Apple (AAPL) has poached a leading communication chip engineer from Qualcomm (QCOM), the company it is currently in a legal battle with over wireless modem royalties, prompting speculation that the iPhone-maker is keen to start developing its own in-house solutions.
Esin Terzioglu, who played an important role in helping Qualcomm become an industry leader in cellular modem chip technology, announced the move, which was first highlighted by analyst Neil Shah of Counterpoint Research, on his LinkedIn page.
"It has been my honor and privilege to have worked with so many talented and dedicated individuals at Qualcomm where we accomplished great feats as a team (10nm bring up was a doozy and the team did an amazing job bringing the first product to market!!!)," Terzioglu wrote in his post on the social networking website. "I feel privileged for the opportunity to continue my career at Apple. Stay in touch."
What Is Apple Playing at?
Apple’s decision to hire one of Qualcomm’s leading engineers has fueled speculation that it is keen to develop wireless modem chips in-house. Qualcomm was the sole provider of cellular modems used in iPhones and iPads, until Apple fired a lawsuit against the company in January, alleging that the chip maker was charging excessive royalties for its patented products. (See also: Qualcomm Countersues Apple.)
Since then Apple has opted to use Intel’s (INTC) rival technology in some versions of the new iPhone, even though the Santa Clara-based company’s products are believed to be inferior to Qualcomm’s offerings. At the same time, Apple has reportedly been working on developing its own cellular chip, a challenging feat given the expensive and complicated nature of the technology. (See also: Qualcomm Vs. Intel In Server Chip Market.)
However, with Terzioglu now on board, Apple’s bid to stop outsourcing could now become more achievable. Raymond James (RJF) analyst Tavis McCourt believes this to be the case. In a note reported on by Barrons he said, “The data point is the latest in a list of instances suggesting that Apple has plans to develop full SoCs (system-on-a-chip) in-house for future mobile devices." He added, "The current A series processors lack a baseband modem and Terzioglu’s move seems to suggest that Apple is acquiring the necessary expertise to develop such technology."