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Apple’s COO Says Qualcomm Refused to Provide Chips for 2018 Phones

Mark Gurman and Kartikay Mehrotra
Apple’s COO Says Qualcomm Refused to Provide Chips for 2018 Phones

(Bloomberg) -- Apple Inc. Chief Operating Officer Jeff Williams said Qualcomm Inc. refused to provide cellular modems for the 2018 iPhones after Apple sued the chipmaker in 2017.

Williams’s testimony Monday in the Federal Trade Commission antitrust trial against Qualcomm, indicates the chipmaker forced Apple to use Intel Corp. modems exclusively in the iPhone XS, iPhone XS Max, and iPhone XR released in September and October, rather than the decision being a choice by the Cupertino, California-based iPhone maker. Williams said he tried to negotiate with Qualcomm to provide Apple with chips for the latest iPhones, but the company refused.

In October 2017, however, Qualcomm said it had already “tested and released to Apple,” modems that could be used in the new iPhones. “We are committed to supporting Apple’s new devices consistent with our support of all others in the industry,” the chipmaker said in a statement at the time to Bloomberg News.

Apple executives testified earlier Monday that the company prefers to source components from multiple providers. Dual-sourcing chips allows Apple to drive down costs, but also provides a contingency plan if there is an issue with one of the suppliers.

Williams testified that Qualcomm continued to provide chips for Apple’s older iPhones.

The government has accused the San Diego-based company of using its position as the world’s leading maker of smartphone chips to force customers to use its products and squeeze them for high patent licensing fees.

--With assistance from Ian King.

To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net;Kartikay Mehrotra in San Francisco at kmehrotra2@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Andrew Pollack

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