Apple has renewed its agreement with Qualcomm to use its 5G modems until 2026. The current deal would have expired at the end of 2023.
The three-year deal signals Apple’s in-house modem is still far from ready. Qualcomm itself was expecting Apple to switch to its modem in 2024.
iPhones to continue with 5G Qualcomm modem through 2026
Apple is a major vendor for Qualcomm. The company was previously expecting a major hit to its revenues once Apple switched away from its modem. Given the three-year extension to the current deal, Qualcomm should see a further boost in its revenues. The San Deigo chipmaker says the new agreement will cover Apple’s smartphone launches until 2026.
Qualcomm believes its revenues from Apple will eventually decline, as it expects to supply only 20% of the modem for the 2026 iPhone.
Until 2019, Apple was dual-sourcing iPhone modems from Qualcomm and Intel. But the latter’s 5G modem development was running behind schedule, forcing Apple to go with Qualcomm entirely. This move came after the two companies were involved in a fierce legal battle over patent licensing and infringement issues.
Apple’s 5G modem is still years away
Last week, TF Securities International analyst Ming-Chi Kuo claimed Apple’s custom 5G modem for iPhone will debut in 2025. With the three-year agreement, it appears Apple’s modem is more than a couple of years away from launch. The company may first use the modem on low-volume products like iPad and iPhone SE 4 before using them on its main iPhone lineup.
Apple’s 5G modem has long been in development. The company has reportedly invested billions of dollars into this effort. As the Cupertino giant likes to have complete control over the technology in its key products, it does not want to rely on Qualcomm modems in the future.