Apple Inc has started building its own cellular modem for future devices, a move that would replace components from Qualcomm Inc, the company’s top chip executive told staff on Thursday.
Apple senior vice president of hardware technologies Johny Srouji made the disclosure in a town hall meeting with company employees, according to people familiar with the comments.
“This year, we kicked off the development of our first internal cellular modem, which will enable another key strategic transition,” he said. “Long-term strategic investments like these are a critical part of enabling our products and making sure we have a rich pipeline of innovative technologies for our future.”
A cellular modem is one of the most important parts of a smartphone, enabling phone calls and connection to the Internet via cellular networks.
Srouji said the US$1 billion acquisition of Intel Corp’s modem business last year helped Apple build a team of hardware and software engineers to develop its own cellular modem.
He said the modem is one of a few wireless chips the company designs, including the W-series in the Apple Watch and the U1 ultrawide-band chip in the iPhone for precise location information.
The latest iPhones with 5G use parts from Qualcomm.
Before that, Apple used Intel parts for a few years and then purchased that business unit from the chipmaker.
Srouji did not say when the cellular modem would be ready to ship in products, but a patent agreement last year between Apple and Qualcomm includes a six-year licensing pact.
Qualcomm charges license fees to phone makers based on wireless patents it owns, regardless of whether they use its chips or not.
In the meeting with employees, Srouji also highlighted Apple’s other work on chips, including the new M1 processors in the latest MacBook Air, MacBook Pro and Mac mini.
Apple is working on a “family” of Mac chips, Srouji said.
Apple is planning upgrades that are designed to improve on Intel’s fastest computer chips, Bloomberg News reported earlier this week.
Apple has been hiring engineers from Qualcomm for years to help it build the modem, and has offices focused on the effort in San Diego, at its Cupertino, California headquarters and in Europe.
The move extends Apple’s push toward greater reliance on its own parts at the expense of Qualcomm, Intel and others.
Qualcomm gets about 11 percent of its revenue from Apple, while Intel gets about 7 percent of sales from the iPhone maker, according to data compiled by Bloomberg.
Apple started shipping its own chips in 2010, with the A4 main processor in the iPhone 4 and original iPad.
Since then, it has expanded this work to custom camera processors, chips to handle artificial intelligence tasks and collect motion data, along with chips for Apple Watches, Apple TVs and headphones.
The Mac processors are some of Apple’s most ambitious chip designs to date. Cellular modem development is also challenging.
Separately, Apple CEO Tim Cook shared new details on the company’s plan to return to the office during a virtual town hall meeting with employees on Thursday.
Cook said it “seems likely” that the majority of teams would not be back before June next year.
Apple has historically had an office-centric culture, but the CEO implied that the company’s success this year during the pandemic lockdown could enable more flexibility to work remotely in the future.
Still, Cook has been adamant publicly about his desire for staff to ultimately return to the office.
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