Apple’s Custom Modem Ambitions Threaten Qualcomm’s Multi-Billion Dollar Revenue, But The Chipmaker Focuses On Expanding Into Automotive, IoT, And Other Emerging Markets

Apple has already planned its breakup with Qualcomm over its custom modems, as the contract between the two companies is expected to expire in March 2027. Even though Apple’s C1 chip received positive reviews and beat Qualcomm-based modems in real-world tests, the latter has already started planning its business route. In a new interview, Qualcomm’s CEO downplays the importance of Apple after it debuted its custom C-series modem.

Qualcomm CEO downplays Apple breakup, emphasizes other growth opportunities as 2027 partnership ends

We already know that Apple moving to its custom modem business would hurt Qualcomm’s earnings, as there are hundreds of millions of iPhones sold every year, and each one houses a modem made by Qualcomm. Since Apple has already launched the iPhone 16e with its custom C1 modem, the likelihood that it will replace all Qualcomm modems is a no-brainer. It is believed that Apple will end its contract with Qualcomm in early 2027, which means that all devices launched after that time frame will house a custom-made connectivity chip.

In an interview with Yahoo Finance’s Opening Bid podcast, Qualcomm’s CEO claims that the company is already well prepared to look beyond the iPhone. What this means is that the company is exploring new niches and ideas, which will allow it to mitigate the losses incurred by the lack of business from Apple. The CEO explains:

“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.”

We have to take note that Qualcomm has been a long-standing Apple supplier of modems, gathering an annual revenue of $5.7 to $5.9 billion. The supplier also claims that it is expecting 70 percent of iPhones to feature its custom modems this year, which will drop to 20 percent next year and hit a dead end by 2027. Beyond Apple and iPhones, Qualcomm is exploring the likes of automotive, IoT, as well as AI-powered server chips to compete against the likes of Nvidia’s GPUs.

Qualcomm is under the impression that Apple will not use its modems in the long run, and it is factual at this point, considering the company has already started working on a next-gen C2 modem, which will deliver enhanced connectivity, even better than its first-gen product with its surprising results. The C1 modem is also reported to be part of Apple’s ultra-thin iPhone 17 Air, which will launch later this year in September. Apple is also working on MacBooks equipped with its custom modem, but details on the product remain scarce at this stage. It remains to be seen how much business Qualcomm will lose when Apple becomes self-sufficient in the coming years.