Apple and Qualcomm dilemma

Apple and Qualcomm have finally come to terms with the web of litigations and regulatory wrestle they have been embroiled in for the past couple of years. Qualcomm has also agreed to supply hardware to Apple for the coming years. We are yet to know the Apple supplier’s payment agreement to Qualcomm and other specifics on the terms of the truce. Still, this has a broader implication on the whole tech moving forward.

“Ultimately, Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness versus battling Qualcomm in court,” Wedbush Securities analyst Daniel Ives quoted.

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While Apple aced in personalizing tech for the people, Qualcomm carved its path with “chip and licensing” model. Both the tech giants could have seen the bigger picture envisioned by Warren Buffet, “in order to win, you first need to survive”.

This takes place at the same time when Intel announced its exit from smartphone 5G modem race. The company would henceforth prioritize 5G Efforts on Network Infrastructure and Other Data-Centric Opportunities. Apple used Intel modems in its iPhones so far. This new turn of events opens up doors for players like Qualcomm, Huawei, and MediaTek. Amongst the latter two, MediaTek’s tech doesn’t meet the Apple standards. So, now you know who remains in the race.

Furthermore, another angle to the story would be on who gets to leverage the pricing power. If Qualcomm had won the battle, it could have charged huge from Apple to use its modem within the future iPhones. On a different track, if Apple had won the feud, it could bargain the Qualcomm modems at a cheaper rate.

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Huawei is already aligning China’s aim to be free of US tech by 2025. iPhone sales are dipping in China and the company is losing grounds to Chinese regulations. So, both Apple and Qualcomm needed to patch their problems to headfirst towards the 5G race.

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