Implications of Apple-Qualcomm Settlement on Wireless Communications Ecosystem
Intel Corporation’s exit from the premium 5G smartphone modem chipset business creates a range of opportunities – and risks – for Chinese companies seeking to invest and capitalize on the emerging industries and use cases associated with 5G wireless technology. Intel’s sudden announcement that it would no longer pursue 5G modem chipsets for smartphones was prompted reportedly by a comprehensive settlement agreement between Apple Inc. and Qualcomm Inc., whereby Qualcomm would be the exclusive supplier of 5G modem chipsets to Apple’s iPhone. With Qualcomm supplying Apple’s 5G modem chipset needs exclusively, and Intel reportedly lagging behind in its commercial release of its own 5G modem chipset for smartphones, Intel reportedly could not compensate for the lost sales revenue and volume due to the loss of Apple as a future 5G modem chipset customer to justify its continued activities in the 5G smartphone modem chipset space.
With Intel no longer in the 5G smartphone modem chipset picture, there are an estimated five remaining major players in varying competitive positions to offer 5G modem chipsets for mobile phones: Huawei, UniSOC, Samsung, Mediatek, and of course, Qualcomm. Although the 5G modem chipset offerings by each of these companies likely vary along important performance parameters, including uplink and downlink speeds, die size, and power efficiency, there are a range of 5G-related use cases that present attractive opportunities for these remaining 5G modem chipset providers. Beyond client-side mobile phone applications, use cases for individual platforms such as autonomous vehicles, autonomous drones, smart home appliances, augmented and virtual reality platforms, and smart wearables (such as fitness and medical monitoring devices) present a total addressable market measured in hundreds of billions of USD globally. The advent of 5G-enabled smart homes, smart factories, smart transportation systems and smart cities illustrates that the potential 5G-related market for modem chipsets will present supply challenges – and opportunities – for all providers of 5G modem chipsets. Furthermore, each of the 5G modem chipset providers will need to demonstrate that their respective 5G modem chipset offerings are competitive on a price versus performance comparison, and suitable to handle specific 5G use case demands, including those associated with enhanced mobile broadband (eMBB), ultra-reliable low latency communications (URLLC) and massive machine type communications (mMTC).
The departure of Intel from the 5G modem chipset business also presents important intellectual property opportunities for Chinese companies. Although it remains to be seen to what extent Intel will continue to participate in next generation wireless standard setting activities at 3GPP, Intel likely will reassess its activism in the realm of wireless communications standard setting. A diminished presence and contribution activity in wireless standard setting by as major an innovator as Intel likely will create a vacuum for other players to contribute proprietary technologies for adoption into wireless standards, including into future 3GPP releases of the 5G standard. Standards essential patents, as well as patents covering implementations of the wireless standards, can be valuable assets in a hyper-competitive industry as the wireless communications industry is. Such intellectual property can become important assets in maintaining a company’s technology edge against competitors, preserving a company’s freedom-to-operate against aggressive competitors, or become important components of an intellectual property licensing program.
COMMENT ON THE APPLE QUALCOMM SETTLEMENT Jay P. Kesan COMMENT ON THE APPLE QUALCOMM SETTLEMENT Jay P. Kesan Apple began a litigation campaign against Qualcomm in January 2017 for allegedly charging unreasonable patent royalty fees for smartphone modem chips and for abuse of its monopolistic power in the cellular industry.
Implications of Apple-Qualcomm Settlement on Wireless Communications Ecosystem Steven Bowers.Intel Corporation’s exit from the premium 5G smartphone modem chipset business creates a range of opportunities – and risks – for Chinese companies seeking to invest and capitalize on the emerging industries and use cases associated with 5G wireless technology.