Apple has extended its current manufacturing deal with Qualcomm and will continue using its 5G modems in iPhones. While it was originally stated that Apple would only aim to extend the contract until 2026, it has now been revealed that the contract has been extended into 2027.
Qualcomm CEO Cristiano Amon confirmed the news during the company's first fiscal quarter 2024 report. Amon stated Qualcomm will continue to license its 5G modems to Apple until March 2027 and that he is “happy with the relationship with Apple.”
Apple has taken several steps to try and create distance from Qualcomm over the last few years, including the acquisition of Intels Modem division in a $1 billion deal back in 2019. The deal gave Apple more than 2,200 Intel employees and over 17,000 patents. However, A report from Bloomberg in 2023 made it clear that Apple was struggling to produce its own 5G modems. It has been reported the prototypes that have so far been produced failed to outperform the Qualcomm chip.
The idea behind developing an in-house modem is that Apple would be able to maintain higher standards by developing the tech and wield greater control over the supply chain. This would allow the company to push more units, at least in theory, and avoid situations like the chip shortages that plagued manufacturers in 2021.
As it is we are likely to continue to see Qualcomm chips in the iPhone 16 up to at least the iPhone 18. It appears that, according to Bloomberg's Mark Gurman at least, Apple may be focusing its effort on completing a 6G modem instead. However, it is unlikely that we will see anything on that front as the 6G standard is unlikely to take effect until 2030. This raises the question of if Apple will extend the Qualcomm deal again as time goes on.
Apple extending the contract again is telling when it comes to plans to produce its own modem. However, it should be noted that this is not the signing of a new contract, something that Apple has been speculated as wanting to avoid. This means Apple is likely still aiming to end the contract when it can. The issue remains that, if Apple is unable to reach the modem standards it requires, it may soon not have a choice but to renew again. As it is only time will tell if Apple will be able to develop its modem, whether 5G or 6G, and when we might see it in future iPhone variants.
