Apple may use Intel or MediaTek chip in next iPhones: Qualcomm

Apple and Qualcomm are embroiled in a legal battle. Apple argues the chip maker has unfairly used its dominant position in mobile chips to force it and other phone makers to pay unfair technology licensing fees.

Qualcomm expects Apple to ditch its modems for the next iPhones (Bloomberg)

Qualcomm Chief Financial Officer George Davis said Apple likely won't use its cellular modems in the next iPhones, cutting the chip maker out of one of the consumer electronics industry's best-selling products.

In prepared remarks during an earnings call with analysts Wednesday, the CFO said Qualcomm expects Apple to use a competitor's modem in the new iPhones and will only use Qualcomm's modems in older models.

Apple sometimes buys parts from suppliers without indicating which specific products they will be put into. The company had been using Qualcomm modems -- chips that allow phones to make calls and connect to cellular data networks and the internet -- since 2011, but started mixing in supply from Intel in 2016. MediaTek also makes wireless modem chips.

Apple and Qualcomm are embroiled in a legal battle. Apple argues the chip maker has unfairly used its dominant position in mobile chips to force it and other phone makers to pay unfair technology licensing fees.

Qualcomm has previously said it wasn't including any revenue from Apple in forecasts, so Wednesday's comments confirm an existing concern among analysts and investors.

"This is a very dynamic industry. We're being very clear that we're not in the next product launch," Qualcomm President Cristiano Amon said on the call. "We'll continue to invest in modems. "If the opportunity presents itself, we will be a supplier of Apple."

Failed NXP deal

Qualcomm is set to scrap its $44 billion bid for rival chipmaker NXP Semiconductors NV after China failed to approve the industry's largest-ever deal before a final deadline.

The deal may be the highest profile victim yet of the trade spat between China and the US, with every other jurisdiction in the world clearing the bid months ago. Qualcomm had until midnight in New York on July 25 to get sign-off from Chinese regulators, who have delayed approval for months. Neither the companies nor China have commented in the hours after the deadline passed.

Unveiled in October 2016, the collapsed deal is a blow to both. Qualcomm will be forced to go it alone in its push into automotive silicon and reduce its reliance on the slowing smartphone market, where it's facing more competition and legal battles with customers. Earlier on Wednesday, Qualcomm said it intends to pay NXP a $2 billion breakup fee and plans to buy back as much as $30 billion in stock if the purchase is scrapped. NXP's management, after almost two years on hold, will now have to find a way to convince customers and investors it has a strong future as an independent company.

"We didn't see anything in the near-term that would make it worthwhile to change the timing. There were probably bigger forces at play here than just us," Qualcomm Chief Executive Officer Steve Mollenkopf said in an interview before the deadline. "We are still fans of the deal and the logic behind the deal."

(With inputs from agencies)