To reduce the manufacturing costs of its products, Apple knows that it is more advantageous to design its own components and then have them manufactured by a partner, rather than entrusting everything to a third-party supplier. The 5G modem is the perfect example. Since 5G has existed in the iPhone, Apple has been using Qualcomm, a supplier that charges quite a lot for 5G modems per unit, which inevitably increases the manufacturing cost of the iPhone. The Cupertino company wants to separate itself from this agreement with Qualcomm, to shape its own chips and no longer depend on a third party.
Apple’s 5G modem to arrive in iPhones in large numbers in 2025
Remember, 5 years ago, we learned that Apple had bought Intel’s modem division for the colossal sum of 1 billion dollars. This gigantic investment on the part of the Cupertino company allowed it to recover thousands of patents filed by Intel as well as hundreds of engineers who had been initially hired by Intel. This acquisition has not borne fruit for the moment, but the first results should appear in the eyes of consumers as early as next year, according to Ming-Chi Kuo.
In a recent post on X, the analyst explains that shipments of Apple’s first 5G chip will reach between 35 and 40 million units as early as next year. Apple’s goal in the short term will be to offer its 5G modem in all iPhone 17 models, which will be a big saving compared to millions of orders placed with Qualcomm each quarter.
If that 35 million to 40 million number sounds impressive, it pales in comparison to Apple’s goals for 2027. The Cupertino company plans to ship about 160 million to 180 million 5G modems. The company is expected to start by including its 5G modems in the latest iPhones, then in older generations of iPhones and then in cellular iPads, which also require a 5G modem.
These shipment estimates are in line with Apple’s desire to abandon its partnership with Qualcomm as early as 2026, the Cupertino firm has not extended its supply agreement for Qualcomm 5G modems. This clearly means that the company is looking to take off and offer its own 5G modems as is already the case with the Ax chip in iPhones and the Mx chip in Macs and iPads.
Will including an Apple 5G modem in iPhones reduce the price charged to consumers? That’s not certain, but what is certain is that Apple will gain a few dollars on its profit margin.
My latest supply chain survey indicates that Apple’s in-house 5G chip shipments will grow rapidly and replace Qualcomm’s 5G chips. It’s estimated that Apple’s in-house 5G chip shipments will reach 35-40 million units in 2025, 90-110 million in 2026, and 160-180 million in 2027.…
— Ming-Chi Kuo (@mingchikuo) September 6, 2024
