Apple, Qualcomm Extend Modem Chip Deal to 2027

In a recent disclosure on February 1, Qualcomm announced during its Q1 earnings call in 2024 that Apple has officially extended its licensing agreement for Qualcomm's modem chips (basebands) until March 2027. This extension, spanning an additional two years, suggests that upcoming iterations of iPhones may continue to incorporate Qualcomm's 5G baseband technology rather than Apple's proprietary solution.

Apple has been actively engaged in developing its own 5G modem chips in a strategic move aimed at reducing reliance on Qualcomm, addressing signal-related challenges, and enhancing profit margins. Despite these objectives, Apple's research and development endeavors have encountered notable delays.

According to a November 2023 report from Bloomberg, Apple's progress in modem chip development has been postponed to late 2025 or potentially 2026, with the prospect of further delays. Apple's initial timeline aimed at introducing a self-designed modem chip before 2024 and incorporating it into the iPhone SE slated for a spring 2025 release. Presently, these objectives remain unrealized.

Insider information hints that the upcoming iPhone 16 Pro series, slated for release this year, will feature Qualcomm's Snapdragon X75 baseband chip. In contrast, the iPhone 16 and iPhone 16 Plus are anticipated to retain the Snapdragon X70 baseband chip from the iPhone 15 series.

Moreover, on February 1, Qualcomm, a prominent processor manufacturer, released its financial results for the first quarter of the 2024 fiscal year, reporting a revenue of $9.935 billion, reflecting a 5% year-over-year increase, and a net profit of $2.767 billion, marking a substantial 24% year-over-year growth.

Cristiano Amon, President and CEO of Qualcomm, outlined the company's future trajectory, emphasizing the utilization of its leading Snapdragon platform and technological differentiators in artificial intelligence across mobile, automotive, PC, XR, and industrial IoT sectors to fortify its competitive standing.