Apple demanded $1 billion for chance to win exclusive iPhone contract

Apple Considered Samsung Media Tek to Supply 5G Modems for 2019 iPhones

Apple Considered Samsung Media Tek to Supply 5G Modems for 2019 iPhones

Earlier in the day, Apple supply chain executive Tony Blevins testified that it was Apple's practice to pursue at least two suppliers and as many as six for each of the more than 1,000 components in the iPhone.

Before 2016 rolled around, Apple used Qualcomm chips in the iPhone lineup. Those networks are expected to start rolling out this year and provide faster data speeds than current 4G networks. It was revealed during the testimony of an Apple executive at the trial between Qualcomm and Apple on Friday that the Cupertino, California-based company has held talks with Samsung on sourcing 5G modem chips for future iPhones.

Antitrust regulators have argued the deal with Apple was part of a pattern of anticompetitive conduct by Qualcomm to preserve its dominance in modem chips and exclude players like Intel. The company has long wanted multiple suppliers for cellular chips but inked an exclusive agreement with Qualcomm as it offered substantial rebates on patent license costs if it was granted exclusivity.

This, the court heard, is the root of the reason why other suppliers weren't supplying modem technology for Apple products.

"The entire concept of Project Antique was to find a second supplier". But Apple's lawsuit against Qualcomm filed in early 2017 caused their business relationship to change "in a very profound and negative manner", leading to using only Intel's modems for the phones released past year. No offense to [Intel] but we don't want to be single supplier with them.

Needless to say, that is the argument for the courts, but the sheer fact that a huge chunk of Qualcomm's revenue comes from royalty fees instead of chip sales adds water in Apple's argumentation mill that the double-dip licensing fees that Qualcomm demands are excessive. Citing sources, Bloomberg previously reported that Apple would not release such a phone until 2020.

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