“My latest survey indicates that Apple’s own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company’s previous estimate of 20%),” Ming-Chi Kuo, an analyst at TF International Securities, wrote in a tweet.
While the iPhone 13 and other recent Apple smartphones use Qualcomm’s X60 modem to connect to 4G and 5G networks, Apple has been making moves in the wireless connectivity market. In 2019, the company bought Intel’s modem business, leading to speculation that it was developing and planning to use in-house parts as soon as next year.
Kuo, who is known for covering parts of Apple’s supply chain and making accurate predictions of suppliers before products are announced, said he expects that Apple will continue to develop 5G chips.
Qualcomm is currently in the process of diversifying its chip business away from primarily handsets and into new markets including car semiconductors and low-power applications.
Qualcomm previously said that it was expecting to supply 20% of iPhone modems in 2023 as part of a bullish financial forecast, suggesting to investors that the chipmaker doesn’t need Apple’s business to grow.
Apple and Qualcomm have long been partners, but the relationship has also been contentious. The companies faced off in courts around the world over Qualcomm’s licensing fees and how it sold its chips. Apple sued Qualcomm for $1 billion in the U.S. before the companies signed a settlement in 2019 that included a six-year patent licensing agreement and an arrangement to use Qualcomm parts.
The chipset agreement indicated that Qualcomm would supply some but not all 5G modems for iPhones to Apple through 2024, according to a statement of work released as part of court documents.
An Apple representative declined to comment. A Qualcomm representative didn’t immediately respond to a request for comment.
Even with Tuesday’s rally, Qualcomm shares are down 26% this year, tumbling alongside the rest of the tech market.