Apple said to be sniffing around Intel’s modem business

Having recently ditched Intel’s modem business like a bad habit, gadget giant Apple is reportedly now thinking of buying it.

The rumour comes courtesy of The Information, which says it got the scoop from no less than four unnamed people who we’re told have been briefed on the discussions between Apple and Intel. Specifically Apple is said to be interested in Intel’s German modem operations, which is where much of the 5G R7D will have taken place.

Intel found itself as an unwitting pawn in Apple’s legal battle of will with mobile chip giant Qualcomm. Apple wasn’t happy with what Qualcomm was charging for its modems and took to the courts to do something about it. This was always just a form of negotiation, a crucial part of which was Apple’s insistence that it could just walk away from Qualcomm if it didn’t lower its prices.

The problem with this is that there are very few 5G modem players in town and even fewer that aren’t affiliated to a smartphone competitor of Apple’s. One of those was supposed to Intel, which found itself constantly defending its ability to deliver a competitive 5G modem in the face of understandable scepticism from the industry and, increasingly, from Apple itself.

Eventually the Emperor was revealed to be naked and Apple was forced to settle with Qualcomm once it became clear Intel wasn’t able to deliver. Intel wasted little time in throwing in the towel entirely on 5G modems once their only customer had ditched them and promptly retreated into the shadows, vaguely muttering about IoT.

But that doesn’t mean its efforts to deliver a 5G modem were entirely wasted. Through acquisition and organic R&D Intel must have picked up a thing or two about delivering 5G radio over the years. While Apple is forced in the mid term to rely on the loathed Qualcomm, it ultimately aspires to modem self-reliance. Since Intel’s 5G unit is presumably available at a knock-down price following its public humiliation it wouldn’t be at all surprising to see Apple snap it up, if only for a laugh.

Apple starts to count the casualties of its poor 5G campaign

It looks like one of Apple’s most senior wireless engineers has cleared off, just days after the company lost its fight with Qualcomm.

The Information has reported that Rubén Caballero, a VP of Engineering in charge of wireless stuff at Apple, has left the building. One of its mystery sources said Caballero was ‘leading Apple’s charge into 5G’, which is especially appropriate considering his surname. Since that charge was resoundingly defeated by Qualcomm’s big guns Apple seems to have decided to discreetly disband its 5G light brigade.

As is its way Apple hasn’t offered any comment on the scoop but The Information says his work emails are bouncing back and his work phone has been disconnected so the circumstantial evidence is strong in this one. Additionally Apple Insider did a bit of sniffing around of its own and got another anonymous source to confirm Caballero’s departure.

Both stories feature a fair bit of speculation about why Caballero may have galloped off after 14 years at Apple, but to us the most likely reason for any wireless casualties at Apple must be the utter farce of its attempted collaboration with Intel. Since Intel was clearly hopelessly inadequate as a 5G modem partner, Apple CEO Tim Cook must have a pretty low opinion of any of his execs that told him otherwise.

Intel admits losing Apple caused it to ditch 5G modems – well duh

Chip giant Intel silenced the non-speculation about it bailing on its much heralded 5G modem project by admitting it was due to losing Apple as a customer.

The scoop comes courtesy of the paywalled WSJ and passed on by The Verge. Intel CEO Bob Swan apparently fessed up to the WSJ saying “In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn’t see a path.”

That comment was only a minor elaboration on what Swan said on Intel’s recent earnings call. “As you know, we recently sharpened our 5G focus,” said Swan, in textbook earnings call language. “When it became apparent that we don’t have a clear path to profitability in 5G smartphone modems, we acted. We are now winding down that business and conducting a strategic assessment of 5G modems for the PC and IoT sectors while continuing to meet our current 4G customer commitments.”

Now it’s debatable how much profitability Intel would have derived from its 5G modem sales to Apple if some commentators are to be believed, so the ‘path to profitability’ bit seems like a massive euphemism for ‘likelihood that we will ever deliver a competitive product’ to us. To be fair to Swan there’s no nice way of publicly admitting abject failure so he’s entitled to dance around the issue a tad.

Since it’s now clear that Apple was the only significant customer for its 5G modem and it has apparently deemed it too much of a liability to stick with it’s worth reviewing Intel’s historical pronouncements on the matter.

