During the Mobile World Congress (MWC) 2023 in Barcelona, Qualcomm CEO Cristiano Amon hinted that Apple may use their own in-house 5G modems instead of Qualcomm's 5G modems in 2024. Amon stated that Qualcomm was "making no plans for 2024" and that the decision to use their own modem was up to Apple.
This is not the first time rumors have circulated about Apple using their own hardware for 5G modems. In 2021, Apple analyst Ming-Chi Kuo reported that the transition would begin in 2023. However, Apple extended their partnership with Qualcomm by a year, possibly due to technical difficulties.
Qualcomm had previously informed investors in 2021 that they did not expect to provide 5G modems to Apple in 2023, but the iPhone maker decided to continue the partnership for another year. The two companies have a six-year license agreement for chips as part of a 2019 agreement that put an end to legal battles between them, with the option to extend the period by two years.
The rivalry between Qualcomm and Intel over the production of mobile chipsets had previously caused issues for Apple. In 2019, Intel accused Qualcomm of forcing them out of the mobile chipset business, leading to Intel selling their mobile chipset division to Apple in 2019 at a "multi-billion dollar loss," according to a court filing.
Despite the complications, Apple has continued to invest in their own hardware production. The move to in-house modems is expected to provide greater control over the hardware production process, which could lead to more efficient and cost-effective production in the long run.
However, Apple's decision to move away from Qualcomm's 5G modems may not be a complete break. The six-year license agreement between the two companies may still allow for the use of Qualcomm's 5G modems if Apple decides to continue the partnership. This would give Apple more flexibility in their hardware production and allow them to choose the most cost-effective option for their devices.
The shift towards in-house production is not unique to Apple. Many companies have recognized the benefits of greater control over the production process and have invested in their own hardware production capabilities. For example, Google has developed their own Pixel phones and Microsoft has developed their own Surface devices.
In-house hardware production allows companies to develop devices that are better suited to their specific needs and can be more cost-effective in the long run. Additionally, it provides a competitive advantage by reducing reliance on external suppliers and giving companies greater control over their supply chain.
The move towards in-house production also highlights the growing importance of hardware in the tech industry. As software and hardware continue to become more integrated, the ability to produce high-quality hardware has become a key factor in the success of tech companies.
In conclusion, the hints from Qualcomm CEO Cristiano Amon suggest that Apple may use their in-house 5G modems instead of Qualcomm's in 2024. While this move may give Apple greater control over their hardware production, the six-year license agreement between the two companies may still allow for the use of Qualcomm's 5G modems if Apple decides to continue the partnership. The shift towards in-house production is not unique to Apple and highlights the growing importance of hardware in the tech industry.