iPhone 5s logic board with Qualcomm baseband chipset. | Source: iFixit
In a Thursday morning note to investors, obtained by AppleInsider, JP Morgan analyst Rod Hall pointed to silicon firm Broadcom's recent struggle to produce an LTE modem of its own as evidence of the uphill battle awaiting Apple. Broadcom is one of the companies from which Apple has hired away a number of baseband hardware and software engineers in recent months.
Apple's choice to produce its own wireless modems would likely be motivated in part by a desire for increased power efficiency, Hall believes. Apple's current logic board designs utilize a baseband chip that is separate from the company's A-series application processors, and the company may be looking for ways to integrate the two chips into a single package.
Qualcomm, Apple's current baseband vendor, has done just that with its Snapdragon processors, and Hall believes the company would likely be open to a licensing arrangement that would allow Apple to integrate Qualcomm baseband IP on A-series cores. Such an arrangement would be beneficial to Qualcomm, as Apple is believed to have accounted for approximately one quarter of Qualcomm's 2012 revenues and losing that business would represent a significant financial hardship.
Despite the challenges, Hall believes that Apple has the ability and internal know-how to attract the talent necessary to successfully develop its own modem technology, as evidenced by the success of the A-series processors. Apple is thought to be at least one year ahead of Qualcomm on that front, thanks to the "desktop class" A7 chip that powers the iPhone 5s, iPad Air, and iPad mini with Retina display.