Qualcomm says it will source Apple with 5G modems for iPhones via 2026

Qualcomm reported Monday that it will provide Apple with 5G modems for smartphones via 2026.

Wall Avenue analysts and Qualcomm officials had previously explained they anticipated Apple to use an internally created 5G modem setting up in 2024.

The continued revenue to Apple will raise Qualcomm’s handsets business enterprise, which claimed $5.26 billion in gross sales in the quarter ended in June, and could soften the blow of potentially losing a essential purchaser. About 21% of Qualcomm’s fiscal 2022 revenue of $44.2 billion came from Apple, in accordance to a UBS estimate.

Qualcomm at the moment supplies Apple with 5G modems for its iPhones, but Apple has been doing work to make its have modems to transfer away from Qualcomm chips. It acquired Intel‘s smartphone modem division in 2019 to develop its possess modem. Nonetheless, analysts have instructed that it will be challenging for Apple to shift absent from Qualcomm’s chips due to the fact of their complexity.

Qualcomm also helps make funds from Apple by means of cellular licensing service fees, which have been about $1.9 billion in 2022, in accordance to the UBS estimate.

Qualcomm proceeds to obtain royalties from Apple below a 6-year agreement, it claimed. That settlement was struck at the stop of a lawful battle among Apple and Qualcomm about royalties that was settled in 2019.

Qualcomm states that it expects to only provide 20% of the modems required for Apple’s 2026 smartphone start, signaling that it probably nonetheless expects the Apple business to at some point decrease. A Qualcomm official claimed the business was not updating its direction to just take in account the Apple revenue.

Apple is anticipated to announce new iPhones, probably known as Iphone 15, on Tuesday, which will use Qualcomm modems.

CNBC has reached out to Apple for comment and will update this tale appropriately.