Qualcomm and Apple Reach Agreement For 5G Chip Supply For iPhones Until 2026
(Reuters) – Qualcomm said on Monday it had signed a new deal with Apple to supply the iPhone maker with 5G chips until at least 2026. Qualcomm, whose shares rose more than 8% in premarket trading, is a leading designer of well-known products. as modem chips that connect phones to mobile data networks.
The San Diego, California-based company previously signed a supply agreement with Apple in 2019 after the companies ended a protracted legal battle.
The chip supply contract expires this year, meaning the iPhones expected to be announced by Apple on Tuesday will be the last phones to debut under that contract.
Under the deal announced Monday, Qualcomm said it will supply Apple with chips for phones that will be released annually until 2026. Qualcomm did not disclose the value of the deal, saying only that the terms are “similar” to its previous agreement.
Qualcomm also said that the patent license agreement it signed with Apple in 2019 is still in effect. The agreement ends in 2025, but the companies have the option to extend it for two years.
Apple is developing its own modem technology and spent $1 billion to buy Intel’s modem unit in 2019. Apple has not said how quickly it plans to increase the use of its own chips.
Qualcomm said Tuesday that its financial projections assume that only a fifth of Apple’s iPhones will use its chips by 2026. However, Qualcomm made a similar prediction for its business with Apple in 2021, which turned out to be too conservative with the iPhone 14 models. released last year all with Qualcomm modems.
