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Apple strikes 'multibillion-dollar' deal with Broadcom for 5G parts

Apple wants at least some of its in-house wireless tech made in the US.

Cherlynn Low/Engadget

Apple's long-expected switch to internally developed 5G modems is clearly moving forward. The iPhone maker has struck a "multibillion-dollar" deal that will have Broadcom develop components for 5G and other wireless connectivity. Some of the parts will be made in American facilities, including a key Broadcom manufacturing base in Fort Collins, Colorado.

The companies didn't say which products would use the 5G tech, but the arrangement isn't necessarily limited to the iPhone. Apple is believed to have started work on in-house 5G in 2020, a year after buying the majority of Intel's phone modem business. The company hasn't been shy about its plans, as it has recruited 5G developers and set up shop in Qualcomm's hometown of San Diego. It also established a wireless-focused office in Munich.

Rumors suggest Apple's 5G modems will first reach shipping products in late 2024 or early 2025. Neither Apple nor Broadcom has confirmed this, but Qualcomm told CNBC in March it assumes it won't provide iPhone modems in 2024.

This could be a significant blow to Qualcomm. While the company has diversified its chipmaking with in-car tech and low-power hardware, it's still heavily dependent on cellular modem sales and counts Apple as one of its largest customers. It will have to lean more on Android phone makers to bolster its bottom line. Qualcomm chips for Windows PCs have struggled to compete against x86-based equivalents.

Apple's anticipated move isn't surprising. The company has long tried to reduce its dependency on third parties, most notably switching to its own CPUs starting with the A4-based iPad in 2010. While Apple may need Broadcom's help, it won't be closely tied to Qualcomm's hardware release schedule — and might not risk expensive patent disputes, either. In theory, Apple could claim a technological edge by building 5G modems uniquely optimized for its devices.