Broadcom lands $15 billion deal with Apple to sell it iPhone components

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Broadcom has multiple chip deals with Apple. Two new ones increase its partnership value to $15 billion.
Photo: Brad Gibson/Cult of Mac

Chipmaker Broadcom has inked two multi-year deals with Apple to sell it some $15 billion in wireless components for its iPhone product line, the company announced in an SEC filing on Thursday.

The announcement did not specify which components Broadcom would provide to the iPhone maker. The deals apply to “Apple products launched during the three and a half year period beginning in January 2020,” the chipmaker said.

Broadcom explained in the filing that both of these new agreements are in addition to an existing one it has with Apple, which was reached in June of last year.

Broadcom supplied several chips used in the iPhone 11, including electronics for Bluetooth, Wi-Fi, and an RF front-end chip that helps the phone connect to wireless networks.

Apple accounted for roughly 20% of Broadcom’s net revenue in 2019, and about 25% of profit in fiscal 2018, according to the company’s December filing. Broadcom is one of Apple’s key American component suppliers, according to an SEC filing last year.

Moor Insights analyst Patrick Moorhead commented Thursday that it’s possible the two new contracts might only be for 4G parts.

On the other hand, Broadcom is a leader in developing 5G-ready components for mobile phones. With Apple reportedly planning on releasing multiple 5G-compatible iPhones in 2020, Broadcom’s public admission of two additional component deals with Apple give more strong evidence of Apple’s future plans in the mobile space.

In December of 2019, The Wall Street Journal reported rumors that Apple was in talks to acquire the radio-frequency chip division of Broadcom. The Journal also reported Broadcom was working with Credit Suisse Group AG to find a buyer for its radio-frequency business, according to various sources. Apple refused to comment on the report at the time.