Apple has extended its current manufacturing contract with Qualcomm and will continue to use the company’s 5G modems in iPhones. Initially, Apple was said to only aim to extend the contract until 2026, but it has now been revealed that the contract has been extended until 2027.
Qualcomm CEO Cristiano Amon confirmed the news in the company’s first quarter 2024 report. Amon said Qualcomm intends to continue licensing 5G modems to Apple through March 2027 and is “pleased with our relationship with Apple.”
Apple has taken several steps in recent years to get closer to Qualcomm. That includes acquiring Intel’s modem division for $1 billion in 2019. With the deal, Apple acquired Intel’s more than 2,200 employees and more than 17,000 patents. However, the report from Bloomberg in 2023 Apple has revealed that it is struggling to manufacture its own 5G modem. Prototypes produced so far have reportedly failed to outperform Qualcomm’s chips.
The idea behind developing in-house modems is that by developing technology, Apple can maintain higher standards and exercise greater control over its supply chain. This would, at least in theory, allow the company to launch more units and avoid situations like the chip shortage that plagued manufacturers in 2021.
At this rate, it is likely that Qualcomm chips will continue to be installed in the iPhone 16 until at least the iPhone 18. Apple may be focusing on perfecting its 6G modem instead, at least according to Bloomberg’s Mark Garman. However, the 6G standard is unlikely to come into force until 2030, so it is unlikely that anything will happen on this front. This raises the question of whether Apple will extend its contract with Qualcomm again over time.
By extending the contract again, Apple has revealed when it plans to produce its own modems. However, it is important to note that this is not the signing of a new contract, and it is speculated that Apple would like to avoid this. This means Apple is likely still aiming to terminate the contract as soon as possible. The problem remains that if Apple can’t reach the required modem standards, you may have no choice but to update immediately. Also. Only time will tell if Apple can develop a modem with his 5G or 6G and when it will be included in future iPhone variants.
