Apple is planning to develop its own wireless connectivity modems for use in future products. The move towards in-house modem development is a significant shift for the tech giant, as it has previously relied on third-party vendors for this technology. This new development will allow for more flexibility and innovation in the design and features of Apple's devices.
According to a story on Bloomberg and sources familiar with the matter, as part of its plan to use more internal components, Apple is planning to stop using chips from Broadcom in its devices by 2025. This move could have a negative impact on Broadcom, which is a major supplier to Apple.
As part of the shift, Apple also aims to develop its first cellular modem chip by the end of 2024 or early 2025, letting it swap out electronics from Qualcomm, said the people, who asked not to be identified because the plans are private. Apple had planned to replace the Qualcomm part as soon as this year, but development snags have pushed back the timeline.
Apple is Broadcom’s largest customer and accounted for about 20% of the chipmaker’s revenue in the last fiscal year, amounting to almost $7 billion. Qualcomm got 22% of its annual sales from the iPhone maker, representing nearly $10 billion, though that company has warned for years that its Apple reliance will wane.
The iPhone is Apple’s top moneymaker, generating more than half of its $394.3 billion in revenue last year. The phone also has helped fuel growth at Broadcom, which refers to Apple as its “large North American customer” during earnings calls. The chipmaker makes a combined component that handles both Wi-Fi and Bluetooth functions on Apple devices.
Apple is developing an in-house replacement for that chip and is aiming to start using it in its devices in 2025, the people said. In addition, it’s already working on a follow-up version that will combine cellular modem, Wi-Fi and Bluetooth capabilities into a single component.
Source: Bloomberg - Click here to read the original story.