If true this is a huge win for Qualcomm, small loss for apple.
Huh? Explain. Qualcomm's discrete modem sales to Apple is a fraction of their overall business. Wasn't Apple's agreement with Qualcomm $4.5 billion over 6 years? Less than $1 billion a year for a company that had $36 billion in revenue in 2021.
$4.5b was for patent licensing, the chip sales are separate. The following site estimates Apple makes up 20% of Qualcomm's revenue:
Apple sells around 250 million iOS devices per year. If they are paying Qualcomm somewhere in the region of $40 per device for 5G, that's closer to $10b/year. It says here, Qualcomm 2021 revenue was $33b:
"A small number of customers/licensees historically have accounted for a significant portion of our consolidated revenues. In fiscal 2021, revenues from Apple, Samsung and Xiaomi each comprised 10% or more of our consolidated revenues."
Apple has to buy the chips from somewhere or build them. Every route would have a similar cost and no matter which route they take, they pass the cost to the consumer. Qualcomm would lose a significant amount of their revenue if they lost Apple as a client.
Do they need a special block for that? Once you take analogue out it seems a lot of the signal processing could happen in GPU. If they can make that work an Ax could be just the Mx Soc with the extra cores dedicated to being soft modem.
If you’ve nothing better for the GPU to do, probably. But they need to exact top performance from the GPU to be competitive at the high end, support gaming, etc., so stealing cycles from the GPU would not make sense. Plus a lot if this is not signal processing, it’s protocol handling. It’s a highly specialised real-time activity.
If Apple can make 10's of millions instead a couple of million M2s bin them out they could call some of them A16 with Cellular. depending on binning that would be up to 5 GPU cores and 2 CPU performance cores that could be dedicated to cellular processing without impacting other processing at all. Might be some advantageous as cellular would have hybrid memory attachment could bundle received information for things like notifications in to the right place without troubling the core system.
If they can do it with 4 GPU the iPhone Pro could bump up to 6core GPU cores non-pro iPhones stay at 4core.
Last I remember, there were some patent issues after Qualcomm bought a bunch.
Apple will succeed in launching a new, superior modem and it will be a gigantic hit to Qualcomm revenues. Apple will use their own modems in all iPhone, iPads, apple watches, AR devices and posssibly even Macs.
The iPhone is a HUGE market, iPad is significant, Mac is huge, and Apple Watch is pretty big as well.
That’s a lot of revenue to lose and Qualcomm will wish they didn’t try to gouge apple a few years ago.
Short term thinking sometimes wins out in the short term, not so much in the long.
I doubt that other, silicon capable OEMs like Samsung and future Microsoft don’t have similar plans.
I don't think it will be a huge hit and QC will get its patent dues all the same.
All QC will really 'lose' is a business it never really had anyway (while they and Apple were dishing it out in court) as Apple was sourcing from Intel.
Also, as 5G enters the IoT realm, QC will sweep a lot of that business up along with Huawei, Mediatek, Samsung...
Apple is unlikely to shift anything like the numbers its competitors will as I doubt they will offer up their product to third parties.
I also doubt it's first generation product will be at the same level as the competition.
Considering they have apples business now, they definitely stand to lose big.
Apple may be looking to future standards as well - something that Qualcomm may need to pay royalties on. 5g has been going for a bit now. It won’t last forever.
They won't lose big because they never counted on having that business.
Apple's 5G road map was with Intel.
QC simply saw a business opportunity and negotiated that extra contract. Things will simply fall back to where they were prior to Intel failing. If Apple does not deliver in 2023, QC may even retain some of its Apple contracting.
Either way, Apple's business with QC is simply a plus for them. Losing Apple will not knock a huge hole into their business.
Apple may be looking to future standards and buying Intel's modem business bought them a lot of 5G patents but 6G won't be here until around 2030 and 5.5G will come before that.
6G development is already underway but consumer facing modems are just a tiny part of ICT technology. Apple has no experience in the field so expect the established players to pull most of the strings on that front.
That isn't to say it would be a bad idea to break into that market but look how much they screwed up on 5G. Something that started taking shape in 2009. Apple just isn't the kind of company that plans that far ahead and on such a wide scale.
It's a CE company with zero experience in critical infrastructure.
I understand the fear of Wall Street wising up to how big of a blow it will be once Apple launches their own modem - especially if you own Qualcomm stock - but this is real. Qualcomm getting Apple business is not only a huge revenue source, but business that they clearly count on having. It’s not a “hobby.” It’s reliable and recurring billions.
Kuo seems to indicate that apple’s continued development instead of launch is a life saver for Qualcomm and that it buys them time to offset the major financial crush from losing Apple.