Intel reckons it has the first global 5G modem

Chip-makers embark on pre-MWC 5G virtue-signalling frenzy

Intel continues to insist it’s really good at 5G

Intel triggered into joining Qualcomm Apple spat

Intel brings forward ‘launch’ of 5G modem in bid to silence doubters

In hindsight it’s all a bit tragic isn’t it? While we don’t doubt Intel genuinely wanted to compete in the modem market it also seems to have been played like a fiddle by Apple. The fruity gadget giant used Intel as a pawn in its hostile negotiations with Qualcomm and dropped it like a bad habit as soon as that became convenient. Cold.

Intel had so little faith in the product of what must have been billions of dollars of effort put into 5G modem development that as soon as its sugar daddy went back to its former partner it pulled the plug immediately. It must surely have seen this coming for a while with all the talk of Apple trying to develop its own modems, so it was just a matter of when it owned up to its 5G failure.

To be honest 5G modems seem to be the least of Intel’s problems right now so it may have been grateful to have ditched that distraction. Swan was forced to also admit Intel was revising down its full year revenue outlook by a whopping $2.5 billion on the earnings call, driving Intel’s shares down 8% at time of writing.

“Our conversations with customers and partners across our PC and data-centric businesses over the past couple of months have made several trends clear,” said Sawn. “The decline in memory pricing has intensified. The data center inventory and capacity digestion that we described in January is more pronounced than we expected, and China headwinds have increased, leading to a more cautious IT spending environment.

“And yet those same customer conversations reinforce our confidence that demand will improve in the second half. So we’ve reassessed our ’19 expectations based on the challenges we’re seeing. Our full year outlook is now $69 billion in revenue, down 3% year-over-year and down approximately $2.5 billion from our previous estimate.”

We had a chat about the Apple/Qualcomm/Intel thing on the most recent podcast, which you can access here.

Could Huawei be Apple’s 5G saviour?

Apple has boxed itself into a corner over 5G and it’s possible that smartphone rival Huawei could provide an unlikely escape route.

This is pure rumour-mongering at this stage, but sometimes it’s fun to speculate. Such substantiation as there is comes from Engadget, which has chatted to someone who reckons they know a thing or two. Their Deep Throat says Huawei is open to flogging its 5G chip to Apple, which is noteworthy because it was previously intended solely for use in Huawei phones.

The Balong 5000 was launched at the start of this year amid much confident posturing from Huawei. That represented a pretty good effort, in principle, from Huawei but at present we have no way of knowing how it compares to market-leader Qualcomm in terms of real world performance. Even this thorough rundown of the 5G modem scene is none the wiser.

An even greater mystery is the matter of why Huawei would throw Apple a bone in this way. Some companies, such as Samsung, have a sufficiently clear separation between major business units that one can work with companies that are bitter competitors of another, as it has done with Apple. Huawei doesn’t seem set up that way, however, which would make such a decision a broadly strategic one.

The answer, presumably, would be that Huawei values growing the overall 5G market above the doubtless schadenfreude it would derive from Apple’s late entry into it. The launch of a 5G iPhone would be a major boost to global consumer 5G demand and, since Apple would presumably get there eventually anyway, Huawei might think it’s better to make sure that demand boost happens ASAP and trouser a nice lot of component revenue while it’s at it.

Apple said to be losing faith in Intel’s 5G modem capabilities

A new report suggests Apple no longer has faith in Intel’s ability to deliver a 5G modem it can stick in its 2020 iPhones.

The scoop comes courtesy of Fast Company, which cites an anonymous source that claims to have some insight into the development of the Intel XMM 8160 5G modem. This shadowy figure told Fast Company Intel has been missing incremental deadlines for the development of this critical component, which has led to understandable consternation on the part of Apple.

Equally unsurprising is the revelation that Apple is a pretty high-maintenance company to work with. While some people might take a more chilled approach to component punctuality, Apple is pretty uptight about this sort of thing and isn’t shy about giving errant suppliers a hard time. Intel presumably bent over backwards for this massive deal win, but it always looked like a bit of a reach.

