As was rumored many months ago, Apple's silicon ambitions don't end with replacing Intel CPUs with their own on Macs. According to Johny Srouji, Apple's hardware technology leader, Qualcomm modems will be phased out in favor of its own chips designed specifically for iPhones.
Srouji confirmed the company's plans when speaking to staff during an internal town hall meeting, Bloomberg reported today. Apple took over Intel's 5G smartphone modem business last summer. This acquisition of Intel's intellectual property and resources was key to Apple's new endeavor.
Quoted in the Bloomberg story, Srouji told Apple employees:
This year we started developing our first in-house cellular modem, which will enable another important strategic transition. Long-term strategic investments like these are a critical part of activating our products and ensuring a comprehensive pipeline of innovative technologies for our future.
Apple introduced 5G modems in its iPhone 12 lineup for the first time this year, but the phones use Qualcomm modems. When Apple finishes its work on its own modems, the Qualcomm modems will likely be wiped out from most or all of the phones. Qualcomm shares lost value after the Bloomberg report was released.
However, the report notes that "a 2019 patent agreement between Apple and Qualcomm includes a six-year license agreement" and that "Qualcomm charges phone manufacturers license fees based on wireless patents, whether they use their chips or not."
In any event, this news is a confirmation of the suspicions that Apple's long-standing observers have had. As if the takeover of the Intel modem business weren't big enough, Apple visibly and publicly strengthened its employees in an office in San Diego, which is located near the Qualcomm offices there. As we discovered in Apple's interviews two years ago, the San Diego office appears to be pretty much designed to attract skilled engineers from Qualcomm and the smaller San Diego firms in its orbit to work on advanced technology.
In 2019, Apple confirmed plans to open a second large campus in San Diego. In addition, Apple has been listing numerous modem-related options on its job portal for several years. Today's report says Apple employees are working on the new modems in San Diego, Cupertino, and Europe.
It's not known when Apple might add these new modems to its phones, but we can easily speculate about what priorities it might be setting. Our iPhone 12 review (and the reviews in other publications) showed that the new iPhones are dramatically reducing battery life when browsing 5G. Apple can hope that it can produce more efficient alternatives that are more closely integrated with the other technologies of its phones in one possible focus.