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On February 1st, Qualcomm stated during its financial conference call that Apple had extended its license agreement for Qualcomm’s modem chips (baseband) until March 2027. This extension also indicates a further delay in Apple’s in-house development of 5G baseband chips.
// Extending Qualcomm’s Baseband Chip Authorization until 2027 //
It is widely believed that Apple’s initiative to develop its own 5G baseband is driven by the desire to reduce dependence on Qualcomm as well as to potentially address signal issues and increase profit margins. However, it appears that this issue will not be resolved in the near future.
According to leaks, the iPhone 16 Pro series this year will be equipped with Qualcomm’s Snapdragon X75 baseband chip, while the iPhone 16 and iPhone 16 Plus will retain the Snapdragon X70 baseband chip from the iPhone 15 series.
The Snapdragon X75 is Qualcomm’s latest generation 5G baseband, achieving up to 7.5Gbps of downlink transmission speed, setting a new global record for the fastest 5G transmission speed in the Sub-6GHz frequency band.
In September 2023, Qualcomm announced a new supply agreement with Apple to provide Snapdragon series 5G modems and radio frequency systems for iPhones released in 2024, 2025, and 2026.
In the 2022 fiscal year, Qualcomm’s total revenue was $44.2 billion, with approximately 21% expected to come from Apple, as per UBS estimates. Qualcomm’s revenue for the 2023 fiscal year was $35.82 billion, with Apple still being the main contributor.
// Dilemma in Research and Development //
Apple has always been lagging in baseband chip development. Initially, iPhones used chips from Infineon, which were priced at less than half of Qualcomm’s baseband chips.
During the era of 4G, Infineon failed to introduce 4G baseband chips in time, leading Apple to compromise and adopt Qualcomm’s 4G baseband. Later, Intel acquired Infineon’s baseband technology for $1 billion, developing its own 4G baseband. Apple then shifted to Intel, using Intel’s baseband chips in all iPhone models from iPhone 7 to iPhone 11. However, Intel’s performance consistently fell behind Qualcomm’s during that period, resulting in frequent complaints about poor signal quality on Apple devices.
Apple made a firm decision to conquer 5G baseband chips in 2019 by acquiring the aforementioned baseband development department (Infineon) from Intel. However, even after five years, the challenge remains unmet.
Experts point out that Apple’s current difficulties in self-developing 5G baseband chips mainly stem from two factors: firstly, the legacy code from Intel requires Apple to rewrite it, potentially disrupting existing functions when adding new features; secondly, during chip development, caution must be taken to avoid infringing Qualcomm’s patents.
In 2023, there were rumors that Apple would abandon 5G baseband development. However, considering Apple’s renewal of the Qualcomm baseband supply agreement, abandonment is not entirely out of the question. After all, by 2027, mobile communication standards may have transitioned to the 6th generation.
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