Apple is ready to give the most significant blow to its biggest supplier in late 2024 by developing its own cellular modem chips.
As per Bloomberg, the company is busy doing R&D to develop its first cellular modem chip by early 2025. This would mean that it’ll be shifting from Qualcomm Inc.’s electronics.
Apple is the biggest customer of Broadcom and is going to risk it all as soon as possible. About 20% of Broadcom’s revenue was coming from Apple. Further, for Qualcomm, it’s going to be a huge loss as well because its annual sales from iPhone are about 22%.
Apple has already removed Intel Corp. components from its Mac lineups a few years ago. The latest MacBooks use the M2 chip, which is an Apple-exclusive chip that doesn’t require a fan to get cooled.
The M2 chips are silicone-based and are manufactured by Apple’s chip-making partner TSMC. This move has allowed Apple to gain greater control over its Mac hardware, and it seems the company is now looking to do the same with its mobile hardware.
There are several reasons why Apple may be looking to develop its own cellular modem chips. One reason is to reduce its dependence on third-party suppliers.
By developing its own modem chips, Apple will have greater control over the design and production of its hardware, which will enable it to bring new features and capabilities to its devices more quickly and at a lower cost.
Another reason is to improve the performance of its devices. Qualcomm is one of the leading providers of cellular modem chips, but its technology is not always the best match for Apple’s needs.
By developing its own modem chips, Apple will be able to tailor the technology to its specific requirements, which will result in faster and more reliable performance.
The move is also a clear indication that Apple is looking to take more control of its supply chain.
As the company becomes increasingly reliant on technology from third-party suppliers, it is exposed to a number of risks, such as supply chain disruptions and price hikes.
By having its own modem chips, Apple will be able to mitigate these risks and ensure a steady supply of components for its devices.
However, there are also challenges that Apple will face in developing its own modem chips. One of the significant challenges will be to match the performance and capabilities of existing modem chips from Qualcomm and other leading providers.
This will require significant investment in R&D and advanced manufacturing technology, as well as a deep understanding of the latest cellular modem technologies.
Another challenge will be to ramp up production of the new modem chips quickly enough to meet demand.
Developing a new modem chip is one thing, but producing them in large quantities is a whole other challenge. Apple will need to invest heavily in manufacturing infrastructure and logistics in order to produce the chips at scale.
Moreover, Apple is planning to revise this cellular modem chip soon after its launch. The plan is to combine Wi-Fi, Bluetooth, and cellular modem capabilities in one component.
