Apple failed to develop a 5G modem chip and will rely on a Qualcomm processor for its 2023 iPhone models. The tech giant’s attempts to produce a 5G modem chip may have failed, according to Apple analyst Ming-Chi Kuo, and Qualcomm will likely remain Apple’s primary chip supplier for the iPhone 15 series, expected to ship next year.
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[Company Update] Qualcomm (QCOM.O)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%).
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) June 28, 2022
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My take:
1. Qualcomm's revenue and EPS in 2H23-1H24 will likely beat market consensus thanks to its sole supplier position for 5G chips of 2H23 new iPhones as Apple fails to replace Qualcomm.— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) June 28, 2022
Unlike the company’s previous projection of 20%, Kuo believes that Qualcomm will provide 100% of the processors for the 2023 iPhone models. The development of Apple’s own 5G modem chip for the iPhone may have failed, according to Kuo’s most recent survey, therefore Qualcomm will continue to be the only provider of 5G processors for new iPhones in 2H23, with a 100 percent supply share (vs. the company’s earlier estimate of 20 percent).
Furthermore, “Apple will continue to build its own 5G chips, but by the time Apple succeeds and can replace Qualcomm, Qualcomm’s other new businesses should have expanded sufficiently to effectively outweigh the negative effects caused by the loss of iPhone 5G chip orders.”
Recall that Intel 5G processors weren’t up to Apple requirements, thus the company was unable to employ them in the 2020 launch of the iPhone 12 series. Since that time, the company’s iPhone and iPad models have been equipped with Qualcomm 5G modem processors.
Apple has been developing its own 5G modem chip for a long time and even purchased Intel’s modem chip division to jumpstart the process. According to rumors, Apple had planned to employ its own processor in iPhone models starting in 2023, but it now seems Qualcomm will be the source of modem chips for at least another two iPhone generations.