Apple, Qualcomm may launch a 5G iPhone in 2020

On Tuesday Qualcomm and Apple decided to resolve their demands, ending their ongoing legal battle around the world, likely that iPhones may get 5G chips sooner. But that doesn't mean we'll get 5G iPhone this year. Apple may introduce a 5G device in the year 2020. As part of the agreement, Apple would make a payment to Qualcomm for an undisclosed amount.

The two companies, which have been locking horns over a worldwide patent infringement case, have reached a six-year license agreement that can extend for two more years. They also agreed that the Qualcomm chipset will appear on Apple's iPhones in a multiyear chipset supply agreement. "Qualcomm and Apple today announced an agreement to dismiss all litigation between the two companies worldwide. The settlement includes a payment from Apple to Qualcomm," Apple wrote in a press release.

The company had been working with Intel on 5G chips, but the chip maker had problems developing the product. A few hours after Apple and Qualcomm announced their liquidation on Tuesday, Intel said it is coming out of the 5G smartphone modem business. Intel's fight with 5G is probably what brought Apple to the negotiating table with Qualcomm.

Apple did not respond immediately to a request for comment. Steve Mollenkopf, CEO of Qualcomm, during an interview with CNBC, declined to say when a 5G modem could appear on the iPhone.

"We won't talk about Apple's product plans," he said. "There's obviously the beginning ramp of 5G broadly."

The modems are complex

Putting a modem in a phone is not as simple as buying the component. And a phone needs more than a modem to connect to a cellular network. Phone designers need access to the modem manufacturer's software, and phone also requires radio frequency chips and other components that take up space on the device. The size and capabilities of the modem can dictate aspects of the design of the iPhone itself.

Phone manufacturers must also be able to test modems on their devices before starting mass production. Operators require time to certify the phones to ensure they work properly in their networks and provide the promised upload and download speeds.