On the evening of September 11, Qualcomm Technologies, the world's leading chip manufacturer, announced that it had reached a new agreement with the global technology giant Apple. According to the agreement, Qualcomm will provide Snapdragon 5G modem and radio frequency systems for Apple's smartphones in 2024, 2025 and 2026. This means that in the next three years, Apple’s iPhone, iPad and Apple Watch will continue to use Qualcomm’s 5G baseband chips.
The signing of this agreement further consolidates Qualcomm's leading position in 5G technology and products. Although the financial terms of the new agreement have not been disclosed to the public, Qualcomm said it is structurally similar to the previous agreement signed in 2019.
Apple's partnership with Qualcomm dates back to 2010. At that time, Apple used its self-developed A series processor for the first time in its iPhone 4 product, and also introduced Qualcomm's 3G/4G baseband products to gradually replace the previously used Infineon products. By 2011, Qualcomm became Apple’s exclusive supplier of iPhone basebands.
This cooperation model was very successful in the early days. The way Qualcomm charges Apple for patent licensing fees is that it takes about 5% of the selling price of each Apple iPhone device as patent licensing fees. As the prices of Apple devices continue to increase, Qualcomm's patent licensing fees have also increased from US$7.5 per device to US$12-20 per device. According to statistics, Apple pays Qualcomm nearly $10 billion in patent and chip sales fees every year.
However, this cooperation model has also encountered some challenges in recent years. In order to reduce its dependence on Qualcomm, Apple began to introduce Intel as a supplier of baseband chips in 2016. The implementation of this strategy allows Apple to gradually reduce its dependence on Qualcomm and find new supply chain partners.
Despite this, Qualcomm still holds a significant share of the smartphone processor market, according to recent data from Counterpoint Research. Mobile phone AP processor shipment data released by the agency on September 7 showed that in the second quarter of 2023, MediaTek’s chip market accounted for 30%, Qualcomm Snapdragon accounted for 29%, and Apple’s chips accounted for 19%. Rui accounted for 15%.
In general, despite the pressure of market competition and internal strategy adjustments, Qualcomm's cooperation with Apple has continued for more than ten years. Although Apple is looking for new supply chain partners to reduce its dependence on Qualcomm, Qualcomm's 5G technology is still highly competitive in the market. Therefore, although the details of future cooperation have not yet been announced, it can be expected that Qualcomm's Snapdragon 5G baseband chips will continue to play an important role in future Apple devices.
About Qualcomm：
Billions, maybe trillions of times a day we often do what many thought was impossible. That’s how often people around the world touch something made better by Qualcomm. It could be the smartphone in your pocket, the tablet on your coffee table, that wireless modem in your briefcase, it could even be that navigation system in your car or that action camera strapped to your chest.
Who is Qualcomm, and what do they do? They are engineers, scientists, and business strategists. They are from many different countries and speak many different languages. They come from diverse cultures and have unique perspectives. Together, they focus on a single goal—invent mobile technology breakthroughs. As the world’s industries evolve, so do the connections enabled through our wireless and computing solutions. By helping homes, cars, cities, education, wearables, and healthcare share more interactions and data across a variety of networks, we’re weaving the fabric of the Internet of Things so that entire industries can redefine what’s possible.
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