Apple and Qualcomm Extend 5G Chip Deal: Apple and Qualcomm’s deal secures 5G chips for Apple until 2026. Apple faces increasing challenges in the Chinese market and is working to enhance global supply chains. This relationship has been extended unexpectedly. Apple is working on improving its modem technology despite designing its chips for computers.
Qualcomm makes modem chips for phone data networks. The shares rose by 4% after the news. Apple’s stock only increased by 0.5%.
Qualcomm from San Diego made a deal with Apple to sell chips in 2019, ending their legal battles. The supply agreement ends this year, so that the upcoming iPhones will be the last under this deal.
Qualcomm will provide Apple with chips for future iPhones until 2026 under this newly disclosed deal. The deal’s worth is unknown, but Qualcomm says the terms are unchanged from their last one. Apple still needs to comment on this.
UBS experts predict Qualcomm’s chip sales to Apple will reach $7.26 billion in 2022.
Qualcomm stated that its patent licensing deal with Apple, made in 2019, remains valid until 2025. Either company can extend it for two more years if desired.
With Apple’s worsening issues in China, enhancing supply lines elsewhere is crucial. Susannah Streeter from Hargreaves Lansdown suggests that Apple may be abandoning or delaying its plans to develop its chips due to its significant partnership with Qualcomm.
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Apple is striving to enhance its modem technology. In 2019, it bought Intel’s modem business for $1 billion. The company has yet to announce a timeline for producing its chips. Qualcomm predicts its chips will be only 1/5 of Apple’s iPhones by 2026.
However, Qualcomm’s previous cautious statements about its relationship with Apple have not been accurate. Despite Qualcomm’s earlier statement, all 14 iPhone models in 2017 utilized Qualcomm chips. Similarly, Qualcomm’s CFO, Akash Palkhiwala, revised his expectations for the 2023 iPhones. He believes most will have Qualcomm modems, highlighting the relationship’s unpredictability.
Our Reader’s Queries
What is the Apple and Qualcomm deal?
On Aug. 3, UBS analysts projected that Qualcomm raked in $7.26 billion from chip sales to Apple this year. The patent licensing agreement between Qualcomm and Apple, inked in 2019, is still active and set to expire in 2025. However, the companies have the option to prolong the deal for an additional two years.
Is Apple still using Qualcomm chips?
Apple had originally intended to incorporate its own modem chips in its 2023 models, but ultimately decided to push back the release to 2024. After shelving their plans, Apple struck a deal with Qualcomm to supply the modem chips, as they had yet to finalize their own product.
What is the Qualcomm iPhone deal?
Qualcomm Technologies has just inked a deal with Apple to provide Snapdragon 5G chipsets for upcoming smartphone releases in 2024, 2025, and 2026.
What is the Qualcomm Inks deal with Apple?
Apple and Qualcomm have made a deal for the chipmaker to provide Apple with 5G modems through 2026. This agreement marks a significant partnership for both companies.