11/06 Update below. This post was originally published on November 3rd
Hot tipped iPhone 15 upgrades are fall like fliesand now one of the biggest looks is sure to miss the cut.
Apple’s much-hyped 5G internal modem will no longer debut with the release of the iPhone 15 series in 2023, and it represents a major setback for Apple’s modem division. The news came after comments from Apple modem supplier Qualcomm in its earnings report yesterday.
Apple iPhone 15 Pro Max / Ultra Concept
Picked up by BloombergQualcomm told investors it will continue to supply the “vast majority” of Apple’s iPhone 15 series modem chips in 2023. The company previously said it expected it would ship just 20% of iPhone 5G modems by then, given the ambitious step-by-step plan for its own 5G modems.
Update of 11/04: I can now confirm the Qualcomm comments reported by Bloomberg, which in turn confirm that Apple’s modem ambitions are being delayed for at least a new iPhone generation.
Update 11/05: The same source has now added more details to Qualcomm’s comments, claiming that the company expects to continue to supply Apple with modems for iPhone models for at least the next three generations.
The source also says Qualcomm doesn’t expect Apple to replace Qualcomm modems all at once, instead rolling out in increasing percentages with each successive iPhone generation. It makes perfect sense. The company has also tried this model before.
Apple was already looking to diversify its modem suppliers when it started integrating Intel modems into iPhones with the iPhone 11. Performance issues cut the experiment short, but Apple was motivated enough to buy Intel’s smartphone modem division in 2019 to start using the chips itself.
Since then, the lack of a commercial product has shown that competing with Qualcomm is no small feat. That said, the potential gains for Apple are twofold. First, it gains more control over its supply chain. Second, it can integrate internal modems earlier in the design process, potentially unlocking better performance and battery efficiency.
As such, although delayed, I don’t see Apple dropping its modem ambitions anytime soon.
11/06 Update: Following on from his initial report, Bloomberg’s Mark Gurman has added more detail to Qualcomm’s claims that it will continue to ship the “vast majority” of iPhone 5G modems into 2023. Gurman goes a step further and explains:
Qualcomm now believes it will ship most of Apple’s modems by 2023. The company even suggested it could do so until 2025. That means Qualcomm will continue to get a solid revenue stream from Apple’s large iPhone volumes. It also suggests that Apple’s internal initiative is lagging behind.”
This jump to three years ties in with the information my source provided yesterday. It’s also important to note that “until 2025” does not mean Apple will acquire Qualcomm at that point. On the contrary, in 2025 Apple may be able to fulfill a significant portion, possibly the majority, of iPhone modems by 2025, but Qualcomm will still be closely involved.
By extension, 2026 now appears to be the earliest we can expect to see iPhone modems manufactured entirely in-house, and the benefits of that integration being felt. After all, even if Apple can deliver big benefits sooner, the company can’t provide iPhones with different performance levels after the 2016 debacleso Apple modems are on the line.
Needless to say, timelines can change quickly if you look that far into the future. That said, I can’t cite a previous example of Apple making such a sizeable acquisition and having to wait so long to bring the product to market.
As it stands, the 2019 Intel modem division purchase will not bear fruit for 6-7 years. I’m sure Apple didn’t expect that at the time.
Despite work on the chip since 2020, Bloomberg reveals that Apple has suffered significant setbacks, which caused the delay. In July, it reported that prototypes had “overheated” for the past year.
Respected industry analyst Ming-Chi Kuo went even further, saying that the modem’s development “maybe failedclaiming that Apple may need to rely on Qualcomm in the near future. Last month, Haitong International Securities analyst Jeff Pu agreed, stating that Apple’s modem miss iPhone launches in both 2023 and 2024.
Intel 5G modem
But this is the first time we’ve heard from an Apple partner, and Qualcomm’s announcement adds significant weight to these pessimistic forecasts. Such a slowdown would have been unimaginable when Apple bought Intel’s 5G modem business for $1 billion in 2019. Intel already supplied smartphone modems and Apple used them in the iPhone 11 series.
As such, it is difficult to understand why the project has proved so challenging. Apple is known for its tight integration of components, so if I were to take a guess, I’m guessing problems started here.
On the other hand, Qualcomm’s next-gen 5G modems are extremely impressive, and early leaks suggest there’s still a lot to like about Apple’s iPhone 15 plans. Including redesigned standard models and an all-new iPhone 15 Ultra with titanium chassis and dual front cameras. USB-C is also hot tipped, but far from sure.
Either way, Apple seems determined to make a splash in 2023 after that disappointing sales of the iPhone 14 and iPhone 14 Plus.
