Key Points
- Apple plans to launch its in-house modem with the iPhone SE by next spring. The iPhone SE will receive its first update since 2022.
- Apple aims to phase out Qualcomm’s modems by 2027 completely.
- Qualcomm shares fell 1.31% after the news, reflecting market concerns.
- Qualcomm has been diversifying its revenue streams, but analysts warn that this move could significantly affect its long-term profits.
Qualcomm Incorporated (NASDAQ:QCOM) shares dipped by approximately 1.31% or 2.10 to $158.29 following a Bloomberg report indicating that Apple Inc. (NASDAQ:AAPL) plans to introduce its in-house modem system by next spring. The debut will begin with the iPhone SE, marking the entry-level smartphone’s first update since 2022.
This development signals a strategic shift for Apple, which has relied on Qualcomm’s modem technology for years. According to sources cited in the report, the iPhone maker aims to roll out increasingly advanced chips progressively and plans to fully replace Qualcomm’s components by 2027.
Qualcomm, a leader in mobile connectivity solutions, has been preparing for such a shift by diversifying its revenue streams to reduce reliance on Apple. Analysts have previously warned that Apple’s move to in-house modems could considerably impact Qualcomm’s profitability in the coming years.
Last month, an analyst from President Capital Management highlighted the substantial financial risks Qualcomm faces should Apple successfully phase out its modems. This adds pressure on Qualcomm as Apple’s adoption of its own technology threatens a lucrative and longstanding partnership.
The transition reflects Apple’s broader strategy of bringing critical components in-house to gain greater control over its supply chain and reduce dependency on external suppliers. For Qualcomm, the anticipated rollout raises questions about its future role in a market increasingly defined by vertical integration.
