It is revealed that Apple has failed to develop 5G chips, and it needs to continue to Qualcomm
It is revealed that Apple has failed to develop 5G chips, and it needs to continue to Qualcomm. Although Apple has long exposed the news, it said that the new generation iPhone in 2023 We must use our own 5G chips, but now it seems hopeless. It was revealed that Apple failed to develop 5G chips and needs to continue with Qualcomm. It was revealed that Apple failed to develop 5G chips and Qualcomm needs to continue 1
On June 29, well-known Apple (AAPL, stock price $137.44, market value $2.2245 billion) analyst Ming-Chi Kuo said on social media: "My latest The investigation shows that Apple’s 5G baseband chip research and development may have failed, so Qualcomm will continue to be the exclusive supplier of 5G chips for the new iPhone in 2023, with a supply share of 100 (Qualcomm’s previous estimated share was 20). ”
Ming-Chi Kuo believes that failure does not mean that Apple will give up its self-developed 5G baseband chip project. Ming-Chi Kuo said: "I believe Apple will continue R&D, but by the time Apple succeeds and can replace Qualcomm, Qualcomm's other new businesses should have grown enough to significantly offset the negative impact of the loss of iPhone 5G chip orders."
In this regard, the reporter contacted Apple and Qualcomm (QCOM, stock price 131.6 US dollars, 147.4 billion US dollars) respectively through WeChat to understand the situation, but as of press time, no response has been received.
Previously, Apple has been developing its own A series and M series chips for iPhone, iPad, Mac and other products, and the increasingly powerful Apple chips are gradually changing the consumer electronics industry in various segments. The competitive landscape of the industry. So, what is the difficulty in the development of 5G baseband chips that may have "difficult" Apple?
Apple and Qualcomm have had long-term conflicts
Currently, Qualcomm is the leader in the baseband chip industry and produces components for Apple’s iPhone products. The baseband chip is a key component that determines call quality and data transmission speed, and Qualcomm has established many patents around this technology.
Although Apple still uses Qualcomm’s 5G baseband chips, the company has been actively brewing self-research on chips for several years to get rid of its long-term dependence on Qualcomm.
In fact, Apple and Qualcomm have had conflicts for a long time. Apple has accused Qualcomm of "double charging," charging a fee once for its baseband chips and charging a license fee again for the patents on which the chips are based. Qualcomm also prices this license based on a percentage of the iPhone's retail price.
As we all know, Qualcomm has two core business divisions. One division develops chips and wireless modems for smartphones and other computing devices, and the other division provides patent licensing to smartphone manufacturers, and Qualcomm makes most of its profits. Also comes from patent licensing. Under the patent licensing system created by Qualcomm, patent fees need to be paid to Qualcomm regardless of whether it uses Qualcomm chips. This business model has allowed Qualcomm to develop from a small contract research organization in 1985 into a global chip giant.
Apple and Qualcomm broke out in a legal battle over patent licensing fees in 2016. The two parties ended their years-long patent dispute and reached a settlement in 2019. According to Qualcomm's statement at the time, the two companies would reach a six-year global patent licensing agreement and a multi-year chipset supply agreement. At the same time, as compensation, Apple will also pay Qualcomm a one-time payment.
Regarding the specific amount of the payment, Qualcomm gave guidance for the third quarter when it released its second quarter 2019 financial report - it is expected to receive 4.5 billion from Apple's lawsuit settlement in the third quarter. to $4.7 billion in additional revenue.
What are the difficulties in baseband research and development?
Reaching a settlement does not mean Apple compromises, but it also speeds up Apple's pace of designing its own baseband chips.
It is worth noting that in the same year (2019) when the settlement was reached, Apple acquired Intel’s smartphone 5G baseband chip business for US$1 billion. At the time, Apple said: "This acquisition will help accelerate our development of future products and allow Apple to further differentiate itself in the future."
Core differentiation brought by Apple's A-series processors This has enabled the iPhone to gain a leading share of the mobile phone market in the world. In recent years, Apple has successively implemented self-development of CPU, GPU, ISP, etc. on the A-series processors, but has always been constrained by Qualcomm in terms of baseband chips.
So what are the difficulties in developing 5G baseband chips?
A senior brokerage analyst who did not want to be named told reporters via WeChat on June 29: "Baseband mainly deals with frequency bands and communication protocols. The difficulty of self-research is that they must support various frequency bands. From 2G, 3G and 4G to the latest 5G standard communication protocols, the difficulty in being compatible with so many protocols and frequency bands is that debugging is complicated and generally requires a lot of people to do this."
In addition, power management is also challenging. . The aforementioned analyst said: "The higher the frequency, the more important power management becomes, because radio transmission has high requirements on battery life."
