- Qualcomm said Monday that it will supply Apple with 5G smartphone modems through 2026.
- Wall Street analysts and Qualcomm officials had previously said they expect Apple to use an internally developed 5G modem starting in 2024.
This photo taken on August 14, 2023 shows iPhones at an Apple Store in Hangzhou, eastern China’s Zhejiang province. On the same day, data from TechInsights showed that Apple’s iPhone sales in China surpassed the United States for the first time in the second quarter of 2023, becoming the largest single market for iPhone shipments.
Coast Photo | norphoto | Getty Images
Qualcomm said Monday that it will supply Apple with 5G smartphone modems through 2026.
Wall Street analysts and Qualcomm officials had previously said they expect Apple to use an internally developed 5G modem starting in 2024.
Apple’s continued sales will boost Qualcomm’s phone business, which posted $5.26 billion in sales in the quarter ended June, and could cushion the blow of potentially losing an important customer. About 21% of Qualcomm’s fiscal 2022 revenue of $44.2 billion came from Apple, according to UBS estimates.
Qualcomm currently supplies Apple with 5G modems for its iPhones, but Apple is building its own modems to move away from Qualcomm’s chips. He. She Sold Intel’s smartphone modem division in 2019 built its own modem. However, analysts noted that it would be difficult for Apple to move away from Qualcomm chips due to their complexity.
Qualcomm also makes money from Apple through cellular licensing fees, which amounted to about $1.9 billion in 2022, according to UBS estimates.
She added that Qualcomm continues to collect royalties from Apple under a six-year agreement. This agreement was reached at the end of a legal battle between Apple and Qualcomm over royalties that was settled in 2019.
Qualcomm says it expects to supply only 20% of the modems needed for Apple’s smartphone launch in 2026, suggesting it likely still expects Apple’s business to eventually decline. A Qualcomm official said the company has not updated its guidance to take into account Apple’s sales.
Apple is expected to announce new iPhones, likely called the iPhone 15, on Tuesday, which will use Qualcomm modems.
CNBC has reached out to Apple for comment and will update this story accordingly.
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