Apple has extended its modem deal with Qualcomm for almost two years until March 2027. The three-year contract was supposed to expire in 2025.
Apple’s extension of its modem deal with Qualcomm comes as the Cupertino giant struggles to develop its in-house modem.
Qualcomm will continue supplying 5G modem to Apple
In September 2023, Apple renewed its agreement with Qualcomm for using its 5G modem until 2025-26. This was a three-year extension of the original agreement that the two companies signed in 2019 after a long legal battle over patent licensing and infringement.
Qualcomm confirmed the latest extension during its Q1 2024 earnings call. As part of the deal, Apple will pay Qualcomm licensing fees for using its cellular patents, in addition to the money it will pay for the 5G modem chips.
Apple struggling with in-house 5G modem
Apple has been working for years to build an in-house 5G modem. But it has been struggling, with billions of dollars already invested and little to show.
“Why we thought we could take a failed project from Intel and somehow succeed is a mystery,” an Apple employee told Gurman in a November 2023 report. Apple wanted to boost its 5G development efforts by acquiring Intel’s 5G business in 2019. But that move backfired, as the company encountered issues with Intel’s code. And fixing or rewriting this code caused other features to break.
Given Apple’s struggle, its in-house modem will likely not be ready anytime soon. The company aimed to use the modem inside the 2025 iPhone SE refresh. However, the chances of that happening appear slim.
Qualcomm is the leader in the smartphone baseband market, with its Snapdragon offerings providing excellent coverage and download/upload speeds. Apple uses Qualcomm’s latest Snapdragon X70 modem across the entire iPhone 15 lineup, which enables up to 54% faster 5G speeds.