Rumors and news that Apple will design and manufacture its own modem chip for cellular connections have come a long way. They took a lot more strength when in 2019 Apple bought the modem division of Intel and now Bloomberg is reporting that Apple has finally started developing these chips.
Better consumption per watt and lower price
According to Bloomberg sources, Johny Srouji, vice president of hardware technologies, invited some employees to a meeting to discuss plans to develop the company’s first cellular modem. During the meeting, Srouji confirmed that Apple has started the development of these chips.
This year, we began the development of our first internal cellular modem which will enable another key strategic transition. Long-term strategic investments like these are a critical part of creating our products and ensuring that we have a rich stream of innovative technologies for our future.
It was clear that the acquisition of Intel’s modem division would pay off sooner or later, it’s not clear when. According to information provided by Bloomberg, Apple began development “this year” at best in January.
“This year, we began development of our first internal cellular modem which will enable another key strategic transition.”
Apple has already developed similar chips, such as the H1 used by AirPods or the U1 in iPhone and Apple Watch. For now, the iPhone’s 5G chips have been designed by Qualcomm and a chip designed by Apple could represent a very significant change on two fronts: consumption and price.
The move expands Apple’s push towards greater reliance on its own parts to the detriment of Qualcomm, Intel and others. Qualcomm derives about 11% of its revenue from Apple, while Intel makes about 7% of sales, according to data compiled by Bloomberg.
Thus, a chip manufactured by Apple could represent a longer battery life accompanied by the arrival of mmWave throughout the iPhone family, as well as a slight decrease in its price, as we have already seen in Macs with Apple silicon.
Following the publication of the article in Bloomberg, Qualcomm shares fell just over 6%. It is costly that, as Srouji commented, this is a strategic move for Apple. Even if its competitors may not like it, it will allow the Cupertino company to develop better components and to have a better control of time and innovations, without a doubt excellent news.