Qualcomm and Apple extend modem supply deal through 2026
Qualcomm and Apple announced a renewal of the modem supply agreement.
The original agreement, which was signed in 2019 and set to expire this year, is extended through 2026 with Qualcomm supplying 5G modems to Apple.
Qualcomm states that it is likely to only provide 20% of the modems for the 2026 iPhone lineup, which suggests the estimated launch time frame of Apple's own 5G modem. Analyst Ming-Chi Kuo shared last week that he expects Apple's 5G modem for the iPhone to arrive in 2025. It is unclear whether Kuo's projection remains valid, but it is an indication that there would be likely delays to Apple's 5G modem development efforts.
Apple has been working for a few years on the 5G modem chip to reduce its reliance on Qualcomm. Reuters reported in 2019 that Apple moved the modem chip engineering team into the in-house hardware technology group, which was a sign that the radio modem design was given a higher priority within the company.
Due to the complexity of 5G modems, The Information estimated that it could take at least five years for Apple to deploy them. At the end of 2019, Apple acquired Intel's smartphone modem business for US$1 billion to boost its efforts.
Development of the 5G radio modem reportedly started in 2020 and was described by senior vice president Johny Srouji as "another key strategic transition". Apple currently pays royalties and cellular licensing fees to Qualcomm, which USB estimated to have contributed to 21% of Qualcomm's fiscal 2022 revenue. If and when Apple launches its own 5G modems, it would not be at the mercy of Qualcomm and provide some significant savings for the company.
Source: CNBC
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