Apple is gearing up to launch its highly anticipated line of cellular modem chips next year, marking a significant step towards reducing its reliance on Qualcomm, according to a Bloomberg report. The tech giant aims to fully transition away from Qualcomm’s modem technology by 2027, as per insiders cited in the report. Qualcomm, a leader in modem chips that power mobile data connectivity, has already signalled to investors that Apple plans to phase out its use of Qualcomm components.
Currently, Qualcomm has a deal in place to supply modem chips to Apple until at least 2026. However, the chipmaker’s future revenue streams could take a hit as Apple phases in its in-house technology. Investors are closely watching Qualcomm’s efforts to diversify into new areas like laptops and AI-powered data centers, which might help offset potential losses from Apple’s shift.
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The Road For Apple Looks Like This
Apple’s new modems are expected to debut in the next iteration of the iPhone SE, the company’s budget-friendly smartphone, slated for release next year after its last update in 2022. Following this, Apple plans to roll out progressively advanced modem chips across its devices, the report adds. Neither Apple nor Qualcomm has commented on the matter as of now.
The development of Apple’s custom modem chips has been a long-term project. The company invested $1 billion in acquiring Intel’s modem unit in 2019 and moved its modem engineering team into the same division that designs its custom processors.
Additionally, Apple signed a multi-billion-dollar deal last year with Broadcom to develop 5G radio frequency components, which could impact other Apple suppliers like Skyworks Solutions and Qorvo.
This strategic move underscores Apple’s broader effort to gain more control over its supply chain while leveraging its resources to build in-house components tailored to its ecosystem.