- Apple may bring its own custom-designed 5G chipset in 2023.
- Right now, Apple sources 5G modems from Qualcomm.
- Apple announced that it is working on modems in December last year.
Apple may be planning to switch to an in-house custom-designed 5G modem as early as the 2023 iPhone models. This would mean that the iPhone maker would have to no longer ask Qualcomm for its 5G modems that power the current generation of iPhone. Apple has been expanding its chip-making business at a steady pace, but the rumours around a 5G baseband chip have been there for a long time now. The new timeline for Apple's own 5G modems comes courtesy to renowned analyst Ming-Chi Kuo.
In his recent investors note, obtained by MacRumors, Kuo said Apple's custom-designed 5G modem on the iPhone will arrive in 2023 "at the earliest." This pushes back the timeline that rumours were pointing out previously. According to several earlier leaks, Apple would launch the 2022 iPhone with its 5G modems. Right now, Apple sources 5G modems from Qualcomm, but switching to in-house chips will save Apple a lot of expenses. Plus, Apple recently proved its M1 chipset is powerful enough to sustain itself in the market despite being entirely new. It is likely Apple's own custom-designed 5G modem will prove to be faster and more efficient than what the iPhone 12 series uses.
And while this may be good news for Apple that will no longer have to rely on Qualcomm, it will be bad for the chipmaker, which will have to look for other available options to compensate for the loss of a promising partner. "When the supply constraints improve, MediaTek and Qualcomm will have less bargaining power over brands, resulting in significantly higher competitive pressure in the mid- to low-end market," Kuo said in his note. And, interestingly, the 2023 timeframe is something that Barclays analysts also tipped back in March.
Apple officially confirmed that it is making its own modem back in December 2020. The iPhone maker has been moving in the direction that leads it to minimise the dependency on third parties for hardware. One of the reasons why Apple wants that is to avoid controversies and the lawsuits that often end up squeezing money out of the iPhone maker's deposit. Apple fought a patent dispute with Qualcomm some years back, and because of the rift, Apple had to ask Intel for chip designs in 2018. Intel's modem division was not making profits despite having Apple as a partner, which is why it eventually exited the modem business and sold the division to Apple for $1 billion back in 2019.
Now, Apple is leveraging whatever resources it has got from the purchase of Intel's modem business. It has invested a huge sum into its research and development centres focusing on 5G modems. But as Kuo has pointed out, it is going to take at least two more years for Apple to come up with its own custom-designed modems. Till then, it will have to continue using Qualcomm's baseband chipsets, a deal that came through after the patent dispute was settled. Apple uses the Qualcomm X55 modem on the latest iPhone 12 models. The deal, however, is likely valid until 2023 when Qualcomm will be providing Apple with a mix of X65 and X70 modems for this year's and next year's iPhone models.