Google will tap Samsung Electronics Co Ltd (005930.KS) to supply the 5G modem for its next flagship Pixel smartphone, sources familiar with the matter told Reuters, signaling the first win for the Korean firm in a U.S. market dominated by Qualcomm Inc (QCOM.O).
Earlier this month, Google disclosed that it has designed its own processor chip to power its new Pixel 6 and Pixel 6 Pro high-end phones, ending its complete reliance on Qualcomm, which will still supply chips for the lower-priced Pixel 5A.
Nikkei Asia earlier reported Samsung will manufacture the processor for Google, a unit of Alphabet Inc (GOOGL.O). Two sources familiar with the matter told Reuters Samsung will also supply the 5G modem technology.
Samsung's move to provide Pixel's modem technology is important because the Korean firm is one of only three companies in the world capable of making 5G modems that connect devices to wireless data networks. The others are Qualcomm, the market leader by a wide margin, and Taiwan's MediaTek Inc (2454.TW).
Samsung widely uses its Exynos modem technology in its own flagship smartphones in Asia and Europe. But it has long relied on Qualcomm to provide modems for U.S. versions.
That is in part because Qualcomm has a technology leader in a variant of 5G networking called millimeter wave, which provides the fastest speeds available with the new networks. To date, all smartphones released in the United States - including Apple Inc's (AAPL.O) iPhone - have used Qualcomm chips to tap millimeter-wave networks.
Samsung told Reuters its new modem technology was capable of millimeter-wave networking, and Google said its new phones will support millimeter-wave networks as previous versions did, though neither company would comment directly on whether they are working together on the new Pixel.
Winning Google's Pixel business gives Samsung its first big chance to show off its chipmaking skills to the wider phone industry, which has long been wary of buying a key component from a fierce rival, said Kevin Krewell, principal analyst at TIRIAS Research. The Korean firm has never before sold its 5G modem chip technology to an outside company.
Qualcomm in a statement said it retained its technology lead because its millimeter wave technology relied on other chips in addition to the modem. "A modem is not enough to support millimeter-wave in phones," Qualcomm said.