December 11, 2020
Bloomberg News reported that a senior Apple official told its employees on Thursday that it had begun building its own cellular modem for future devices, in a move that would enable the company to dispense with Qualcomm components.
The move was revealed by Johnny Srouji - Apple's Senior Vice President of Hardware Technologies - in a public meeting with Apple employees, according to what the agency quoted people familiar with with. After the report, Qualcomm shares were down 6.3 percent in extended trading.
“This year we started developing our first built-in cellular modem, which will enable us to make another major strategic move,” said Srouji. “Long-term strategic investments like this are an important part of enabling our products, and making sure we have a rich portfolio of innovative technologies for our future,” he added.
The cellular modem is one of the most important parts of a smartphone, as it allows making phone calls and connecting to the Internet via cellular networks.
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Srouji said that the billion-dollar acquisition of the modem sector from Intel in 2019 helped Apple build a team of hardware and software engineers to develop its own cellular modem. He said: The modem is one of the few wireless chips that the company is designing, and this includes: the W chips in the Apple Watch, and the U1 chips in the iPhone phones that are designed to provide accurate information about the location.
Newer iPhones with 5G technology use components from Qualcomm. Before that, Apple had been using components from Intel for a few years, and then bought the business unit that produces those components from Intel.
Srouji did not say when the cell modem will be ready to ship in the products, but the 2019 patent agreement between Apple and Qualcomm includes a 6-year license agreement. Qualcomm charges phone makers with licensing fees based on their wireless patents, regardless of whether or not they use the chips.
During the meeting with the staff, Srouji also shed light on Apple's other business in the field of chipsets, including: the new M1 processors in the MacBook Air, MacBook Pro, and the new Mac mini. . "Apple is working on a series of Mac chips," said Srouji.
