By Jof Enriquez,
Follow me on Twitter @jofenriq
Intel CEO Bob Swan said the company will not be making 5G modems for smartphones because there is "no clear path to profitability and positive returns" for this market segment, but Intel still intends to invest in its 5G infrastructure business.
"5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property," Swan said in a press release, according to CNN. "We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world."
The announcement came hours after Apple and Qualcomm agreed to settle their six-year-long legal battle over licensing fees. Apple had contended that Qualcomm's licensing fees are exorbitant, and that it was forcing licensees to accept a "no license, no chips" package that Apple alleged was illegal.
Before the deal, Apple previously had picked Intel to supply it with 5G chips for future iPhones. Several media reports, however, suggested that Intel had difficulty meeting Apple's demand for 5G chips. Intel's exit means that Apple now is one supplier short, at least until it fully develops its in-house chips.
Under the terms of the settlement, Apple will pay Qualcomm an unspecified amount, and will be able to buy Qualcomm chips once again. Also, all litigation between the two companies will be dropped, and they will work together in the 5G space.
“The energy of the companies right now is let’s figure out how to ramp up as quickly as possible,” Qualcomm CEO Steve Mollenkopf told CNBC. “That’s where the focus is, that’s what we are excited about.”
Apple could release its first 5G iPhone in 2020 with chips from Qualcomm and Samsung, according to TF International Securities analyst Ming-Chi Kuo, reported CNBC.
Kuo's noted stated: "We expect Apple will likely adopt 5G baseband chips made by Qualcomm (focus on mmWave markets) and Samsung (focus on Sub-6 GHz markets) for lowering supply risk, reducing costs and having better bargaining power."
He added that the release of 5G iPhones is likely to drive the next upgrade cycle for iPhone users, and that 5G could necessitate new designs for many iPhone parts, starting with the modem or “baseband chip” — but also including its antenna, RF-front end, and mainboard, reported CNBC. Kuo also claimed recently that Apple is redesigning printed circuit boards in 2019 iPhones to accommodate a bigger battery for future models, as 5G devices are expected to require more power to operate.
Meanwhile, OnePlus CEO Pete Lau told The Verge that the company's upcoming flagship smartphone will be called the OnePlus 7 Pro and will include a significant display upgrade that is "super-smooth and very crisp" — plus a 5G option. Lau seems to be touting the phone’s display — rumored to be 90Hz/frames per second — more than its 5G connectivity.
However, The Verge notes, "OnePlus has the advantage of not being hated by the US authorities as Huawei is, giving it access to a hugely important and lucrative market that’s willing to spend more to get more."
Despite being undermined by the United States and allies who have blocked Huawei from their markets, the Chinese networking giant seems unfazed and posted a strong 39 percent increase in revenue and 8 percent rise in profit for the first quarter, buoyed by growth in smart devices and streamlining measures, reported CNN.
Huawei said that, as of last month, it had signed 40 commercial contracts for 5G with leading global carriers, and had shipped more than 70,000 5G base stations globally. The company also claimed a couple of 5G firsts this week: the world's first 5G telematics module for cars, and the first 5G-enabled access point for Wi-Fi 6. The MH5000 module is the first 5G communications hardware for the automotive industry, and is based on the Balong 5000 5G chip, which Huawei launched in January, reported Venture Beat.
In an interview with CNN, Huawei CEO Ren Zhengfei said company personnel have responded to recent developments in a positive way, "Since the U.S. has begun attacking us, however, everyone has really come together and wanted to improve our products."
Related, U.S. President Donald Trump and the Federal Communication Commission (FCC) last week announced several initiatives to jumpstart 5G, saying, “The race to 5G is on and America must win.”
“It’s a race our great companies are now involved in,” Trump said, as reported by CNBC. “According to some estimates, the wireless industry plans to invest $275 billion in 5G networks, creating 3 million American jobs quickly, and adding $500 billion to our economy.”
FCC expects 5G will support 22 million jobs by 2035, including 20,000 tower technician positions, reported RCR Wireless.
On U.S. policy to block Huawei, FCC Chairman Ajit Pai told CNBC, “We believe that the security and reliability of 5G is absolutely important, not just as a matter of national competitiveness, but also as a matter of national security.”
And yet, some experts believe the U.S. still lacks a clear 5G strategy that goes beyond attacking Huawei, the biggest supplier of telecommunications equipment in the world.
“I think they’ve been rather leaden-footed in the way they’ve responded,” Nigel Inkster, a former British intelligence official and senior adviser at the International Institute for Strategic Studies, told CNBC’s Beyond the Valley. “Firstly, by lacking an explicit, government-articulated strategy in relation to 5G which is only now starting to emerge, but also in arguing or shaping the challenge from China and from Huawei solely as an espionage issue.”
Its allies have heeded the call of the U.S. to sideline Huawei, but the U.S. is finding it tougher to exert its influence on the matter elsewhere. Southeast Asia, in particular, is finding Huawei's value proposition greater than fears of alleged espionage via network backdoors. Huawei reportedly has inked multiple carrier deals in Thailand, Singapore, and the Philippines to roll out 5G, according to Inkstone News.
FCC is preparing for "the largest spectrum auction in our nation’s history” starting on Dec. 10, 2019 — when carriers can bid on 3,400 MHz of new spectrum in the upper 37 GHz, 39 GHz, and 47 GHz spectrum bands — as part of the agency's efforts to promote 5G and the Internet of Things.
The U.S. electric, gas, and water utility sectors, however, called on FCC to allocate enough spectrum to the highly critical national grid infrastructure, and not focus on the telecoms industry alone.
“I don’t think the FCC is doing well for the economy or the energy sector,” Joy Ditto, president and CEO of Utilities Technology Council, according to Forbes. “They have the mandate [to advance 5G] and they are fulfilling their mandate. They aren’t really listening to us [in the energy sector].”
For one, “Electric utilities rely heavily on communications technologies to ensure electric reliability. They deploy radio communications when there is an outage situation or a need to restore power. But they also use it for day-to-day activities like monitoring their systems via SCADA, a digital communications technology that sits on a telecommunications network,” said Ditto.
In contrast, FCC's proposal to strictly enforce a federal law prohibiting local governments from charging franchise fees beyond 5 percent was welcomed. The Phoenix Center for Advanced Legal & Economic Public Policy Studies has claimed that localities have been bending the Cable Act of 1992 by asking cable television operators for in-kind concessions like providing public access channels or planting flowers during construction projects, as well as paying additional franchise fees for offering broadband services.
"The Phoenix Center study applauds the Federal Communication Commission’s (FCC) effort to formally subject all monetary and in-kind demands to the 5 percent cap, saying the over taxation by governments ‘reduce(s) the expected flow of revenues and/or increase(s) the cost of an investment project,’" reported Townhall.
In other news, Verizon announced its "Built on 5G Challenge" to find the best 5G-related products, services, and applications. All winning teams will have access to Verizon’s 5G Labs to develop their ideas. The top team will receive $1 million dollars.
Meanwhile, Swisscom became the first Swiss operator to switch on a 5G network in Switzerland, reported leNews. The network went live simultaneously in 102 locations across the country. The carrier aims for 90 percent nationwide coverage by the end of 2019.