INSUBCONTINENT EXCLUSIVE:
part in 2025, according to people familiar with the situation, dealing a blow to one of its biggest suppliers.
As part of the shift, Apple
also aims to ready its first cellular modem chip by the end of 2024 or early 2025, letting it swap out electronics from Qualcomm Inc., said
the people, who asked not to be identified because the plans are private
Apple had been previously expected to replace the Qualcomm part as soon as this year, but development snags have pushed back the
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.
Shares of Broadcom fell as much as 4.7% on the news before paring their decline
The shares closed at $576.89, down 2%
Qualcomm slid as much as 1.6% before closing at $114.61, down 0.6%
Apple rose 0.4% to $130.15.
The moves will further upend a chip industry that makes billions of dollars supplying Apple components
processors from its Mac computers, opting instead to use in-house chips known as Apple Silicon
its $394.3 billion in revenue last year
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
component.
A representative for Cupertino, California-based Apple declined to comment
the company has made on the topic.
In November, the chipmaker said it expected to supply the vast majority of modems for the 2023 iPhone
launch, up from a previous assumption of just 20%
product, such as a high-end iPhone model
After aiming to launch its own cellular modem by this year, the company faced problems with overheating, battery life and getting the
The iPhone currently works with more than 100 wireless carriers in over 175 countries, which necessities a lengthy and cumbersome testing
process.
A cellular modem is what allows iPhones to handle phone calls and connect to the internet while away from Wi-Fi, making it the
most critical part of the device for most people
long transition also could put Apple in a tricky position
The company will still need to rely on Qualcomm for several years as it replaces the component in various devices.
Apple first started work
wireless technology development.
Read more: Apple builds team in new office to make wireless chips
The Wi-Fi and Bluetooth chip effort is
newer, and a release will take longer
But Apple has already made some wireless chips in the past, including the H2 processor found in AirPods and the W3 chip found in Apple
Watches.
Apple and Qualcomm were embroiled in a legal war over royalties and patents related to modems until a settlement in 2019
At the time, Apple deemed the truce necessary to bring 5G support to the iPhone in 2020
The companies agreed that Qualcomm would supply parts to Apple through 2024.
Apple also has had a strained relationship with Broadcom
pandemic-fueled supply crunch.
In 2020, Apple said it was spending a total of $15 billion on purchases of Broadcom chips in an arrangement
running through the middle of 2023
Prior to the 2020 agreement, Tan indicated that Broadcom might divest the business that supplies chips to Apple.
For Broadcom investors,
