of the semiconductor industry in the world, has also given up in the field of modems. Apple has made Intel a candidate supplier. But the chip giant lags far behind in this area and does not offer a viable solution for the iPhone. According to people familiar with the situation, Apple plans to launch a 5G iPhone with a Qualcomm as early as 2020.
By contrast, Qualcomm plans to launch its second 5G modem this year. This service will not be fully launched by then.
"Apple will continue to build in-house expertise as a second potential source of vertical integration with Qualcomm over a long period of time," Cowen said.
However, Apple hasn't abandoned the goal of self-development of modems. Although the lawsuit was settled with Qualcomm, the company is still developing its own components. They set up teams in San Diego, California, Cupertino and Munich, Germany.
According to people familiar with the situation, hundreds of Apple engineers are developing modems at UTC Innovation Center in San Diego. The team will also integrate Qualcomm's 5G modems into future iPhones and support Intel modems in existing models. Apple plans to recruit hundreds more employees for the project.
Among the jobs listed on Apple's website, 30 mention modems and 33 mention 5G.