UBS analyst Timothy Arcuri’s main argument surrounding the delay is the fact that Apple doesn’t have a clear choice for a 5G modem supplier.
Apple is currently involved in an unresolved legal dispute with the mobile industry’s main modem manufacturer, Qualcomm. As a result, a 5G-capable iPhone featuring Qualcomm’s equipment is currently off the table.
There’s “increasing potential that Apple may not be able to ship a 5G iPhone for 2020,” writes Arcuri in the note. He goes on to say that the tech giant’s first 5G-capable phone likely won’t drop until 2021.
As a result of its ongoing battle with Qualcomm, the iPhone XS and iPhone XR only use Intel modems following Apple moving away from using the San Diego, California-based company’s hardware with the last few iterations of the iPhone.
For example, starting with the iPhone 7 and 7 Plus, only some versions of Apple’s iPhones featured Qualcomm modems while others included Intel modems.
Intel’s 5G modem roadmap indicates that the company’s 5G chipsets will likely be released by the end of next year, but Arcuri says that the company will likely miss this deadline. There’s also a possibility Apple could manufacture its own modems, though this is unlikely.
The earliest we’ll likely see a 5G iPhone is 2021, according to UBS. In the Canadian market, this won’t be a significant issue given 5G networks aren’t expected to be available until 2020 and 2021. Rogers is currently working on a multi-year 5G strategy with Swedish manufacturer Ericsson. Bell and Telus are currently running various 5G trials with Huawei.
That said, the Chinese smartphone and equipment manufacturer has found itself in the middle of a furor of controversy following the arrest of Huawei’s global CFO Meng Wanzhou. She faces extradition to the U.S. after the country’s Justice Department laid 13 charges of bank and wire fraud against her, Huawei and its subsidiary Skycom.