As per the report, Apple will stick to the Qualcomm 5G modems for its iPhones until March 2027. The upcoming iPhone SE 4, which will feature a custom modem from Apple in 2023, should drive some shipments, but this model is designed to be an entry-level device.
That setup works just fine for Qualcomm and helps to ensure it will see some pretty decent revenue throughout 2024 as Apple ships hundreds of millions of iPhone 16 units. View our rough calculation of just how much Qualcomm might make off a given-unit shipment of iPhone 16 sales, to match Apple’s initial target for the year.
More About Qualcomm Revenue from Apple
A teardown from earlier today goes to show that, in fact, all iPhone 16 series models ship with the SDX71M 5G modem. Those numbers could shift in the months to come, but heading into Apple’s official September unveiling of the iPhone 16, it was expected to ship 90 million units next year. That goal is 10 points higher than that which the iPhone 15 lineup of last year, signalizing a potentially nice payout for Qualcomm if all goes according to plan. TD Cowen broke down the production costs, and said that $32 would be added on to the cost of building an iPhone 16 Pro Max than what Apple had budgeted for the iPhone 15 Pro Max.
Looking at the ‘Modem + Transceiver’ part, Apple would pay $28 per unit from Broadcom. If Apple achieves its target of 90 million shipments, Qualcomm could make somewhere in the neighborhood of $2.52 billion from 5G modem sales. This number, however, does not take into account the wide array of 5G modem patents that Qualcomm owns–and which give it more markets to earn licensing fees from Apple. That $2.52 billion is a big number, but it’s probably just a sliver of the amount Qualcomm raked in from these modem sales.
Of course, this is just a guesstimate based on what we know and Qualcomm’s total revenue from iPhone 16 5G modem sales could end up being much larger depending on the precise terms of its deal with Apple. In summary, while the estimated amount should be approached cautiously, it is crucial to recognize Apple’s ongoing efforts to gradually reduce its reliance on Qualcomm, despite the custom 5G modem potentially offering no improvements to user experience and possibly being slower than its counterpart.
FAQs
When will Apple stop using Qualcomm’s 5G modems?
Apple is expected to continue using Qualcomm’s 5G modems until March 2027.
What is the shipment target for the iPhone 16 in 2024?
Apple aims to ship 90 million units of the iPhone 16 in 2024, which is a 10% increase compared to the previous year’s iPhone 15 lineup.
