(Reuters) – Qualcomm announced on Monday a new deal with Apple to supply 5G chips to the iPhone maker until at least 2026.
The San Diego, California-based firm is the top designer of modem chips that connect phones to mobile data networks. After settling a prolonged legal battle, Qualcomm previously signed a supply agreement with Apple in 2019.
This year, the chip supply agreement between Qualcomm and Apple is set to expire. As a result, the iPhones expected to be unveiled by Apple on Tuesday will be the last to debut under that existing agreement.
However, under the new deal announced on Monday, Qualcomm will continue to supply Apple with chips for their phones every year until 2026. While the exact value of the agreement was not disclosed, Qualcomm stated that the terms are “similar” to the previous deal.
In addition, Qualcomm confirmed that a patent licensing deal they signed with Apple in 2019 will remain in effect. This particular agreement will expire in 2025, but both companies have the option to extend it for an additional two years.
Meanwhile, Apple has been developing its own modem technology and acquired Intel’s modem unit for $1 billion in 2019. The timeline for Apple’s transition to using its own chips has not been announced.
Qualcomm projected that by 2026, only 20% of Apple’s iPhones will utilize their chips. However, it is worth noting that Qualcomm made a conservative projection regarding its business with Apple in 2021, which turned out to be incorrect as all iPhone 14 models released last year featured Qualcomm modems.
Stephen Nellis reported from San Francisco.
Editing by Miral Fahmy.
Credit: The Star : Tech Feed
