Apple, the world’s most valuable company has more than $166 billion in the bank and produces over $100 billion in annual free cash flow. The company has, for many years, also been working to develop its own modem chip, seemingly to no immediate avail.
Dan Gallagher for The Wall Street Journal:
[D]esigning the complex chips is apparently far easier said than done. Qualcomm, Apple’s current supplier of modem processors, said Monday morning that the two companies have extended their current chip-supply deal to cover iPhones launched from 2024-2026. That’s two years past the point when Qualcomm last told investors that its iPhone business would peter out, and three years beyond the company’s first projection for the end of that business when it laid out an ambitious plan in late 2021 to diversify away from smartphones…
Apple clearly wants to control more of its own destiny in that world, so will no doubt keep at its efforts to make an in-house modem chip. But Bernstein analyst Stacy Rasgon said Monday that “the longer it takes, the harder it is likely to be as cellular technologies do not stand still.” Everyone knows Apple’s pockets are deep; not so many seem to understand that Qualcomm’s competitive moat is too.
MacDailyNews Take: “Designing the complex chips is apparently far easier said than done,” unless you’re Huawei.
If this happened under Steve Jobs, the team would be publicly labeled as the failures they are and summarily dismissed, with a new, better, smarter, actually capable team rapidly assembled to do the job right. But, under Tim Cook, Apple’s modem team just keeps getting two more years every two years.
See also: Qualcomm to supply Apple with 5G modems through 2026 – September 11, 2023
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There are patent barriers that likely make it much harder. This is not an issue in China, where IP theft is just the way you do business,
Harald, that actually makes sense, I mean if they can make the M-1 chip and supposedly build a car (vaporware), then surely they can make a modem. I was unaware of patents being an issue…can’t Apple get around that with its Intel modem purchase from a few years ago?
Considering that the purchase was back in 2019, unless Apple has newer 5G patents, the ones they bought are getting long in the tooth and by 2026 we may already be starting in 6G, whatever that may be.
Wikipedia articles on xG technologies pegs a change every 10 years or so. Prior to 4G in 2011/12 this was true. 5G appeared in first device in 2019 so given about 7-8 years (2026-27), I think the expectation of developing and move to 6G is pretty reasonable.
Apple licenses the ARM core of the M-1 chip. They didn’t build that.
They just designed the peripherals around it and had TSMC fabricate it.
5G modems are incredibly complex. Unlike the M-1, Apple can’t simply choose to do it their way; they have to meet the specs which are driven by Qualcomm.
It’s more like it’s much harder to make a modem that adheres to interconnection standards that you have to meet for your modem to work on multiple carriers networks. It’s hard to adhere to the standards without violating patents. Guess who is one of the driving forces on the standards body…yep Qualcomm. If this was just make a new power efficient modem Apple would kill it, but that backward compatibility thing is a b*tch!
I have to agree with Tom. Apple certainly can make great advances in areas they completely control as with iOS hardware. When it comes to playing well with others, as with modem chips, it would be so much more difficult. Unless Apple is planning on taking over a good part of the global cellular/satellite infrastructure, I doubt the agreement with Qualcomm will end even come 2027.
As per past history, Apple is likely not trying to meet the standards and speeds of today’s modems, but preparing one to meet future needs and speeds. In other words, setting higher benchmarks.
Step one for Apple would be to bring out a new Air Port. I don’t see that happening anytime soon.
It was rumored that Apple employees were annoyed at the amount of chip work that needed to go into the Apple Vision Pro. At the time they said it was taking excellent people away from developing other chips.
Apple play is the long game, nine years for the iPad six years for the iPhone 13 years for Apple Silicon, or 6 to 10 years to reach parity with Nvidia GPU’s, a Apple modem of some type is coming, when the Apple Vision Pro is released, it will become apparent that Apple will have to design a modem, if they ever hope to fit a future generation of the Apple Vision Pro onto a frame of glasses that’s the endgame, and to do that takes time, that’s how a long game works.
Maybe Apple can use Timmy’s abandoned glass factory in Arizona
The answer is simple. It’s because you’re too concerned with the carbon neutral by 2030.