Kuo: Apple’s 5G modem is not quite ready, Qualcomm will supply 5G chips for 2023 iPhones

Apple analyst Ming-Chi Kuo Tweeted an update about the state Apple’s 5G modem situation. Back in 2019, Apple acquired Intel’s modem business so that Apple could eventually begin producing its own 5G chips for iPhones.

Reports of Apple's development of 5G modem began in late-2020, but Kuo’s latest note reveals that Apple won’t be ready to transition to Apple 5G modem’s until 2024.

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[Company Update] Qualcomm (QCOM.O)

My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%).

— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) June 28, 2022

Kuo noted that Apple’s “5G modem chip development may have failed” and that Qualcomm will continue to be the sole supplier of 5G chips for Apple’s 2023 iPhones. Shortly after Kuo’s report came out, Qualcomm stock rose by over 3%. As per CNBC, Qualcomm previously expected to provide 20% of 5G modems for 2023 iPhones.

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2. I believe Apple will continue to develop its own 5G chips, but by the time Apple succeeds and can replace Qualcomm, Qualcomm's other new businesses should have grown enough to significantly offset the negative impacts caused by the order loss of iPhone 5G chips.

— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) June 28, 2022

Apple’s 5G modems are reportedly still under development. Kuo expects for Apple’s own chips to eventually replace Qualcomm’s 5G modems on new iPhones. By the time Apple is ready, Qualcomm is expected to have diversified and grown enough to offset the impact in revenue that it would face once Apple transitions away from Qualcomm modems.

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