iPhone
Tomorrow.. “Apple” unveils “iPhone 15”
Dubai – Al Arabiya.net
Published on: September 11, 2023: 05:52 PM GST Last updated: September 11, 2023: 06:28 PM GST
Apple has extended an agreement to acquire modem semiconductors from Qualcomm for another three years, indicating that its ambitious efforts to design chips in-house are taking longer than expected.
Qualcomm said in a statement on Monday that the new agreement will cover smartphone launches in 2024, 2025 and 2026. The two companies’ agreement was scheduled to expire this year, and it was expected that the latest iPhone – scheduled for release tomorrow, Tuesday – would be one of the last devices to rely on the Qualcomm modem chip.
Instead, Qualcomm will maintain its profitable position within Apple’s supply chain. The iPhone maker is Qualcomm’s largest customer, accounting for nearly a quarter of revenue, according to data compiled by Bloomberg. Their relationship helps validate Qualcomm’s claim of having the best smartphone modem, a critical component that allows devices to connect to the Internet and make calls. Starting with the “iPhone 12” generation, the chip supports faster fifth generation networks.
Qualcomm shares jumped more than 8% in premarket trading in New York on Monday. Apple shares rose less than 1%.
For Apple, this move indicates that building a modem is more difficult than expected.
The new agreement comes just one day before Apple’s biggest announcement of the year. The company is scheduled to unveil the iPhone 15, in addition to the updated Apple Watches and AirPods, in a presentation on Tuesday.
Qualcomm, the world’s largest smartphone chip maker, has had a turbulent relationship with Apple over the years.
Apple has launched legal action against one of the core tenets of Qualcomm’s business model: charging licensing fees on patents that govern the basics of how wireless phone networks work. Apple eventually lost this battle and, like other major phone manufacturers, agreed to license Qualcomm’s technology. This arrangement will continue until 2025, with an option to extend it for a further two years.
Because wireless carriers around the world use a wide range of equipment and standards, it is difficult to design technology that works seamlessly. The modem chip should be able to quickly connect to older 3G and 4G networks, as well as more modern 5G systems. Since the advent of data-centric phones, Qualcomm has been a leader in this field.
Although the new contract runs until 2026, Apple could still start using its modem before then. The company plans to roll out the component gradually.
Qualcomm expects it will only have a 20% share of the business when the iPhone launches in 2026. However, the company used similar language in the original agreement, suggesting it may be a conservative forecast.
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2023-09-11 13:52:00
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