Apple, the world’s most valuable company has more than $166 billion in the bank and produces over $100 billion in annual free cash flow. The company has, for many years, also been working to develop its own modem chip, seemingly to no immediate avail.
Dan Gallagher for The Wall Street Journal:
[D]esigning the complex chips is apparently far easier said than done. Qualcomm, Apple’s current supplier of modem processors, said Monday morning that the two companies have extended their current chip-supply deal to cover iPhones launched from 2024-2026. That’s two years past the point when Qualcomm last told investors that its iPhone business would peter out, and three years beyond the company’s first projection for the end of that business when it laid out an ambitious plan in late 2021 to diversify away from smartphones…
Apple clearly wants to control more of its own destiny in that world, so will no doubt keep at its efforts to make an in-house modem chip. But Bernstein analyst Stacy Rasgon said Monday that “the longer it takes, the harder it is likely to be as cellular technologies do not stand still.” Everyone knows Apple’s pockets are deep; not so many seem to understand that Qualcomm’s competitive moat is too.
MacDailyNews Take: “Designing the complex chips is apparently far easier said than done,” unless you’re Huawei.
If this happened under Steve Jobs, the team would be publicly labeled as the failures they are and summarily dismissed, with a new, better, smarter, actually capable team rapidly assembled to do the job right. But, under Tim Cook, Apple’s modem team just keeps getting two more years every two years.
See also: Qualcomm to supply Apple with 5G modems through 2026 – September 11, 2023
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