Speculation around Intel’s ability to deliver began as soon as the deal was announced. Late last year Intel got so sick of this scepticism that it publicly announced it was going to have the part ready half a year sooner than previously promised. At the time that seemed like a cosmetic PR move and when asked for comment on this story Intel only had the following to say: “As we said in November 2018, Intel plans to support customer device launches in 2020 with its XMM 8160 5G multimode modem.”

That’s hardly the most strident rebuttal of these latest allegations is it? Especially the use of the term ‘plans to’ instead of ‘will’, that seems to deliberately allow for a level of wriggle room that shouldn’t be needed if everything’s going according to plan. You can see why Apple might be concerned and the report implies Intel might be starting to think it doesn’t need the hassle too.

It goes on to talk about Apple’s ultimate goal of making its own modems, pointing out, as many have previously, that this is far from straightforward. The piece cites a UBS analyst who has joined the chorus of scepticism about Apple’s ability to deliver a 5G iPhone in 2020. Of course this could all be rubbish and Intel may well deliver on its promises, but if it doesn’t Apple doesn’t seem to have a 5G plan B.

Apple will struggle with 5G for years – analyst

Not only will Apple lag its competitors by at least a year in launching a 5G phone, it might still suck anyway according to a semiconductor analyst.

Bloomberg apparently got hold of a research note from Matthew Ramsay, who heads up the TMT semiconductor business at Cowen. He seems to reckon Apple has boxed itself into a corner by ditching Qualcomm as a 5G modem supplier and is now seriously short of good options in that area. He also expressed surprised that Apple has allowed this situation to develop.

Ramsay detailed four main options for Apple for 5G, but he doesn’t think any of them are great. The first is what is generally assumed: that Apple will launch 18 months behind the competition with an Intel 5G modem that is expected to be inferior and not even support mmWave. The recent MWC show saw the first 5G phones launched but Apple tends to announce new iPhones in September, hence the big lag.

Rubbish option number two is to see if anyone else can help Apple out on the modem side of things. But Huawei is off the table due to all the aggro it’s getting from the US and Samsung would be likely to ruthlessly exploit its overwhelmingly strong bargaining position, since it’s another of the long list of companies Apple is on frosty terms with. Other than that there’s Taiwanese MediaTek, but Ramsay seems to think it’s even further behind than Intel.

A third, highly implausible, option would be for Apple and Qualcomm to kiss and make up. Not only does there seem to have been too many things said that can’t be unsaid in their bitter legal dispute, but that would be an utter humiliation for Apple and surely Qualcomm wouldn’t be able to resist imposing punitive terms. Having said that, sometimes pragmatism and enlightened self-interest prevail, but we would be amazed if they did in this case.

The last option would be for Apple to buy Intel’s modem business from it in order to accelerate the development process. This would be expensive but Apple can certainly afford it. There is, however, no guarantee Apple would improve on Intel’s efforts since modems are hardly a core competence. It’s even less likely that Apple would be able to make a material improvement in the next year or two.

A fifth option not posited by Ramsay would be for an even longer delay in bringing a 5G phone to market. Apple is brilliant at marketing and could easily throw resources at belittling 5G in the short term to downplay the significance of its absence from that market. That argument would certainly find some sympathy from us in the short term, but it would surely start to wear thin before long.

Qualcomm upgrades its 5G modem

Mobile chip maker Qualcomm has unveiled its big MWC news early, in the form of the X55 5G modem, which is five better than its predecessor.

The new modem supports both flavours of 5G as well as all the older Gs and all the spectrum bands you could possibly want. It’s manufactured on a 7nm process and promises download speeds of 7 Gbps and 3 Gbps uploads speeds. The previous X50 modem only managed a mere 4 Gbps. Even the Cat 22 LTE part manages 2.5 Gbps download.

“With significant evolution in capabilities and performance, our second generation commercial 5G modem is a true testament to the maturity and leadership of our 5G technology,” said Qualcomm President Cristiano Amon. “We expect our 5G platform to accelerate 5G commercial momentum and power virtually all 5G launches in 2019 while significantly expanding the global 5G rollout footprint.”

