Apple apparently can’t seem to break free from mobile specialist Qualcomm. The iPhone maker has apparently extended a massive supply deal for 5G modems for at least three more years. The new agreement covers Snapdragon series 5G chips and includes “smartphone sales launches” in 2024, 2025, and 2026, as announced by Qualcomm on Monday.
The announcement of the supply agreement comes a day before the announcement of the iPhone 15. Speculation had been circulating that it could be the last iPhone series with Qualcomm modems. The previous supply deal between the companies for 5G chips was set to expire at the end of 2023. According to analysts’ estimates, Apple accounts for about a quarter of Qualcomm’s revenue.
The extension of the supply agreement suggests that Apple is progressing slower than expected in the development of its own mobile basebands. In 2020, Apple’s chip chief confirmed at an internal event that the company was working on this further smartphone core component. It was described as a “crucial strategic transition” that would lay the foundation for further innovation. Since then, there have been speculations almost every year about an iPhone with an Apple modem. It is now more likely that Apple could first test its in-house development in a less important model series, such as the iPad, Apple Watch, or a new entry-level iPhone, before it is integrated into flagship models that generate a significant portion of revenue.
In 2019, Apple acquired Intel’s modem business for $1 billion, including around 2,200 employees and numerous patents. Prior to that, Apple and Qualcomm had engaged in a years-long, ugly patent dispute, which was suddenly settled in the spring of 2019. The companies also have a patent licensing agreement that runs until at least 2025.
