The big picture: Apple has extended its modem supply agreement with Qualcomm, signaling to the industry that its in-house modem is still years away from being production ready. For now, it is neither here nor there. Apple is set to unveil its iPhone 15 line during a media event on September 12. All of those phones will ship with Qualcomm 5G modems under the hood as originally planned.
The Cupertino tech giant purchased Intel's 5G modem business for $1 billion in 2019. With the acquisition, Apple was on track to take control of yet another part of its mobile business and further reduce reliance on third party suppliers. The deal was finalized before the calendar turned to 2020 yet as we approach the end of 2023, there is still no public facing product to show for it.
Last year, it was reported that overheating prototypes had significantly slowed the program's progress. Apple Analyst Ming-Chi Kuo even suggested the initiative may have failed entirely.
Is Apple failing at modems?
Qualcomm in announcing the new agreement said it will now supply Snapdragon 5G Modem systems for Apple smartphone launches in 2024, 2025, and 2026. That means Apple now has until 2027 to get all the kinks ironed out. If they can't turn out a successful modem design by then – that would be seven years on the project, maybe longer – then it might be best to write the whole thing off as a loss and move on.
Of course, that is the worst case scenario. The extended agreement simply gives Apple more time to work on its own modem, which they could introduce on a smaller scale in select products over the next year or two as sort of a public test run before transitioning to using their in-house modem exclusively. In addition to reducing its reliance on a third party supplier, having full control over the modem chip paves the way for additional efficiencies that could lead to better battery life and improved performance.