However, former industry analyst Yao Jiayang But he has reservations about Ming-Chi Kuo’s views. He told reporters via WeChat: "Apple and Qualcomm have reached a settlement. At the same time, Apple has also obtained Intel's 5G baseband chip department, plus two years of research and development time. Guo Minghao has to point out the reasons for the failure (to make the outside world believe it). ”
Talking about whether Apple should avoid infringing on Qualcomm’s many patents accumulated on 5G baseband chips during its own research, Yao Jiayang responded: “Apple can buy it from Qualcomm, which has a patent licensing department.”
Previously, the market had expected that Apple’s iPhone 15 launched in 2023 would all use self-developed chips for the first time. The 5G baseband chip would use TSMC’s 5nm wafer production, the radio frequency IC would use TSMC’s 7nm production, and the A17 application The processor will be mass-produced using TSMC’s 3nm technology. Once Apple switches to a self-developed baseband, it will not only reduce costs, but also reduce its dependence on Qualcomm. It is revealed that Apple failed to develop 5G chips and needs to continue to use Qualcomm 2
Apple, as the world's top mobile phone production supplier, has always been unable to get rid of the influence of Qualcomm on 5G baseband chips. For many years, Apple has been committed to developing its own 5G chips and invested a lot of manpower and material resources, but it has never been able to get in. We all know Apple's profitability. It is reported that Apple reported a profit of US$21.7 billion in the second quarter of last year, with operating income of US$81.4 billion.
But this year, Russia, Ukraine, the United States and Russia are anxious. Although Apple is a major taxpayer in the United States, its arms cannot twist its thighs. Apple has to do whatever the law says, so Russia A large number of Apple mobile phones have turned into "bricks" that can only make calls. In addition, diplomatic relations are too tense, so Apple has directly lost the huge market in Russia.
And not only Russia, this kind of behavior itself will also cause the company to lose credibility, because users in other countries will of course consider that if there is a small conflict with the United States one day, and then their mobile phones become " "Brick", you must know that the price of Apple mobile phones is really not low, no one can accept this kind of thing becoming a "brick". Although all of the above will affect Apple's performance, Apple is still very profitable and very rich.
It’s a pity that it’s useless no matter how much money you have. 5G chips can be bought with money, but money cannot be turned into technology. After all, the United States failed to develop its own 5G baseband chip. , the lifeline is still in the hands of Qualcomm. In fact, Qualcomm had already given up. Qualcomm was wondering why Apple had tinkered with chips this time around, so it would be pretty good if Apple could basically account for 20 percent of its chip supply this year.
But Qualcomm did not expect that there was a possibility that Apple could not develop it. As a result, it took all orders from Apple with tears in its eyes. It is expected that the new iPhone in 2023 will use Qualcomm chips, and it will be the exclusive supplier.
Apple is anxious. Everyone is anxious if this matter falls on anyone. The chip is the brain and core of the mobile phone. Now that the core is in the hands of others, it must be urgent. The ground scratches the heart and the liver. However, many things are counterproductive. Although Apple and Qualcomm have been in constant lawsuits, they still have to buy what they should buy. After all, business has to be done. No matter how big the hatred is, it cannot be over money. Making money is not shabby.
Does Apple have no other choice? In fact, there really isn’t. Even in foreign countries, there are only a few leading chip manufacturers. If you don’t look for Qualcomm, you can only look for Intel. However, the chips produced by Intel do not meet Apple’s standards, so Apple does not Other options. So there is nothing I can do, even if I have deep hatred, I can only hold my nose and admit it.
Although Apple has long exposed the news, saying that the new generation of iPhone in 2023 must use its own 5G chips, but now it seems that it is hopeless, and it will even have to find Qualcomm for the next generation. Technical level cannot be measured by money. Apple currently does not have the ability to develop its own 5G baseband chips. How much money is available is just a skillful woman who cannot make a meal without rice.
Apple is still a long way from putting its self-developed chips into use, so there is still a long way to go. Don’t offend anyone right away. If Qualcomm raises the price for you now, you will Still have a temper? It was revealed that Apple failed to develop 5G chips, and Qualcomm needs to continue to develop 3
On June 28, Ming-Chi Kuo, “the strongest Apple analyst on the planet,” revealed that Apple’s self-developed iPhone 5G baseband chip may have failed. Qualcomm is expected to remain the only 5G baseband chip supplier for iPhone in the second half of 2023.
Affected by this news, on June 29, the news "Apple 5G chip research and development failed" once topped the list of hot searches on Weibo.
