Johny Srouji, Apple’s senior vice president of hardware technologies, said in a town hall meeting for Apple employees that the company has begun efforts to create its own cellular modem (via Bloomberg).
Modems are a big business and Qualcomm controls most of the market with its patents. Apple made a licensing agreement with Qualcomm to use its modems for six years. But Qualcomm charges licensing fees even if the chips aren’t actually used.
This year, we kicked off the development of our first internal cellular modem which will enable another key strategic transition. Long-term strategic investments like these are a critical part of enabling our products and making sure we have a rich pipeline of innovative technologies for our future.
Apple making its own modems is the latest move for it to be completely self-reliant, following the release of chips like the M1 for Macs. In 2019, Apple acquired Intel’s modem business and its team of engineers to integrate with its own efforts. Qualcomm shares dropped 4.4% at 9:37 a.m. in New York on Thursday, after Bloomberg’s report was published.