Apple is close to achieving its goal of developing an in-house 5G modem, which would reduce its reliance on Qualcomm and save billions of dollars. The iPhone SE 4, set to launch next year, will be the first device to feature Apple’s custom baseband chip. However, the Cupertino giant still faces a hurdle as its licensing agreement with Qualcomm won’t end until March 2027.
Analysts warn that if Qualcomm were to cut off supply, it could deal a significant blow to Apple, forcing it to find an alternative supplier. Qualcomm currently makes a substantial amount of money from its partnership with Apple, estimated to be in the billions. However, removing Apple as a customer would also have financial implications for the chipmaker.
Patrick Moorhead, top-ranked technology analyst, shares his view on the situation. He notes that while the potential loss to Apple would be severe, it’s likely that Qualcomm will instead use this opportunity to monetize its partnership with the tech giant. A ‘Bill of Materials’ analysis of the iPhone 16 Pro Max reveals that Apple could have generated over $2.52 billion from 5G modem sales alone, making the deal a lucrative one for both parties.
Apple’s plan to develop in-house 5G modems is part of its long-term strategy to improve its devices and expand into new markets. The company aims to bring mmWave support to future iPhone models and explore cellular connectivity for Macs and other devices, including the Apple Vision Pro model.
Source: https://wccftech.com/qualcomm-could-cut-off-apple-from-its-5g-modem-supply-right-now