Apple Inc. has begun developing its own smartphone modem for upcoming smartphones, a development that will substitute Qualcomm Inc. parts, Apple’s top chip manager told workers on Thursday.

Photo Credit: Apple

As per individuals familiar with the remarks, Johny Srouji, Apple’s senior vice president of hardware technology, made the announcement in a town hall event with Apple workers. At 9:37 a.m., Qualcomm shares fall 4.4 percent in New York.

“We began developing our first internal phone modem this year that will enable for the next major strategic shift,” he said. “Long-term strategic investments such as these are a key component of supporting our products and ensuring that we have a rich pipeline of innovative technologies for our future.”Among the most essential aspects of a phone is a mobile modem, allowing calls and texts and access to the internet through mobile networks.

Srouji has said $1 billion purchase of Intel Corp.’s modem company in 2019 enabled Apple to grow its very own cellular modem by creating a team of software and hardware engineers. He has said modem has been one of a few cellular chips developed by the company, along with the Apple Watch W-series as well as the iPhone U1 ultrawide-band chip for accurate location data.

The new iPhones with 5G utilize Qualcomm components. Prior to actually that for a couple of years, Apple utilized Intel parts and later acquired the chipmaker business unit.

Srouji also outlined Apple’s various progress on chips throughout the discussion with staff, such as the updated M1 processors in the newest MacBook Air, MacBook Pro, and Mac mini. Srouji says Apple is focusing on a “family” of Mac chips. Bloomberg News released earlier in the week that Apple is working on improvements intended to boost Intel’s best computer chips.

For a long time, Apple has hired Qualcomm engineers to assist it to develop the modem, and also has offices based on the project in San Diego, at its headquarters in Cupertino, California, in Europe.

At the cost of Qualcomm, Intel, and others the step expands Apple’s drive toward growing dependence on its own components. As per data gathered by Bloomberg, Qualcomm derives about 11 percent of its revenue via Apple, whereas Intel receives about 7 percent of revenues from the iPhone manufacturer.

Expected launch of Apple modem:

Srouji did not specify is when the mobile modem will be able to launch in devices, but a six-year license deal is included in a 2019 patent deal among Apple and Qualcomm. Qualcomm charges telecommunications producers licensing fees depending on the cellular patents it holds, irrespective of whether or not they are using its chips.

 

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