Apple is reportedly making an all-in-one cellular, Wi-Fi, and Bluetooth chip - The Verge
Qualcomm: Supply Agreement With Apple Doesn’t Alter Our Long-Term Valuation | Morningstar
Apple's Acquisition of Intel's Smartphone Modem Business Completed, Intel Admits 'Multi-Billion Dollar Loss' - MacRumors
How will Apple’s move to develop its own modems impact Qualcomm’s market position in the long term?
Apple’s move to develop its own modems will have a significant impact on Qualcomm’s market position in the long term. By becoming independent in producing smartphone components, Apple can reduce its reliance on external suppliers like Qualcomm. This could potentially lead to a decrease in Qualcomm’s market share and influence in the modem industry. As Apple’s in-house modems improve and gain traction in the market, more smartphone manufacturers may also consider using Apple’s modems, further impacting Qualcomm’s market position.
What challenges might Apple face in developing its own modems and chips?
Developing its own modems and chips presents several challenges for Apple. Firstly, Apple needs to invest heavily in research and development to create high-performance modems that can compete with established players like Qualcomm. This involves hiring top talent, acquiring specialized technology, and conducting extensive testing to ensure reliability and compatibility with Apple’s devices. Secondly, Apple will need to overcome the learning curve associated with modem development, as it is a complex and technically demanding process. Lastly, Apple will also face challenges in terms of intellectual property and patent licensing, as Qualcomm holds a significant number of patents in the modem technology domain.
What other implications could Apple’s efforts to become more independent in producing smartphone components have on the industry?
Apple’s efforts to become more independent in producing smartphone components could have several implications on the industry. Firstly, it could lead to increased competition and innovation in the modem market. Apple’s entry into the modems space will encourage other companies to invest in modem development to keep up with the competition. This could result in faster advancements in modem technology, leading to improved connectivity and better overall user experience. Secondly, Apple’s self-reliance in producing components could disrupt the supply chain dynamics in the smartphone industry. Other manufacturers may also consider reducing their dependence on external suppliers, leading to a more fragmented supply chain landscape. Lastly, Apple’s move towards in-house production may prompt other smartphone manufacturers to follow suit, potentially reducing their reliance on external component suppliers. This could have significant implications for companies like Qualcomm, as they may lose some of their major customers in the long run.
Full summary
The news of this partnership extension has had a significant impact on the market, with Qualcomm's shares jumping as much as 8 percent following the announcement. This demonstrates the market's confidence in the collaboration between Qualcomm and Apple.
Apple's move to in-house 5G modem chips has been a topic of speculation. The extra sources reveal that Apple is indeed working on developing its own modems to replace Qualcomm's. However, Cristiano Amon, CEO of Qualcomm, is aware of Apple's decision and has indicated that Qualcomm will not be providing Apple with a modem in 2024.
The timeline for Apple's transition to in-house modems is still uncertain. While there were speculations that Apple would use in-house parts as early as this year, Qualcomm previously stated that it did not expect to provide modems for the iPhone in 2023. Ultimately, Apple decided to continue using Qualcomm's modems for another year.
It is also unclear if Apple will pay Qualcomm QTL licenses for its own modems. This will be an important aspect to consider as Apple strives to become more independent in producing its smartphone components.
Apple is not just focused on developing in-house modems. The company is also working on a new chip for cellular, Wi-Fi, and Bluetooth functionality. Apple plans to begin using this chip in its devices starting in 2025. Additionally, Apple aims to replace the Wi-Fi and Bluetooth chip currently sourced from Broadcom with its own custom chip.
Despite Apple's efforts to develop its own modems, Qualcomm remains confident in its position as the primary 5G modem supplier for future iPhones. Qualcomm expects to have the majority of 5G modems for the 2023 iPhones, and Apple will gradually transition to using its own modems by the end of 2024 or early 2025.
The partnership extension between Qualcomm and Apple for 5G modems in future iPhones is a significant development in the smartphone industry. Apple's efforts to develop its own modems and chips reflect its commitment to innovation and reducing reliance on external suppliers. Qualcomm, as the primary 5G modem supplier, stands to benefit from this collaboration in the short term. However, the long-term impact on Qualcomm's market position remains to be seen as Apple continues to invest in developing its own components.
