Apple is said to be working on developing its very own custom 5G baseband chip. As the company works towards solidifying its independence, the rollout of its own 5G cellular modem will mean that Apple will no longer rely on Qualcomm to be a supplier for the iPhone.
Apple analyst Ming-Chi Kuo has reportedly stated that Apple plans to integrate its custom 5G baseband chip into the 2023 iPhone “at the earliest”. According to an investor’s note seen by MacRumors, Qualcomm will continue to supply 5G modems until the transition is complete. Additionally, the transition away from Qualcomm will force the company to enter new markets to make up for the loss of orders from Apple.
We predict that the iPhone will adopt Apple’s own design 5G baseband chips in 2023 at the earliest. As Android sales in the high-end 5G phone market are sluggish, Qualcomm will be forced to compete for more orders in the low-end market to compensate for Apple’s order loss. 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.
This isn’t the first time reports surrounding Apple’s custom 5G modem chip have surfaced. Two years ago, when Apple and Qualcomm were undergoing a legal battle, reports began to filter in saying Apple was preparing the development of its own chip. In 2019, Apple also purchased the majority of Intel’s smartphone modem business in preparation for the development of its own in-house modem.
Independence from other suppliers seems to be working its way up the priority list for the Cupertino company. Apple has already been successfully transitioning away from its use of Intel chips within its Mac products. It begs what Apple will begin to develop next to strengthen its independence from other suppliers in the future.