Apple is working hard to expand its services as well as to offer new products to customers all over the world. However, the Cupertino-based tech giant wants to become less dependent on other companies. For example, it replaced the Intel processors in its MacBook Air, MacBook Pro as well as Mac Mini with its own homegrown ARM chips. Moreover, the company plans to take another step forward in the future.
It is worth noting that, the company is already working on a cellular modem, which will enable another strategic transition. As a reminder, Apple bought Intel’s smartphone modem business in 2019, which strongly suggested it was only a matter of time before Apple used that purchase t develop its own chips.
However, it won’t be easy to replace Qualcomm. The company has a tremendous amount of intellectual property around the cellular that it licenses to companies like Apple. Interestingly, the company is no stranger to lawsuits. However, recently Qualcomm won an antitrust suit against the Federal Trade Commission. Importantly, Apple reached a surprise settlement with Qualcomm regarding patent infringement.
Moreover, they reached a multi-year deal around companies’ wireless IP. The Cupertino-based company will pay $4.5 billion to Qualcomm. It makes sense as Apple needed Qualcomm chips to build this year’s 5G iPhones.
Apple and new opportunities
It is worth noting that, with its own cellular radios, the tech giant could at least be less reliant on Qualcomm. This is not the end of the story, as in the best scenario, it could build a better performing radio and offer better battery life, as it did with its own ARM chips vs. Intel.
Apple has the potential to become less dependent on other companies. Moreover, management is ready to spend money to reach this goal. As can be seen from the example stated above, the company knows how to reduce its reliance on other companies. The Cupertino-based company is willing to take decisive steps when it comes to developing its products and services.
It makes sense to develop its own cellular modem for several reasons. The company will be able to reduce costs by developing its own cellular modem in the long run. Moreover, Apple will be able to spend less time and energy on negotiations, as sometimes it is quite hard to reach an agreement with suppliers. Last but not least, Apple will make money by producing its own ARM chips as well as other components.
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