Apples New Cellular Modem Is Its New Strategic Investment

Jan, 2021 - by CMI

Apple is planning to design its own cellular modem device, which can be bad news for third-party suppliers like Qualcomm.

Apple is on its way to develop its own cellular modem in 2020. According to one of the company’s executives, Johny Srouji, Apple has already started the development process of the internal cellular modem, which is another strategy to make a transition. Long lasting strategic investments like this are proof that innovation and technology are the two main aspects that Apple always focuses on.

Apple currently uses the Qualcomm cellular modems which are compatible with their current devices including the latest iPhone 12. The tech giant and chipmaker (Qualcomm) have signed a six-year chipset deal in 2019 right after settling a dispute related to royalty. The dispute was settled so that the next Apple devices could still be equipped with Qualcomm parts. After these incidents, it is not a surprise that the company will be planning to design its own cellular modem. However, Apple did purchase the majority of Intel's business of smartphone modem for US$1 billion last year after Qualcomm dropped its plans to make 5G modems. According to Bloomberg, Apple has been hiring teams of engineers from Qualcomm quite recently and has teams ready in San Diego, Europe, and Cupertino focusing only on the development of the cellular modem.

It is not a secret anymore that Apple is looking forward to decrease its dependency on third-party suppliers since they started making iPhones with their own processor 10 years ago. This November Apple launched the M1 SoC and released the Mac Mini, MacBook Pro, and MacBook Air models, which are powered by their in-house ARM-based Mac processor. Apple's decision of being self-sufficient can come as a big blow on Intel and Qualcomm because the tech giant is responsible for approximately 7% of Intel's sales and 11% of Qualcomm's revenue.