On June 28, Ming-Chi Kuo said that because Apple’s chips are currently unable to replace Qualcomm, Qualcomm’s revenue and profits in the second half of 2023 and the first half of 2024 are expected to exceed market expectations.
Data shows that the baseband chip is a key component that determines call quality and data transmission speed. Sheng Linghai, vice president of research at Gartner, said in a previous interview with the media that the difficulty of baseband chips lies in the fact that communication technology is a technology that has been accumulated for a long time. 5G baseband chips must not only meet 5G standards, but also be compatible with 4G, 3G, 2G, 1G, etc. A communication protocol.
Previously, Qualcomm, HiSilicon, MediaTek, and Samsung were the main manufacturers of baseband chips. According to data from market research organization Strategy Analytics, the global mobile phone baseband chip market revenue increased by 19.5% year-on-year in 2021, reaching US$31.4 billion. Qualcomm, MediaTek, Samsung LSI, Unisoc and Intel occupy the top five baseband chip market revenue shares in 2021.
Apple's well-known A-series chips are processor chips - in 2010, Apple launched its first self-developed mobile phone chip, Apple A4. Since then, A-series chips have relied on advanced processes, CPU architecture and GPU cores With generations of improvements, it has always been the representative of high-performance chips on mobile platforms. Currently, Apple’s latest iPhone 13 series is already equipped with the A15 bionic chip.
In recent years, Apple has successively implemented self-research on CPU, GPU, ISP, etc. on the A-series processors, but it has always been restricted by Qualcomm in terms of baseband chips. According to the Strategy Analytics report, Qualcomm currently leads the baseband chip market with a market share of 56, MediaTek has a market share of 28, and Samsung has a market share of 7.
Apple has previously chosen to purchase Qualcomm’s baseband chips. From 2011 to 2016, Qualcomm has been the exclusive supplier of baseband chips for Apple’s iPhone.
But Apple has accused Qualcomm of "double charging," charging once for its baseband chips and charging another license fee for the patents on which the chips are based. Qualcomm will also price this license based on a percentage of the iPhone's retail price.
As a result, the two parties have repeatedly engaged in protracted legal battles in many countries around the world over patent issues. For example, in 2017, Qualcomm sued Apple in San Diego federal court, claiming that Apple's iPhone, iPad and Apple watch infringed on many of Qualcomm's mobile technology patents.
During this period, Apple turned to purchasing Intel baseband chips and introduced Intel baseband chips into iPhone 7 to reduce its dependence on Qualcomm. However, after adopting Intel's baseband chip, Apple has been criticized by the market many times due to iPhone signal problems.
Finally, in April 2019, Qualcomm and Apple issued a joint statement stating that both parties agreed to abandon all litigation worldwide. The settlement agreement includes Apple paying Qualcomm a settlement fee of US$5 billion to US$6 billion, as well as a chipset supply agreement. Since then, starting with the iPhone 12 series, Apple has returned to Qualcomm.
However, Qualcomm said at the time that as part of the agreement, the licensing period between it and Apple was six years and could be extended for two years. Apple told the Supreme Court that it would still face the risk of litigation after the settlement agreement expires in 2025 or is extended by two years to 2027.
In order to solve the problem of research and development capabilities on baseband chips, in July 2019, Apple announced that it would acquire Intel’s smartphone baseband business for US$1 billion. According to the agreement, after the transaction is completed, Apple will receive 2,200 employees, related IP and some equipment from Intel.
After taking over Intel’s technology and talents, in December 2020, Apple executives publicly announced plans to develop their own baseband chips. In the past two years, Apple's self-developed A series chips and M series chips have also been recognized by the market.
Faced with Apple’s approaching step by step, even Qualcomm itself believes that Apple’s self-developed baseband chip is about to succeed. In November 2021, Qualcomm Chief Financial Officer Akash Parshiwala said that only 20 of the iPhone models Apple will ship in 2023 will use Qualcomm 5G modems.
Previously, the market had expected that the iPhone 15 launched by Apple in 2023 would all use self-developed chips for the first time. The 5G baseband chip would use TSMC’s 5nm wafer production, and the radio frequency IC would use TSMC’s 7nm production. A17 The application processor will be mass-produced using TSMC’s 3nm technology. Once Apple switches to a self-developed baseband, it will not only reduce costs, but also reduce its dependence on Qualcomm.
Regarding the prospects of Apple’s self-developed iPhone 5G baseband chip, Ming-Chi Kuo said that although the progress of self-developed chips is hindered, Apple will continue to develop its own 5G chips, which may require 2-3 years of research and development. "But by the time Apple succeeds in research and development and can replace Qualcomm in the iPhone, Qualcomm's other new businesses should have grown enough to offset the negative impact of the loss of iPhone 5G chip orders."