Apple and Qualcomm's bitter 5G marriage will continue for another year at least
Apple and Qualcomm are seemingly stuck with one another for at least one more year, as Qualcomm revealed it's expected to provide the vast majority of 5G modems well until the end of next year, when the iPhone 15-series is expected to arrive with tons of changes, chief among being the long overdue transition to USB-C.
The bombshell news was revealed in Qualcomm's quarterly earnings call, which reveals that the chip maker will be responsible for the majority of the iPhone 15's 5G modems until the end of 2023, while previously just a 20% supply was anticipated. In particular, the chip maker "expects to retain its current foothold, according to comments that accompanied its earnings report Wednesday. The statement confirmed that Apple won’t be moving to its own in-house modem design for next year’s models."
This means that Apple is still very likely experiencing big hurdles (read: overheating issues) with its in-house 5G modem. As a refresher, Cupertino was expected to have its own 5G modem ready in time for the iPhone 14-series, but didn't turn out to be true, as a Qualcomm chip was used instead. Well, it seems that Apple's modem wouldn't be ready in time for the iPhone 15 either, which would continue the bitter marriage between the two companies for yet another year.
Currently, it's widely anticipated that Apple could finally be ready with its own custom 5G silicon by 2024... unless another force of nature doesn't compel Apple to continue using Qualcomm's 5G chips going forward. And yet, even though Qualcomm will have big business to do with Apple in the following years, the US-based chip maker "continues to assume it will only receive minimal revenue contributions from Apple in fiscal 2025." Apple has been doing quite well with its own custom Bionic mobile chips, thus relying less and less on Qualcomm. Cellular modems, especially 5G ones, still have to fallback to Qualcomm's supply, much to the chagrin of Apple.
What would Apple gain from using its own 5G modem in its iPhones? Given the very strong correlation between the software and hardware optimization in the company's products, we can certainly expect performance and efficiency gains from having yet another important component of the device be fully under Apple's control. This would ensure all components work better in tandem; not that there's currently anything inherently wrong with the current crop of iPhones using Qualcomm chips, but Apple surely stands to gain more by using its own tailor-made chips.
What's more, Apple's profit margins might also increase as it will no longer have to purchase Qualcomm's stock, and while the gain might not be that big, every little bit helps improving the bottom-line of the trillion-dollar tech giant. Interestingly, Apple is currently valued more than Alphabet, Amazon, and Meta combined.
As a refresher, Apple is expected to announce the iPhone 15-series in September 2023. The lineup will reportedly consist of a regular iPhone 15, an iPhone 15 Plus, an iPhone 15 Pro, and a new iPhone 15 Ultra, which will be succeeding the iPhone Pro Max in all things but name and would probably come with a trove of new features in tow. A common change on all upcoming iPhones will be the somewhat forceful adoption of USB-C, which is required by EU law on all phones that will be sold in Europe from 2024 onwards.
The iPhone 15 Pro and iPhone 15 Ultra will retain the 48MP main camera system with hopefully more optimizations and improvements, and the iPhone 15 and iPhone 15 Plus will likely score a Dynamic Island redesign akin to the iPhone 14 Pro and iPhone 14 Pro Max earlier this year.
As we know more, so will you.
