Huawei Open to Sell 5G Modems To Apple

With the latest debacles Huawei is now trying to sell 5G modems to Apple. In the latest turn of event the company might be open to sell its 5G Balong 5000 chipsets exclusively to Apple.

Earlier this year a company representative stated “Balong is mainly for supporting Huawei’s smart products, such as phones and IoT products, and is currently for Huawei’s internal use only.”

Huawei is trying to become the world largest smart phone in 2020- by offering 5G it is an olive branch to its bigger competitor. Which looks like a surprising move none less, it is still unclear why this move. Neither Huawei nor Apple has confirmed any conversations have been taking place.

The move from Huawei might be because Apple appears to be in a tough spot with its sole modem supplier, Intel. The chipmaker provides the wireless modems that go into all iPhones and iPad, and it said late last year that its 5G-ready XMM 8160 modems would be available for its customers in the second half of 2019.

Rumors have surface that Apple might have lost confidence in Intel after the chipmaker failed to meet certain development deadlines. (When asked for comment, an Intel spokesperson simply said the company “plans to support customer-device launches in 2020 with its XMM 8160 5G multimode modem.”)

Meanwhile, Apple’s protracted legal battles with Qualcomm continue to make murky the possibility of a future 5G partnership. The jury in the Qualcomm-Apple case decided earlier this month that Apple owes Qualcomm $31 million for three counts of patent infringement, and the two companies are set to re-enter the courtroom April 15 in a billion-dollar battle over royalty payments. It’s possible that Apple and Qualcomm could bury the hatchet and work together in the future, but it’s unclear whether they could sort everything out in time to produce a 5G iPhone for 2020.

Coincidentally, a separate FTC-Qualcomm lawsuit also provided clear confirmation that Apple was open to working with different modem makers as it began charting out its path to 5G. Apple supply chain executive Tony Blevins said in his testimony that the company had looked into 5G chipsets produced by Samsung and Mediatek as part of an initiative called “Project Antique” because it didn’t want to rely on a single vendor.

“The entire concept of Project Antique was to find a second supplier,” Blevins testified. “No offense to [Intel] but we don’t want to be single-supplier with them.” Unfortunately, there are questions as to whether it would make sense for Apple to use modems from these outside suppliers, as USB analyst Arcuri pointed out in his research note.

“Samsung/Mediatek are unlikely [5G] solutions either technically (Mediatek) or practically (Samsung),” he said.

If Intel no longer has Apple’s trust, Qualcomm isn’t an option yet, and Samsung and Mediatek aren’t practical either, Huawei’s offer of openness could provide Apple with the components it needs to get a 5G iPhone out in 2020. But could such a deal with Huawei ever actually come together? Based on optical and political considerations, we’re inclined to say “probably not.” Even so, it isn’t hard to see how a working relationship between Huawei and Apple could benefit both companies to some extent.

While a potential Apple-Huawei relationship could prove fruitful, there are, obviously, plenty of reasons why Apple would want to steer clear of a deal like this.

For one, recent reports allege that Huawei targeted has Apple employees and supply chain partners on multiple occasions in a bid to crack the Cupertino company’s trade secrets. In one such scenario, Huawei reportedly misled a supplier with news of a potentially lucrative contract in order to learn more about the Apple Watch’s heart rate sensor. And beyond that, The Information reported that a former Apple employee who interviewed for a new job at Huawei said it seemed the company was more interested in what they could learn about Apple than in that person as an actual applicant.

There’s also little question that Huawei has drawn significant inspiration from Apple when it comes to product design. Though they have garnered generally positive reviews, Huawei’s MateBook series of laptops look nearly identical to some of Apple’s computers — it can be hard to imagine that Apple would ever want a working relationship with such a blatant copycat. China is well-known to copycat products from other companies.

With US government has banned use of Huawei equipment by federal agencies and has been campaigning around the world for friendly governments to do the same. Meanwhile, Huawei is suing the United States over that ban and is also dealing with two other lawsuits pertaining to theft of trade secrets, bank fraud and violating trade sanctions in Iran (Huawei has pleaded not guilty to all charges.)

By entering into a deal with Huawei — even if the devices that result from it were only sold in China — Apple could quickly find itself in a difficult situation with the US government. Considering the tenuous relationship that already exists between Apple and the Trump administration, publicly aligning with Huawei might be the last thing Tim Cook would want to do.

Most likely a deal will not be reach between both companies. To be continued.