Apple and Qualcomm Extend the Status Quo on 5G Modems Supply
Is Apple facing technical challenges in 5G modem design, known as a hard nut to crack? Or are Qualcomm’s patent muscles making Apple’s job difficult?
- Qualcomm has extended its Snapdragon 5G Modem‑RF Systems agreement with Apple for its upcoming smartphones until 2026.
- Is Apple facing technical challenges in 5G modem design, known as a hard nut to crack? Or are Qualcomm’s patent muscles making Apple’s job difficult?
On Monday, Qualcomm disclosed it has extended its chip supply agreement with Apple until 2026. It would seem the next few generations of iPhones, particularly those launched in 2024, 2025 and 2026, would continue to rely on the Snapdragon 5G Modem‑RF Systems.
More importantly, the deal’s extension, set to expire this year, signals that Apple isn’t as far ahead as initially thought in developing internal 5G modem silicon, translating into a win for the American silicon major. Radio frequency analog and analog-to-digital designs certainly are a rugged mountain to climb.
Apple has been trying to develop modems in-house for at least five years since 2018, hoping to shed its reliance on external modem vendors for iPhone 15.
The terms of Qualcomm’s deal with Apple remain under wraps. However, the company noted that the global patent license agreement, initially signed in April 2019 with the Cupertino-based smartphone maker, “remains unchanged.”
Qualcomm expects to contribute 20% of the chipset supply share for Apple’s smartphones by 2026. Conversely, data from Bloomberg indicates that Apple is Qualcomm’s biggest customer, contributing as much as a quarter of the latter revenue.
Qualcomm has a few years to replace Apple as a critical customer, although even after Apple’s in-house 5G modem becomes ready for integration into iPhone 18 in 2026, the company won’t use it for previous-generation models and would likely roll it out gradually for newer ones.
The possibility of Apple launching its 5G modem for products other than the iPhone cannot be ruled out either.
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The benefits for Apple with an in-house 5G chip modem are two-fold: a. It can help its products with more power-efficient integration, b. It can save Apple a significant licensing fee. Apple’s resolve for internal chips began with lawsuits against Qualcomm, with the former accusing the latter of unreasonably high patent licensing charges.
While Qualcomm leveraged its position as the only leading American modem manufacturer, Apple has since sought to break the oligopoly by designing its own modems. To this end, Apple acquired Intel’s smartphone chip modem business for $1 billion in July 2019, three months after it settled all its lawsuits with Qualcomm in April 2019.
As part of the deal, Apple got 17,000 wireless technology patents, including protocols for cellular standards, modem architecture, modem operation, and more. Whether or not any of those can be used without infringing on Qualcomm’s lucrative RF patents is a question Apple engineers can answer. Or Intel’s.
The other question is whether none of those come under the purview of FRAND licensing. Furthermore, don’t Samsung or MediaTek qualify for Apple to replace Qualcomm? Possibly not, given that Samsung doesn’t leverage its in-house 5G modem for its premium smartphones.
Huawei is also a major global telecommunications player. However, it is in the U.S. Department of Commerce’s Bureau of Industry and Security’s (BIS) Entity List and is banned from trade in the country.
In May of that year, Judge Lucy Koh ordered Qualcomm to part ways with monopolistic practices. “Qualcomm’s licensing practices have strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process,” she said.
Besides 5G modems, Apple also designs its own system on a chip (SoC) for iPhones, Macs, iPads, and more. The company’s Wonderlust event, which will introduce the iPhone 15, will be livestreamed today from Apple Park in Cupertino, CA, at 10 AM PT.
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