Apple And Broadcom Ink Multibillion-Dollar Agreement For Making 5G Components, Chipsets And More

Apple has inked a multibillion-dollar and multi-year agreement with San Jose, California-headquartered Broadcom, in a bid to develop 5G components, chipsets and other wireless connectivity parts.

The move marks the latest phase of a collaboration between the two companies.

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Apple has inked a multibillion-dollar and multi-year agreement with San Jose, California-headquartered Broadcom, in a bid to develop 5G components, chipsets and other wireless connectivity parts. According to the iPhone maker, its deal with Broadcom is part of its 2021 commitment to invest $430 billion in the US economy, says a report by CNBC.

“We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” Apple CEO Tim Cook was quoted as saying in a release by CNBC.

The move marks the latest phase of a collaboration between the two companies, as Broadcom announced it would sell $15 billion in wireless components to Apple in 2020.

As part of this agreement, Broadcom will develop 5G radio frequency components -- including FBAR filters -- and cutting-edge wireless connectivity components. The FBAR filters will be designed and built in several key US-based manufacturing and technology hubs, including Fort Collins, Colorado, where Broadcom has a major unit.

It should be noted that Cupertino, California-based Apple already makes Bluetooth and WiFi tech for its iPhones, in partnership with Broadcom.

Meanwhile, Apple, in its quarterly results reported revenue of $94.8 billion in the first quarter (Q1) of this year, which is down 3 per cent YoY, but the company posted a profit of $24 billion, beating analysts' expectations amid a slowing economy. Bumper iPhone sales contributed $51.3 billion to Apple's profits in this quarter.  

Apple iPhone sales increased 1.5 per cent to $51.33 billion. However, Mac sales declined more than 30 per cent to $7.17 billion.

According to Luca Maestri Chief Financial Officer, Apple's gross margin will be between 44 per cent and 44.5 per cent, above estimates of 43.7 per cent, according to Refinitiv data. But he also said Apple's revenue will likely decline slightly. Analysts were expecting a 2.1 per cent increase to $84.7 billion for the company's June-ending fiscal third quarter.