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Apple’s project to make its own 5G modem may not go as planned, and Qualcomm is now considered the sole modem supplier for the iPhone 15 launch in 2023.
Apple has been working on making its own modem for use in its hardware for several years now, in order to gain more control over the component’s operation and reduce costs. While progress has been made, the results are said to be insufficient for a “iPhone 15” mode launch.
In tweet on Tuesday, TF Securities analyst Ming-Chi Kuo said a supply chain survey indicates development of Apple’s 5G modem “may have failed,” leaving Qualcomm the “exclusive supplier for 5G chips of 2H23 new iPhones.” .
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[Company Update] Qualcomm (QCOM.O)My latest research indicates that development of Apple’s own iPhone 5G modem chips may have failed, so Qualcomm remains the exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. the company’s previous estimate of 20 %).
— (Ming-Chi Kuo) (@mingchikuo) June 28, 2022
While previous estimates from the company itself had Qualcomm supplying about 20% of modems for the 2023 models, Qualcomm has a “100% share of the supply” according to the new estimate.
Kuo still believes Apple will continue to develop its 5G modem chips, but doesn’t think it will have a huge impact on Qualcomm’s future earnings. By the time Apple succeeds and can replace Qualcomm, Qualcomm’s other new businesses should have grown enough to significantly offset the negative impact of the loss of iPhone 5G chip orders.
Apple’s acquisition of Intel’s smartphone modem business, as well as the onboarding of some 2,200 technicians in 2019, was a high cost to the company, with significant potential gains. If Kuo’s tweet is true, Apple has a while to wait before it reaps the benefits.