Qualcomm Technologies announced today that it agreed with Apple to supply Snapdragon 5G Modem‑RF Systems for smartphone launches in 2024, 2025, and 2026. And the company said that this agreement reinforces Qualcomm’s track record of sustained leadership across 5G technologies and products.
Qualcomm is the leading modem chip designer that links phones to mobile data networks. And Qualcomm previously signed a chip deal with Apple in 2019 as part of a legal settlement. This supply agreement was supposed to end this year.
The legal battle between Apple and Qualcomm started back in 2017. Apple had accused Qualcomm of charging too much for its patented iPhone technology. Qualcomm sued Apple in response and alleged that Apple was trying to renege on an agreement to pay less than what was agreed upon for its patented technology. Plus, Qualcomm accused Apple of using the legal system as a way to pay less.
The value of the deal was undisclosed. But the terms are believed to be similar to the previous agreement. Earlier this month, UBS estimated that Qualcomm sold over $7.2 billion of chips to Apple last year.
Apple has been dealing with several challenging issues. This includes the Chinese government banning officials and state employees from using iPhones. Apple has been working on diversifying its supply chains beyond Chinese. And developing modem technology at a massive scale is a significant challenge, which is why the plans are being delayed. Apple bought Intel’s modem operations in 2019 for a reported $1 billion to develop its mobile data network chip technology.
Qualcomm is expecting to supply just 20% of the modems that Apple needs for its modems in 2026. This means that Qualcomm will see a decline in business from Apple as the goal to develop its modem chips continues.