That ‘virtually all 5G launches’ claim could be challenged in as little as a week. We may well see some 5G handset launches at Mobile World Congress and one of the biggest smartphone vendors – Huawei – has already launched its own 5G modem. Apple doesn’t bother with MWC but has indicated it would sooner make a bonfire out of iPhones then even be in the same room as Qualcomm.

Seeking modem autonomy is perfectly understandable but Qualcomm reckons it’s pretty far ahead of the chasing pack when it comes to the tech. Huawei’s speed claims don’t seem too far off Qualcomm’s but it’s not yet known how they compare when it comes to size, power efficiency, etc. And apart from Huawei and Apple Qualcomm will probably own the rest of the 5G market.

Snapdragon X55 claims to be the first announced modem to support 100 MHz envelope tracking technology, and adaptive antenna tuning for 5G sub-6 GHz, designed for power-efficient connectivity. Qualcomm can also presumably offer it integrated into the Snapdragon 855 SoC and thus cater to all your mobile chip needs. Here’s a vid.

 

Apple steps up in-house modem efforts – report

Its dispute with Qualcomm seems to have pushed Apple towards developing its own modem in-house so it no longer has to rely on external suppliers.

Apple has been making its own application processors for years thanks to the ARM IP licensing business model and the acquisition of PA Semi not long after the iPhone was launched. Making a competitive modem is a much trickier proposition, however, which is why Apple continued to pay Qualcomm for the job however deeply it resented doing so.

Following the collapse in relations between them it looked like Apple was going to turn to Intel for all its modem needs, but a report from Reuters would seem to indicate that’s not the long term plan for Apple, and that it would rather have full control over its modem destiny.

Apparently Apple has now shifted its modem silo from the supply chain unit to the hardware design one. Accordingly Johny Srouji, who heads up the hardware side of things at Apple, will now also have to deal with this future modem. This especially makes sense since Srouji, who worked at Intel for a while, was brought in in 2008 to head up the in-house SoC side of things.

The benefits of doing as much manufacturing in-house are clear, especially for products as integrated as Apple ones, but Qualcomm has a clear lead when it comes to modem design. What if the future Apple modem is an order of magnitude slower than Qualcomm – what kind of effect might that have on iPhone sales? We’ll probably find out in a few years.

Huawei launches its own 5G chip

Huawei doesn’t feel like waiting for chip companies to get their act together on 5G so it has decided to make one of its own.

The Balong 5000 was launched in Beijing today. It supports all the previous generations of cellular technology as well as all the 5G frequencies. Huawei says it can deliver 4.6 Gbps at sub-6 Ghz and 6.5 Gbps over millimeter wave. It also claims to be the first chip to support both standalone and non-standalone 5G architectures and the first to support V2X communications.

“The Balong 5000 will open up a whole new world to consumers,” said Richard Yu, CEO of Huawei’s Consumer Business Group. “It will enable everything to sense, and will provide the high-speed connections needed for pervasive intelligence.”

Huawei also launched the 5G CPR Pro, a 5G router that uses wifi 6 technology to claim speeds of almost 5 Gbps. “Powered by the Balong 5000, the Huawei 5G CPE Pro enables consumers to access networks more freely and enjoy an incredibly fast connected experience,” said Yu. “Huawei has an integrated set of capabilities across chips, devices, cloud services, and networks. Building on these strengths, as the leader of the 5G era, we will bring an inspired, intelligent experience to global consumers in every aspect of their lives.”

Not content with attacking the consumer market, Huawei also launched the Tiangang 5G base station chip. It too lays claim to having all the bells and whistles, including the ability to control 64 beamforming channels, enhanced computing capacity and greater power efficiency.

“Huawei now has industry-leading capabilities to deliver end-to-end 5G, with simplified 5G networks and simplified operations & maintenance,” said said Ryan Ding, Huawei Executive Director of the Board and Carrier Business Group CEO. “We are leading the commercial rollout of 5G, and building a mature industry ecosystem.”

These launches come at a good time for Huawei, considering all the negative publicity it has been getting recently. Yu used the launch event to make some pretty bullish statements, including his belief that Huawei will overtake Samsung to become the world’s number one smartphone vendor before long. He also teased the launch of a foldable 5G phone at MWC in a month’s time.