The News: Qualcomm Technologies, Inc., announced that it has entered into an agreement with Apple Inc. to supply Snapdragon 5G modem‑RF systems for smartphone launches in 2024, 2025, and 2026. The agreement was made public just ahead of Apple’s September 2023 event. Read the full Press Release on the Qualcomm website.
Qualcomm Supplying Apple With Snapdragon 5G Modem-RF Systems Into 2026
Analyst Take: Qualcomm’s announcement that it will continue to supply Snapdragon 5G modem-RF systems to Apple for iPhone launches at least into 2026 should come as no surprise to industry insiders and technology observers who understand how difficult 5G modems are to develop, design, and bring to market, let alone quickly. Although Apple has defied industry expectations with the success and rapid pace of its M1 and M2 chip development, 5G modems fall into a very different level of complexity and performance, and the learning curve is steeper.
It is important to remember that market-leading 5G and 5G modem-RF systems are core elements of Qualcomm’s business. I would venture to say that no other company in the world does 5G modems better than Qualcomm. Apple, in contrast, despite its might, tremendous resources, and bits of Intel’s old 5G modem business giving it a boost, has years of catching up to do, and should therefore not be expected to magically come out with an equivalent 5G modem-RF system so quickly after the start of its development journey.
That is not to say that it will take Apple decades to develop a 5G modem. I expect that Apple could potentially have a working 5G modem inside of the next 5 years, but 5G is hard. It takes time to do it right. Even chip giant Intel, which once supplied Apple with some of the cellular modems used in its devices, struggled with 5G.
All of this is to say that the announcement should not be interpreted as any kind of failure by Apple at this juncture. It is going to take time, and the market should adjust its expectations based on the reality of the challenge taken on by Apple rather than on wishful or magical thinking.
Overall, I view the agreement between Apple and Qualcomm as a win-win-win. For starters, iPhone users will continue to benefit from the quality, reliability, speed, and performance of Snapdragon modem-RF systems in their iPhones until at least 2026. Second, for Apple, a partnership with Qualcomm translates into a no-stress, low-risk, high-reward relationship, with access to the best 5G modem-RF technology, IP, and expertise in the industry. Third, this news is great for Qualcomm, whose 5G modem-RF pipeline just benefited from a media-friendly confidence boost with the confirmation that its multi-year agreement with Apple remains on solid ground into 2026. (You may remember that Apple and Qualcomm entered into a 6-year direct licensing agreement in 2019, with a 2-year extension option.)
Even though Qualcomm’s expansion into lucrative verticals such as automotive, extended reality (XR), PCs, sound, IoT, and networking have already begun to make the company far less dependent on smartphones than it once was, the confirmation that its multi-year deal with Apple will remain unchanged for the foreseeable future is great news, especially given Apple’s enviable handset market share, particularly in the US market.
The announcement also comes at an opportune time, as geopolitical pressures ranging from drought US-China relations and inflationary pressures to lingering post-COVID supply chain and inventory ripples continue to disrupt the handset market. Both Qualcomm and Apple should benefit from the kind of multi-year stability, predictability, and assurance that this announcement predicates.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
Qualcomm Revenue in Q3 Dips to $8.44 Billion as Mobile, IoT Soften
Qualcomm Sparks the Next Phase of 5G With the World’s First 5G Advanced-Ready Modem-RF System
Author Information
Olivier Blanchard is Research Director, Intelligent Devices. He covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
