Apple and Qualcomm Extend 5G Modem Supply Agreement Till 2026

(Image credit: Qualcomm)

Qualcomm on Monday said that it had renewed its partnership with Apple and will supply the consumer electronics giant with Snapdragon 5G Modem-RF Systems for its smartphones in till 2026. This move highlights Apple's ongoing reliance on Qualcomm, despite its ambitions to develop its own modem. 

Apple's aspiration to create its own modems and reduce its dependence on Qualcomm is well-known. The company acquired Intel's struggling modem business for $1 billion in 2019 and got everything it needed to develop its own modems for smartphones, tablets, and other electronics, including IP and product teams. However, this extended agreement indicates that Apple's independent modem development has not come to fruition.

Developing and building its own modems would allow Apple to sidestep the costs and royalties tied to Qualcomm's components, which would increase the company's profitability. While the new agreement is not exclusive and Apple can still use its own (or non-Qualcomm) modems in its products, it suggests Apple is ensuring that it has a backup plan.  

Meanwhile, Apple is a major Qualcomm customer.  In fiscal 2022, revenues from Apple and Samsung each comprised 10% or more of Qualcomm's consolidated revenues. Since Apple has in-house modem development, Qualcomm expects its reliance on its modems to diminish over time, but it looks like this is not going to happen anytime soon.

The timing of this announcement is noteworthy as it comes just before Apple's annual iPhone event where the company plans to introduce its new iPhone 15. Since we can be assured that this line-up of smartphones is not set to use Apple's in-house developed modem, we would expect it to use Qualcomm's 5G modem and RF front end.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.