Apple's ambitious project to create its own modem chip for its latest iPhone models has hit a wall, despite years of effort and billions of dollars invested, reports the Wall Street Journal. The company spent $1 billion to acquire Intel's smartphone modem unit in 2019 to save an estimated $7.2 billion that Apple typically spends on Qualcomm's modems, according to WSJ.
The Apple modem project, which kicked off in 2018, aimed to reduce the company's dependency on Qualcomm. However, technical challenges, poor management, and underestimation of the task's complexity have led to the project's failure, according to sources of WSJ. As a result, Apple had to continue its partnership with Qualcomm.
The endeavor reportedly began with Tim Cook's directive to design a modem logic chip, claims WSJ. The initiative led to hiring of thousands of engineers and was internally known as Project Sinope. However, the chip developed by Apple faced multiple issues, including slow performance and a tendency to overheat. The circuit board was also too large, occupying half the internal space of an iPhone, rendering it impractical for use, according to WSJ.
According to the report management issues further plagued the project. Teams were scattered across different locations in the U.S. and internationally, operating without a unified leadership. Internal communication was poor, and some managers even discouraged engineers from sharing negative updates, leading to unrealistic targets and missed deadlines. This lack of effective management contributed to the project's failure, based on the WSJ report.
Apple had initially underestimated the complexity of designing a modem chip compared to general-purpose processors and system-on-chips. Modem chips have to adhere to strict global connectivity standards and manage to adapt the phone's front end module (FEM) to existing conditions.
Financially, the failure of the in-house chip has been a blow to Apple and its investors, WSJ claims. The latter had hoped that developing the chip internally would save costs. Instead, Apple ended up paying more than $7.2 billion to Qualcomm in the previous year for its chips, the report says. The company also recently renewed its agreement with Qualcomm to purchase their modem chips until 2026.
Despite these setbacks, Apple is not expected to abandon its modem chip project. Insiders suggest that the company could produce a comparable chip by late 2025, although further delays are possible.
