Apples iPhone Modems Contract with Qualcomm Extended till 2026 – Insider Wales Sport

Qualcomm Inc. has recently inked a three-year deal to supply modem chips for Apple Inc.’s iPhones, indicating that Apple’s efforts to develop its own chips are progressing slower than anticipated. The announcement had a positive impact on Qualcomm’s stock, with a 4% rise following the news.

As part of the agreement, Qualcomm will provide iPhones with SnapDragon 5G modem-RF systems in 2024, 2025, and 2026. This suggests that Apple’s plans to create its own connectivity chip sets, which began with the acquisition of Intel Corp.’s smartphone-modem business in 2019, have faced delays.

Qualcomm forecasts a 20% market share of modems in the 2026 iPhone models, indicating that Apple intends to start incorporating its own modems by then. The terms of the new deal are expected to resemble the previous three-year arrangement.

Analysts interpret this deal as a positive development for Qualcomm, as it highlights Apple’s struggles in developing the technology and affirms Qualcomm’s technological leadership. It also presents Qualcomm with a clearer path to drive earnings per share growth in the future.

Notably, Qualcomm CEO Cristiano Amon previously stated that the company did not plan to supply mobile chip sets to Apple in 2024. However, no updates regarding this assumption have been provided thus far.

Earlier predictions from analysts hinted at a substantial revenue loss for Qualcomm beginning next year, as its revenue from Apple dwindled. Over the past year, Qualcomm shares have experienced a decline of 19.6% due to the approaching end of this revenue source.

It is worth mentioning that Qualcomm and Apple ended a legal battle in 2019, resulting in Apple’s acquisition of Intel’s modem business. Apple aims to have its own 5G chip sets ready by 2024 or early 2025, further emphasizing its desire to reduce reliance on external suppliers.

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Overall, the new deal signals a continued partnership between Qualcomm and Apple, with implications for both companies’ future strategies and market standings.

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About the Author: Forrest Morton

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