Apple has renewed its contract with Qualcomm to get modem supplies for three more years. Originally, the modem agreement between the two parties was valid only up to 2023. Qualcomm has now reported that Apple has extended the contract till 2026.
Apple has been trying to develop its own in-house modem for almost three years now. It was being speculated that the iPhone SE 4th gen could be the first device to feature Apple’s self-developed modem and launch as early as 2025. However, it looks like Apple is still facing challenges with its modem production, and will continue to rely on Qualcomm.
Qualcomm Will Supply Modems To Apple Up To 2026
Apple’s plans of developing an in-house modem date back to 2019, went he company had acquired Intel’s Modem division. In a multi-billion dollar with Intel, Apple purchased a majority 51% stake in Intel’s modem business, along with exclusive ownership of all patents and intellectual properties.
Apple Analyst Ming-Chi Kuo had previously reported that Apple could soon start using its in-house modems in 2025. He added that the iPhone SE 4th generation is expected to be the first Apple device to feature the new modem, with a launch in Q1 2025. However, as per the latest announcement by Qualcomm, it looks like Apple is not switching to its own modems anytime soon.
Since the iPhone 12, Qualcomm has been the only supplier of 5G-enabled modems to Apple. In fact, Apple is Qualcomm’s largest customer as it accounts for 22.3% of the orders of Qualcomm’s chip business, as per Bloomberg.
Apple has been thriving to develop each component inside its own foundries, and reducing its dependence on third-party suppliers. However, the modem is a crucial component of the iPhone as it affects multiple factors of the iPhone’s performance such as network reception, spectrum compatibility, and most importantly battery life.
Qualcomm is the most experienced player in the modem business and enjoys a monopoly in this segment. The company has access to the most advanced modem technologies, making it sensible for manufacturers like Apple and Samsung to source modems from Qualcomm, rather than developing themselves.
Apple’s Trillion Dollar Plan To Become Self Sufficient
Right from 2010, Apple’s long-term vision has been to develop every single component inside its devices on its own. Apple was one of the first phone manufacturers to start developing in-house phone processors with the introduction of the Apple A4 chip in April 2010.
Apple has proven its capability to make its own chips and made a huge statement when the company launched the M1-silicon chip for MacBooks in 2020. Apple completely eliminated its reliance on Intel’s desktop processors, and the M-Series desktop chips have now proven to be one of the most powerful processors for computers.
Apple has also been planning to develop its own displays. As of now, Apple sources its display panels from Samsung, LG, BOE, and Sharp. However, it is being reported that Apple may introduce its own micro LED display in 2024.
Apple is currently valued at $2.8 trillion and has access to a massive cash treasury and resources with the business they have built over the years. The company has been heavily investing in R&D to develop parts on its own, and this strategy has reaped good fruits for the company. Apple is expected to continue following this path and become fully sufficient as early as 2030.
