Photo taken on Aug. 14, 2023 reveals iPhones at an Apple retailer in Hangzhou, East China’s Zhejiang province. On the identical day, knowledge launched by TechInsights confirmed that Apple’s iPhone gross sales in China surpassed the United States for the primary time within the second quarter of 2023, changing into the most important single market for iPhone shipments.
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Qualcomm mentioned Monday that it will supply Apple with 5G modems for smartphones through 2026.
Wall Street analysts and Qualcomm officers had beforehand mentioned they anticipated Apple to make use of an internally developed 5G modem beginning in 2024.
The continued gross sales to Apple will enhance Qualcomm’s handsets enterprise, which reported $5.26 billion in gross sales within the quarter resulted in June, and will soften the blow of probably dropping a crucial buyer. About 21% of Qualcomm’s fiscal 2022 income of $44.2 billion got here from Apple, in response to a UBS estimate.
Qualcomm at present provides Apple with 5G modems for its iPhones, however Apple has been working to construct its personal modems to maneuver away from Qualcomm chips. It purchased Intel‘s smartphone modem division in 2019 to construct its personal modem. However, analysts have instructed that it will be challenging for Apple to maneuver away from Qualcomm’s chips due to their complexity.
Qualcomm additionally makes cash from Apple through mobile licensing charges, which have been about $1.9 billion in 2022, in response to the UBS estimate.
Qualcomm continues to gather royalties from Apple underneath a six-year settlement, it mentioned. That settlement was struck on the finish of a authorized battle between Apple and Qualcomm over royalties that was settled in 2019.
Qualcomm says that it expects to solely supply 20% of the modems wanted for Apple’s 2026 smartphone launch, signaling that it probably nonetheless expects the Apple enterprise to finally decline. A Qualcomm official mentioned the corporate was not updating its steerage to absorb account the Apple gross sales.
Apple is predicted to announce new iPhones, likely called iPhone 15, on Tuesday, which will use Qualcomm modems.