(Source: www.forbes.com)

Apple is very secretive about who its suppliers are. But an ABI Research teardown of the Apple Watch Series 3 found some surprises inside. In a report out early Wednesday, the research firm says that Apple went with chips from its frenemy Qualcomm despite an ongoing legal dispute that threatens to unravel their partnership.

In a move sure to shock many Apple watchers, the tech giant is using a Qualcomm modem in Apple Watch 3, which debuted last month, and there are no Intel chips inside, ABI Research said. Rumor had it as recently as last month that chip giant Intel would be in all the major chip sockets in the Watch 3.

The surprise move comes as an Apple lawsuit vs. Qualcomm and a Qualcomm countersuit work their way through courts.

Apple earlier this year filed a $1 billion suit vs. Qualcomm, saying the San Diego-based chipmaker charged royalties for technologies it had not developed. In a Seeking Alpha transcription of an earnings call in January, Apple CEO Tim Cook is quoted as saying, “so we were in a situation where the more we innovated with unique features … the more money Qualcomm would collect for no reason and the more expensive it would be therefore for us to innovate.”

Last month, U.S. federal judge Gonzalo Curiel in San Diego ruled that Apple’s suit vs. Qualcomm was valid and could move forward. Qualcomm has countered with a suit alleging that Apple infringed six of its key patents.

Regarding Apple Watch Series 3, “We thought it was going to be all Intel,” said Jim Mielke, ABI Research Vice President for Engineering, in an interview.

Apple went with Qualcomm even though it didn’t have to. Qualcomm created the CDMA communications technology used in many devices, but the Watch Series 3 doesn’t include CDMA so Apple could have used Intel. Mielke said one reason Apple went with Qualcomm is that its chip enables Apple’s Watch 3 to be tightly integrated, a huge plus in a device the size of a watch.

“Apple Watch 3 is by far the densest packed and most compact,” smart watch available, Mielke said. “The new version has twice the density of the Apple Watch 2, introduced just last year. It’s amazing what they’ve packed in there.”

Apple, which is increasingly using chips of its own design, runs proprietary watchOS4 basic software on its S3 dual core processor, which acts as the main processor for Watch Series 3. Apple also designed a custom wireless chip it calls W2 that it says makes WiFi 85% faster and Bluetooth and WiFi 50% more power efficient.

More Info: www.forbes.com

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