Apple To Buy 5G Chips From Qualcomm Until 2026 Under a New Deal

Emily Lawson — Tue, 12 Sep 2023 12:55:54 +0000

Qualcomm on Monday (11 September) announced a new deal with big tech Apple to supply Snapdragon 5G Modem‑RF Systems until 2026. This is a golden opportunity for Qualcomm as Apple is facing increasing challenges in China and will want to reinforce its supply chain elsewhere.

This agreement is worth billions of dollars for Qualcomm at least for the next three years. It mildly indicates that the iPhone maker is not rushing out its own modem. However, Apple moved all the computers to the M3 processing chips of their own design.

Rising Stock Prices Amid the Renewed Partnership

Qualcomm investors had a soaring start to the week as the stock prices were up as much as 9.29% in the pre-market session on Monday. By late morning, the stock had given up some of its gains and was still 3% high, and in the early afternoon, the shares were up 4%.

On the other hand, Apple’s stock price fell 6% in the last week. With the Qualcomm deal, the stock price was up 0.4%. It will be noteworthy to see the jump in Apple’s stock in the midst of its new iPhone launch and China banning the iPhone in the workplace.

Susannah Streeter, head of money and markets at Hargreaves Lansdown said, “At a time when Apple is running into increasing challenges in China, reinforcing its supply chains elsewhere is a priority, and it appears the company is rolling back or at least delaying plans to go at it alone in more areas with its chip production.”

The 2019 Chip Supply Deal

San Diego-based Qualcomm signed a chip supply deal previously in 2019 with Apple, after the settlement of a protracted legal clash between the two companies. This heated legal battle was over the patent which then forced the tech giant to settle outside of the court.

The basis of the suit was Apple bought modem chips from Qualcomm for the iPhones. However, these chips had patented technology and the chipmaker charged Apple for the chips and a separate license fee for the use of patented technology. Apple opposed it and called it ‘double dipping’. Qualcomm accused Apple of blackmailing and refused to sell the chips. Both the companies decided to fight it all the way and it started a multi-billion-dollar trial which on day one unexpectedly ended when both companies reached an out-of-court settlement.

Final Words

The patent licensing deal Qualcomm signed with Apple in 2019 will remain in place. This deal will expire in 2025 and the companies have the option to extend it for another two years.

Qualcomm said on Monday that its financial projections presume that only a fifth of the iPhones will have its chips by 2026. It is notable that Qualcomm made a similar projection in 2021 about its business with Apple which turned out overly conservative as the iPhone 14 models released last year all had Qualcomm modems.

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Apple’s Efforts to Become a Futuristic Tech Gadget Failed! Read How.

Anwesha Mishra — Wed, 29 Jun 2022 14:29:11 +0000

In one of the most surprising pieces of news, Apple hits a roadblock on its way to becoming a popular futuristic tech gadget. The company’s plan to replace Qualcomm 5G modems with its own upcoming iPhone models became a major hit. Here is everything you need to know about Apple’s failed plan.

Apple’s Failed Endeavours

As Apple analyst Ming-Chi Kuo writes, Apple’s efforts to develop its own 5G modem chip have not yielded an adequate replacement. He says that Apple’s efforts thus far “have failed”. His latest supply-side surveys indicated that Apple was unable to develop a custom 5G modem of its own in time for the 2023 iPhone series (iPhone 15).

Due to the rumoured delays in development, Kuo believes that Apple will resort to using Qualcomm modems for the 2023 iPhones again. Previously, Qualcomm executives had warned investors that it expected to lose up to 80% of the Apple business by 2023, as Apple planned to use its chip instead.

History of the Apple-Qualcomm Association

Apple and Qualcomm have long been partners, but the relationship has also been bittersweet. A few years ago, Apple and Qualcomm engaged in fierce litigation across multiple jurisdictions. Ultimately, the lawsuit either created or accelerated Apple’s desire to kick Qualcomm to the curb. During the litigation, Apple argued that Qualcomm was profiting from Apple innovations that had nothing to do with modem chips. Moreover, it sued Qualcomm for $1 billion in the US. The companies faced off in courts around the world over Qualcomm’s licensing fees and how it sold its chips.

Later in 2019, the companies signed a settlement that included a six-year patent licensing agreement and an arrangement to use Qualcomm parts. The chipset agreement indicated that Qualcomm would supply some but not all 5G modems for iPhones to Apple through 2024, according to a statement of work released as part of court documents.

Although Apple ultimately settled its lawsuit with Qualcomm in 2019, by then, work on an Apple-designed 5G modem was already underway. However, as a part of the deal, Apple acquired all of Intel’s IP and modem technology equipment.

Apple’s acquisition only solidified its 5G plans and its underlying desire to remove Qualcomm as a supplier. It stands to reason that an iPhone with an Apple-designed 5G modem is an issue of when as opposed to it.

Can Apple Ever Manufacture a Futuristic Tech Gadget?

In recent years, various rumours had pointed to Apple using their own 5G modems on all iPhone models, starting with the iPhone 15 in 2023. That is seemingly not the case anymore. Apple has long preferred to own the underlying technologies used in its products. However, these days, the entirety of Apple’s hardware lineup utilizes processors featuring Apple designs.

Moreover, shortly after Kuo’s tweet, Qualcomm shares climbed more than 3%. An Apple representative declined to comment. Apple has thousands of people working on the initiative and has a strong track record. Thus, while a 5G iPhone with an Apple-designed modem may not be coming on the iPhone 15, others suggested that it might be ready to ship in time for the 2025 iPhone release.

Anwesha Mishra

Anwesha has been a creative writer for a while. Currently, on her pursuit of tech writing, she is diving into the realms of technology to produce better content on the forever-changing world of technology. In her free time, you’ll find her humming tunes of her favourite shows or reading a book.

The post Apple’s Efforts to Become a Futuristic Tech Gadget Failed! Read How. appeared first on Tech Research Online.

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