Apple has relied heavily on Qualcomm for their 5G modem chips in recent years, with the technology giant using Qualcomm’s chips in all of their 5G iPhones. However, that looks set to change as Apple has reportedly started developing its own 5G modem chips for future iPhones.
The news was confirmed by Cristiano Amon, CEO of Qualcomm, during an interview with CNBC at the MWC (Mobile World Congress) in Barcelona. Amon stated that Apple’s move towards developing its 5G modem chips is a significant step for the company and marks a change in strategy for the technology giant.
This development means Apple is finally getting the wireless connectivity independence they have long sought. In addition, building its own 5G modem chips will allow Apple more control over its devices’ development and manufacturing while reducing its reliance on third-party suppliers like Qualcomm.
Apple has been known for its innovation and ingenuity for years, and this move towards building its own 5G modem chips is no exception. This decision will undoubtedly significantly impact the smartphone industry, with Apple potentially setting a new standard for other manufacturers.
Apple Acquired Intel’s 5G Modem Business For This Purpose
Apple’s move towards developing its 5G chips was made possible by acquiring Intel’s modem business in 2019. At the time, Intel struggled to keep up with the development of 5G technology, and selling their modem business to Apple was seen as a strategic move to cut their losses.
Apple’s purchase of Intel’s modem business for $1 billion provided them with the necessary resources and infrastructure to develop their chips. In addition, it gave them access to a wealth of intellectual property and expertise in wireless technology. Intel is well known in the chip industry, so Apple saw an opportunity to get the best from its future chips.
By bringing the development of their modem chips in-house, Apple gained greater control over the development process, allowing them to design chips specifically tailored to their devices. This level of control can improve their devices’ overall performance and efficiency, giving them a competitive edge in the market.
Moreover, acquiring Intel’s modem business will allow Apple to reduce its reliance on third-party suppliers, reducing the risk of supply chain disruptions arising from geopolitical tensions and improving its overall supply chain management. It has also given them greater flexibility in chip design, enabling them to experiment with new technologies and bring more innovation to their devices.
A Push for Innovation
During the interview, the CEO did not provide clear details about the license terms between Qualcomm and Apple concerning the 5G modem chips. This lack of clarity raises questions about what would happen if Apple moved away from Qualcomm in the future and whether Qualcomm would cover the costs involved.
It is worth noting that Qualcomm has been exploring new avenues to diversify its portfolio beyond smartphones. They have been focusing on developing automotive semiconductors and ultra-low-power applications, among other things. These efforts suggest that Qualcomm seeks to expand beyond its traditional markets and explore new growth opportunities.
However, Qualcomm has also faced legal challenges recently, such as the lawsuit brought against them by a British firm. Despite this, the CEO of Qualcomm remains confident in the company’s ability to break through in its new endeavors and continue to drive innovation in the semiconductor industry.