• Apple reached a settlement with chipmaker Qualcomm on Tuesday, resolving the companies’ longstanding legal dispute over technology royalties and patents.
  • Intel, a supplier of modem chips for Apple, simultaneously announced that it’s crashing out of the race to make 5G chips for phones.
  • A source with direct knowledge of the settlement told Nikkei Asian Review that it’s too late for Apple to purchase Qualcomm chips this year, but the company will start purchasing them next year.
  • That suggests there will be a 5G iPhone in 2020.
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Apple’s settlement with chipmaker Qualcomm means it can fire up the engines on 5G iPhones.

Apple on Tuesday reached a settlement in its gnarly legal fight with Qualcomm. The dispute revolved around a royalty dispute over Qualcomm’s premium modem chips. The settlement included an undisclosed payout from Apple to the chipmaker.

Previously Wall Street analysts had voiced concerns that Apple was lagging in the race to faster 5G phones, in part due to its fight with Qualcomm.

Soon after news broke that the companies had settled, Apple’s chosen supplier for its future 5G smartphones, Intel, announced it was pulling out of the 5G modem race entirely. “It has become apparent that there is no clear path to profitability and positive returns,” said CEO Bob Swan.

Read more: What is 5G, how fast is it, and when is it coming?

A source with direct knowledge of the Apple-Qualcomm settlement told Nikkei Asian Review that Apple would be quick to pick up the pace.

"It is too late for Apple to use Qualcomm's chips this year, but for 2020 it will purchase modem chips, including 5G modem chips, from the chipmaker for iPhones after finalizing the deal," the source said.

Another source familiar with the matter told Nikkei that Apple had previously harbored doubts about relying on only one modem supplier, i.e. Intel, if it wanted to make a 5G phone on time.

"Apple had been a little concerned whether a sole supplier for modems could affect the company's plan to introduce its first 5G smartphone next year," the second source said.