Apple to keep Qualcomm chips in 2023 in turnabout

Qualcomm had planned to only provide about 20% of the 5G modem parts for the new iPhones in 2023, but now expects to retain its current foothold.

Qualcomm Inc. will continue to supply modem chips for the “vast majority” of iPhones in 2023, marking a turning point for a company that expected to lose business to Apple Inc.’s own components.

Qualcomm had only planned to ship about 20% of 5G modems for new iPhones in 2023, but now expects to maintain its current position, according to comments that accompanied its earnings report on Wednesday. The statement confirms that Apple will not be switching to its own modem design for next year’s models.

After settling its lawsuit with Qualcomm in 2019 and agreeing to use Qualcomm’s technology in the iPhone for the foreseeable future, Apple has begun building its own cellular modem, Bloomberg News reports. In 2020, Apple’s head of chip design told employees that development on this part was ongoing.

But earlier this year, Bloomberg News reported that Apple’s efforts were nullified by overheating modem prototypes and that the company won’t start the transition until 2024. Qualcomm still assumes that it will receive only minimal revenue from Apple in fiscal year 2025.

Apple did not immediately respond to a request for comment.

The delay didn’t comfort Qualcomm investors on Wednesday. The company is battling a broader downturn in smartphone demand and has released a much weaker-than-expected outlook. Shares fell as much as 8.4% at the end of trading.