MWC18: Where will Apple get 5G iPhone chips?

The first 5G networks should begin launching from mid-2019. This will have a direct impact on Apple's business, posing problems and opportunity for the iPhone maker.

Apple, iOS, 5G, mobile, iPhone, mobile world congress
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If there is one current conversation at Mobile World Congress that is going to have a profound impact on our daily life, it is expectation that the first "mobile broadband" 5G networks should begin launching from mid-2019. This will have a direct impact on Apple’s business, posing problems and opportunity for the iPhone maker.

Apple is a mobile company

You can sell all the connected devices you like, but they are meaningless if they don’t have a network to link them all together. Not only that, but as the number of mobile devices in use increases, you need intelligent networks capable of processing and prioritizing tasks, from edge to core. You need real-time analytics, artificial intelligence, network slicing, and the capacity to carry millions of messages from billions of connected devices reliably, without losing data, connectivity, or network integrity.

Networks need to be able to handle high-bandwidth applications, such as video, augmented and virtual reality applications, as well as bandwidth-heavy tasks and services that haven’t been invented yet. You do not want network congestion to cause connected, autonomous vehicles to hit the pedestrian rather than stop.

The network will bind everything, from your smart devices to your connected road infrastructure, power grids, the lot. (While there will be alternative networks, particularly across Industry 4.0 applications, it is quite clear that there is a historical tendency to consolidation in network infrastructure.) All this and more is kind of what 5G (with its 35 Gbps bandwidth) promises us.

Who makes 5G chips?

We know Apple is testing 5G tech. What we don’t know is where Apple will get the 5G modems it is going to need for its connected devices.

That Apple is engaged in a race to 5G is clear. It already holds several 5G patents. It joined the NGMN Alliance as a partner to help develop 5G in 2014, and since then, it has introduced its own take on SIM technology in the form of the Apple SIM you’ll find inside an LTE-capable iPad Pro.

These investments show Apple understands the strategic importance of 5G. To acquire the tech to support it, the company has only a few choices: Qualcomm (a company with which it is in dispute), Samsung (enough said), long-term partner Intel (the most likely initial 5G partner — Apple and Intel are apparently deeply ensconced in a 5G effort), and Huawei (under investigation in the U.S.) as potential sources of supply.

Designed in California?

Another possibility is that Apple chooses to develop its own 5G modem, industry watcher Jeremy Horowitz explains, though he adds: “I can’t see Apple going its own way with the first 5G iPhone. 2020? 2021? Maybe.”

That makes sense. I don’t think 5G support will become a "must-have" until network infrastructure roll-outs become more universal, which is expected to be c. 2020.  

The company has the ability. Apple’s senior vice president of hardware technologies, Johny Srouji, leads a team Apple modestly describes as “one of the world’s strongest and most innovative teams of silicon and technology engineers.”

His team has already achieved a great deal, including Face ID and Touch ID chips, A- and W- series processors, motion co-processors, sensors, GPUs, the Secure Element, and Neural engines.

Srouji's team is also recruiting for talent in 5G-related skills, with 90 jobs currently advertised. It has been growing that team for months.

I’d argue that this suggests 5G development at Apple is already quite advanced, and I think this is a story we’ll be returning to more often across the next 18 months, particularly as the company moves to introduce its next generations of connected wearable devices.

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