Apple will likely permanently end its long-running modem chip supply arrangement with Qualcomm in 2027, and the San Diego-based firm’s CEO is already attempting to dampen fears of how well his company will fare once one of its largest customers is no longer doing business with it.
As reported by 9to5Mac, Qualcomm CEO Cristiano Amon made an appearance on Yahoo Finance’s Opening Bid podcast. On the podcast, he downplayed the impending end of his company’s partnership with Apple, saying Qualcomm is already making plans on how to move forward.
“That’s our contract, you know, and if we don’t get a new contract, that’s what it is,” Amon said. “And there’s so much drama and association about the Apple relationship, which I think is not warranted, to be honest.”
Qualcomm has been Apple’s primary modem supplier for several years, and it is estimated that the deal is worth between $5.7 and $5.9 billion annually to the modem maker.
Apple’s agreement with Qualcomm runs through 2027, and Apple is preparing for that day by developing its own 5G modems in-house. Currently, Apple uses Qualcomm modems in all of its iPhones, except for its iPhone 16e, which uses Apple’s first sef-developed 5G modem.
Qualcomm expects its modems to be used in approximately 70% of Apple’s 2025 iPhones, plunging to 20% in 2026, falling to 0% with the 2027 iPhone lineup.
“We’re planning our business assuming that they are going to use their own modem,” he said. “And what’s exciting about the company is all of this growth that we’re creating… including on Android.”
Qualcomm doesn’t rely solely on modem chips for its business, and it recently announced a push into AI-powered server chips. Qualcomm will have a tough time breaking into the AI server chips field – as several other companies are already eyeing the AI server space, including Intel, ARM, and AMD. However, Amon believes that “there’s room for Qualcomm.”
“It’s a massive TAM and will continue to grow at very high growth rates for decades,” he said. “If we can build something unique and disruptive, there’s room for Qualcomm.”
Apple’s first custom modem chip, the C1, debuted in the iPhone 16e. Apple says the C1 is their most power-efficient cellular chip to date. However, the modem lacks support for ultra-fast mmWave 5G technology.
