Analyst Ming-Chi Kuo reports that Apple’s efforts to develop a 5G modem chip have failed, which means it has to rely heavily on suppliers for the iPhone 15 generation in 2023.
That’s bad news for the iPhone maker, but good news for Qualcomm, which is set to get the full contract.
Over the past several years, Apple has made efforts to develop a 5G modem chip in order to have more control over how components work and reduce costs, while not having to rely on Qualcomm as a supplier.
“The latest supply chain survey suggests that chip development may have failed,” Koe said. This means Qualcomm will remain the exclusive supplier of 5G chips for iPhone models for 2023.
Kuo previously thought Apple’s 2023 iPhones might use in-house designed modem chips instead of Qualcomm chips.
Qualcomm is now expected to supply 100% of the chips for 2023 iPhone models, instead of 20%.
Kuo expects Apple to continue developing 5G chips. But it may take more time for the work to be completed and satisfactory to use in iPhone and other devices.
Apple has to rely on Qualcomm
It’s not clear why Apple couldn’t have modem chips ready in time for the iPhone launch in 2023. But the company has been aiming to move away from Qualcomm for years.
Apple fought a protracted legal battle with Qualcomm and planned to use Intel’s 5G chips in its 2020 iPhones. But this was not possible because Intel was not able to manufacture 5G chips that meet Apple’s standards.
Apple ended up settling its lawsuit with Qualcomm in 2019. It has since used Qualcomm’s 5G modems in its iPhone and iPad ranges.
The company has since been working on developing its modem chip, and it also bought the modem chip business from Intel, as well as recruiting about 2,200 engineers in 2019. Rumors say it was on track to launch in 2023.
Qualcomm said last year that it expects to supply 20% of the modem chips used in iPhones in 2023. But it looks like it may now produce chips for at least two more generations of iPhones.
Kuo believes that Apple continues to develop 5G modem chips. But it is not believed that it may affect future revenue of Qualcomm.
“By the time Apple succeeds and can dispense with Qualcomm, Qualcomm’s other new business should have grown enough to offset the negative impact of losing 5G chip demand for the iPhone significantly,” he said.