Apple and Broadcom have agreed to extend their partnership through 2031. The deal has been expanded to cover the development and supply of a wide range of custom chips. This likely means that Apple won’t be using its fully customized modem on all of its products until at least 2031.
These two companies have been working together for years; Apple is actually one of Broadcom’s largest customers, and is believed to account for nearly 20% of its annual revenue.
Apple has been working on its own chip design in-house with its C1 and C1X cellular modems, but many of Broadcom’s wireless connectivity and radio frequency components remain in use. Broadcom uses custom radio frequency components, WiFi and Bluetooth connectivity, and other networking semiconductors found throughout Apple’s lineup.
With this news, Broadcom’s stock rose over 5%, and Apple’s rose almost 1%.
The Android Headlines Take
While Apple is looking to get away from Qualcomm, it still needs Broadcom for its modems and other chips that are used in its products. Qualcomm is still the major supplier of Apple’s iPhone modem; however, with only the iPhone 16e, 17e, and Air using Apple’s custom cellular modem. This has shown that it can compete with Qualcomm in some areas. But where Apple really has a leg up over Qualcomm is with the efficiency.
Apple may never be able to fully build its own modems on its own without help from Broadcom. But it is definitely something Apple is looking to do in the future. This deal with Broadcom is quite large, considering how much of their revenue Apple is responsible for. In fact, they signed a multi-billion dollar deal in 2023, which covered 5G radio frequency components manufactured in the US.
Why does Apple want to get rid of Qualcomm? It mostly comes down to price. You see, Qualcomm doesn’t just sell you components; it also charges you royalties to use them. Something Apple doesn’t believe in, and even went to court to fight, a few years back.
The post Apple and Broadcom Just Locked In a Partnership That Goes All the Way to 2031 appeared first on Android Headlines.
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