Apple: Qualcomm refused to sell modem chips for the latest range of iPhones

Apple COO Jeff Williams claims that the company had no choice but to go to Intel

Apple was forced to source the modem chips for its latest iPhone XR, XS and XS Max smartphones from Intel because Qualcomm refused to supply them.

That's according to Apple chief operating officer Jeff Williams, in testimony to the US Federal Trade Commission investigation into alleged antitrust behaviour by Qualcomm.

While Qualcomm has continued to supply the modem chips for the iPhone 7 and 7 Plus, it refused to provide the components for Apple's latest iPhones, following Apple's decision to take action against Qualcomm over what it claims are anti-competitive business practices.

According to Williams' testimony, Apple originally planned to split its latest modem chip order between Qualcomm and Intel - rather than rely exclusively on Qualcomm - but turned to Intel to supply all the modems after Qualcomm refused. "In the end, they would not support us or sell us chips," Williams said.

Apple was working to return to a dual-source strategy for the parts, Williams added.

The fall out over the supply of modem chips could put Apple behind rivals in the race to get 5G-enabled smartphones to market this year.

Both OnePlus and Samsung have already announced plans to release devices based on Qualcomm's X50 modem later this year, but that option is not currently workable for Apple due to the ongoing litigation between the two companies.

Apple has also found in the past that Intel modems aren't quite as fast as Qualcomm's, forcing the company to cap the performance of Qualcomm modems to prevent some iPhones, which are otherwise identical, from providing better networking speeds.

Williams also revealed that Apple had been paying $7.50 per modem from Qualcomm, while Apple wanted to pay only one-fifth of this price.

However, Williams said that Apple didn't have much choice but to accept the price.

"The alternative was if you don't accept it, it just defaults to the contract manufacturer rate of $18, $17," Williams said, according to CNET. He continued: "We needed their chip supply. If we tried to pursue them legally, we wouldn't have access to the chips. We didn't have a lot of options."

Williams' comments appear to contradict testimony from Qualcomm's Mollenkopf from Friday. He said that as of spring 2018, Qualcomm was still trying to win a contract supplying chips for iPhones but that it hadn't "had any new business" from Apple since its previous contracts expired.

Yesterday, it was revealed that Apple had demanded a $1 billion payment from Qualcomm in return for the privilege of supplying the modem chips. In return, though, Qualcomm demanded exclusivity, with a higher price applying should Apple source the chips from other suppliers.