Qualcomm is now alone at the top of the 5G chip market.
By Brian Fung Brian Fung Reporter focusing on telecommunications, media, and competition Email Bio Follow April 18 at 4:15 PM The market for a critical component in next-generation smartphones is undergoing a dramatic shift at the dawn of the 5G era.
The deal could mean Apple’s future mobile devices will use Qualcomm’s chips to connect to high-tech 5G networks, which promise ultra-fast download speeds and access to new technologies, apps and services. Qualcomm’s major competitors now are China’s Huawei and South Korea’s Samsung. But those companies produce chips primarily for their own lines of branded smartphones, rather than selling them to phone makers like Apple.Qualcomm also competes in the chip market with Taiwan-based MediaTek, said Roger Entner, an industry analyst at Recon Analytics. But MediaTek, he said, is typically found in lower-end devices, not premium phones like the iPhone.
By playing one company off the other, Apple hoped to keep its costs down. But with Intel out of the market, Apple can no longer count on that dynamic. Nor can any other phone maker that must buy their 5G chips on the open market. Some have speculated that Apple, much like Samsung and Huawei, could seek to design its own chips in the future — either to gain independence from Qualcomm or to compete head-to-head on wireless chips. Several Apple job listings have suggested the company may be exploring that strategy. But analysts said it can take years of investment and hard work to develop what can be purchased from other vendors in an instant.
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