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Apple wanted Qualcomm chips in iPhone XS/XR, but Qualcomm refused
- An antitrust trial against Qualcomm is happening now in California.
- During the trial, Apple’s COO claimed that Qualcomm refused to supply modem chips for the latest round of iPhones.
- Qualcomm’s CEO also claims that it paid $1 billion to Apple to be the sole modem supplier for iPhones.
An antitrust trial between the United States Federal Trade Commission and chipset manufacturer Qualcomm is currently in session in San Jose, California. During the proceedings, Apple Chief Operating Officer Jeff Williams took the stand and dished out some notable information regarding the company’s strained relationship with Qualcomm.
According to a tweet from reporter Shara Tibken, Williams testified that Apple sought the use of Qualcomm chips (specifically modems) for use in the Apple iPhone XS, XS Max, and XR. However, Qualcomm refused the request due to the ongoing legal troubles between the two companies.
The tweet is below:
.@Apple wanted to use @Qualcomm chips in the iPhone XS, XS Max and XR, but Qualcomm wouldn’t sell it modems because of the court battles, Jeff Williams testifies at @FTC trial— Shara Tibken (@sharatibken) January 14, 2019
If this is true, Qualcomm likely pushed away billions of dollars with the loss of this potential sale of its modems to Apple, one of the world’s largest producers of smartphones.
However, Qualcomm likely made the decision based on the allegations that Apple doesn’t keep up with its licensing payments to Qualcomm. Recently, iPhones have had to be pulled from store shelves in various countries due to the ongoing legal fights between the two companies, as Qualcomm attempts to force Apple to pay back payments on those fees.
Apple ended up using Intel modems instead for its latest batch of iPhones.
During the same FTC trial, according to Reuters, Qualcomm CEO Steve Mollenkopf stated that his company paid Apple $1 billion to become the sole supplier of modem chips for Apple. This 2011 deal is part of the reason Qualcomm is fighting Apple so hard on getting licensing fee payments. Under the deal, Qualcomm fronted $1 billion in cash to Apple and gave the company a per-unit discount. In return, Apple gave Qualcomm exclusive rights to supplying iPhone modems.
The FTC, however, is arguing that Qualcomm engages in anti-competitive behavior to keep other chipmakers from supplying to Apple. Qualcomm denies this.
The trial is expected to end sometime this week, although it could go for much longer.