The truce between iPhone maker Apple and semiconductor giant Qualcomm has redrawn the battle lines in the 5G chip market just as smartphone makers and carriers begin to move forward with trial deployments of the ultra-fast networks. The two US technology giants last week settled an acrimonious two-year fight, which had threatened the sale of iPhones in several countries including China, with Apple signing a six-year licensing deal with Qualcomm under which it will use Qualcomm chips for its iPhones. Within a few hours, Intel, which has supplied modem chips for iPhones since 2017 and was developing 5G devices for Apple, said it was withdrawing from the market for 5G chips for smartphones, but will continue 5G investment in other product areas. That put Shenzhen-based Huawei Technologies in the spotlight as a major player up against Qualcomm in the 5G modem chip market even though the Chinese company currently only uses the devices in its own phones. Huawei’s 5G chip, the Balong 5000, is at least six months ahead of Qualcomm’s similar offering, according to Jean Baptiste Su, principal analyst with Atherton Research. Qualcomm’s X55 chip, unveiled at MWC 2019 earlier this year, will not appear in 5G smartphones until the end of this year or in early 2020 . The Balong 5000 will start shipping in June, first with the Huawei Mate X phone and the Mate 20 X 5G in July, he added. With Intel out of the picture, Qualcomm’s other major competitor in 5G component technology is South Korea’s Samsung Electronics, which also only produces chips for its own smartphones. Qualcomm claims 5G leadership in new phones coming this year Taiwan-based MediaTek, which competes in the lower end of the market, is not a direct competitor with Qualcomm at the high end, while China’s Unisoc, a subsidiary of state-linked semiconductor maker Tsinghua Unigroup, has just lost Intel as a technology partner. In February, Intel ended an agreement to share 5G modem technology with Unisoc amid heightened trade and technology rivalry between the world’s two biggest economies. The global market for 5G chipsets in smartphones is expected to grow at a compound annual rate of 75 per cent between 2019 and 2024 after expected commercialisation begins this year, according to research agency Mordor Intelligence. Qualcomm, a dominant player in communications chips, provides half of all core baseband radio chips used in smartphones worldwide. Apple and Qualcomm have for years been locked in legal fights, suing each other in jurisdictions around the globe for alleged monopolistic practices, patent infringement, and even intellectual property theft. Qualcomm won an injunction against Apple in Germany in December, which resulted in a sales ban of some older iPhones in the country. Apple was later able to start selling the iPhone 7 and iPhone 8 in Germany again after swapping out Intel modems for Qualcomm’s equipment. Mahathir’s visit to Huawei in Beijing seen as ‘endorsement’ Apple likely paid somewhere around US$5 billion to US$6 billion to settle its ongoing legal battle with Qualcomm, according to estimates by UBS analyst Timothy Arcuri, CNBC reported. Mike Feibus, president and principal analyst from Feibus Tech, said Apple did not have a choice. “I’m quite sure that if Apple felt it had another alternative, things would be different now. Intel was clearly ready to give up on 5G chipsets for smartphones, and agreed, for the benefit of Apple, to wait to announce until Apple settled with Qualcomm,” he said. “Given all the bad blood between them, Apple explored all the alternatives and concluded it had no other choice but to go with Qualcomm. Which means that it did not see any other viable suppliers.” Apple is already late offering smartphones that support next-generation 5G networks, deciding to hold off until at least 2020 before launching 5G-enabled iPhones, according to an earlier Bloomberg report, citing people familiar with its plans. Apple sourced exclusively from Qualcomm for its earlier iPhone models, but last year used Intel to supply roughly half of its 4G chips, a move seen as gaining leverage over Qualcomm in the face of the lawsuits. After Intel’s retreat on 5G modems, Apple has to rely on Qualcomm as its sole 5G modem supplier. Huawei’s Q1 revenue rises 39 pct as smartphone shipments jump Intel’s retreat from the 5G modem chip market means Qualcomm and Huawei have become “the most visible suppliers” in the market, said Glen Hunt, principal analyst from GlobalData. Hunt said the 5G device ecosystem will expand as equipment companies and chip makers continue to ramp up to support the roll out of the technology. Qualcomm supplies modem chips for Huawei’s mid-range smartphones across its Huawei and Honor product lines, as well as for the Chinese company’s Windows laptop, which is powered by ARM-based CPUs. However, in other respects they are competitors because Huawei’s HiSilicon semiconductor subsidiary designs communications and processor chips, though these devices are only for in-house use. Qualcomm has not settled its two-year licensing dispute with Huawei but the terms is likely to be much smaller than the one with Apple – somewhere in the US$1 billion ballpark – according to analyst Su. He expects the dispute with Huawei to be resolved quickly now that Apple and Samsung have resolved similar cases with Qualcomm. Although Huawei has not sold its in-house chipsets in the past, it is now “open” to selling its 5G chips and other silicon products to rival smartphone makers including Apple, its founder and chief executive Ren Zhengfei said in an interview this month. Intel pulls back from mobile chip business Despite Huawei’s change of mind, analysts believe ongoing tensions between the US government and the Shenzhen-based company would make that unlikely even if it was able to make such a deal. “Huawei clearly can’t sell 5G infrastructure or devices into the US market. But we don’t know if a phone maker already selling into the US market would be able to ship devices with Huawei 5G chipsets. It might work, but it’s risky,” said Feibus. “Plus, which smartphone maker already selling into the US would consider Huawei chipsets? Samsung? LG? OnePlus? The one that makes the most sense is Apple, and it seems that’s not on the cards,” he added. Su is also convinced that Huawei will not sell its 5G modems to other smartphone brands, despite Ren leaving open the possibility. “So Qualcomm will remain one of the only brand-agnostic suppliers of 5G chips worldwide, along with MediaTek and Unisoc,” said Su. Last year, US President Donald Trump blocked microchip maker Broadcom’s US$117 billion takeover offer for rival Qualcomm amid concerns that it would give China the upper hand in the 5G chipset market. Although not a mainland Chinese company, analysts believed the Singapore-domiciled Broadcom may have cut Qualcomm’s research and development budget after the takeover.