Apple is likely in the early to mid stages of R&D on this - especially with the need to develop around competitor patent acquisitions), so Qualcomm has some years left to milk the situation. But, the day is coming just as the years of phone rumors and SOC rumors came to fruition - especially since Apple has a head start from acquiring Intel’s modem business.
The great news for Qualcomm is that their modems are pretty good and they have apple’s business for a while. The board is no doubt using some of this incoming to develop better modem using future standards as well as to survive the coming red ocean once Apple (and likely others) pull the plug on such large recurring revenue feeds.
Typical Kuo story: unconfirmed delay to an unconfirmed timeline.
Exactly. What better way to generate clicks than to put “Apple” & “fail” in the same sentence? It’s straight out of the Forbes playbook. And what better way to claim said failure than to help create the very rumor of a fictional deadline that wasn’t ever meant to be met?
My guess is that Apple found, and plugged, the leakers that Kuo relied upon as his sources. This new side hustle on Twitter is just his desperate attempt to remain relevant.
Pretty much this. Most people are guaranteed to focus on the straw man rather than wonder how or why it exists and the motivations of who put it there.
If true this is a huge win for Qualcomm, small loss for apple.
Huh? Explain. Qualcomm's discrete modem sales to Apple is a fraction of their overall business. Wasn't Apple's agreement with Qualcomm $4.5 billion over 6 years? Less than $1 billion a year for a company that had $36 billion in revenue in 2021. This is even sillier than the people who claim that losing Apple's business will cripple Intel when A. Apple is only the #4 PC maker behind Lenovo, Dell and HP and in 2020 was actually #5 behind Acer and not much far ahead of ASUS and B. the clear majority of CPUs Intel sold to Apple were the cheap Core i3 ones for the entry level MacBook Air and Mac Mini.
And Google paying Apple 10-15 billion per year for a default position on iOS, Intel long term problem is no in house OS to go with in house hardware equals no can do.
Last I remember, there were some patent issues after Qualcomm bought a bunch.
Apple will succeed in launching a new, superior modem and it will be a gigantic hit to Qualcomm revenues. Apple will use their own modems in all iPhone, iPads, apple watches, AR devices and posssibly even Macs.
The iPhone is a HUGE market, iPad is significant, Mac is huge, and Apple Watch is pretty big as well.
That’s a lot of revenue to lose and Qualcomm will wish they didn’t try to gouge apple a few years ago.
Short term thinking sometimes wins out in the short term, not so much in the long.
I doubt that other, silicon capable OEMs like Samsung and future Microsoft don’t have similar plans.
I don't think it will be a huge hit and QC will get its patent dues all the same.
All QC will really 'lose' is a business it never really had anyway (while they and Apple were dishing it out in court) as Apple was sourcing from Intel.
Also, as 5G enters the IoT realm, QC will sweep a lot of that business up along with Huawei, Mediatek, Samsung...
Apple is unlikely to shift anything like the numbers its competitors will as I doubt they will offer up their product to third parties.
I also doubt it's first generation product will be at the same level as the competition.
Considering they have apples business now, they definitely stand to lose big.
Apple may be looking to future standards as well - something that Qualcomm may need to pay royalties on. 5g has been going for a bit now. It won’t last forever.
They won't lose big because they never counted on having that business.
Apple's 5G road map was with Intel.
QC simply saw a business opportunity and negotiated that extra contract. Things will simply fall back to where they were prior to Intel failing. If Apple does not deliver in 2023, QC may even retain some of its Apple contracting.
Either way, Apple's business with QC is simply a plus for them. Losing Apple will not knock a huge hole into their business.
Apple may be looking to future standards and buying Intel's modem business bought them a lot of 5G patents but 6G won't be here until around 2030 and 5.5G will come before that.
6G development is already underway but consumer facing modems are just a tiny part of ICT technology. Apple has no experience in the field so expect the established players to pull most of the strings on that front.
That isn't to say it would be a bad idea to break into that market but look how much they screwed up on 5G. Something that started taking shape in 2009. Apple just isn't the kind of company that plans that far ahead and on such a wide scale.
It's a CE company with zero experience in critical infrastructure.
I understand the fear of Wall Street wising up to how big of a blow it will be once Apple launches their own modem - especially if you own Qualcomm stock - but this is real. Qualcomm getting Apple business is not only a huge revenue source, but business that they clearly count on having. It’s not a “hobby.” It’s reliable and recurring billions.
Kuo seems to indicate that apple’s continued development instead of launch is a life saver for Qualcomm and that it buys them time to offset the major financial crush from losing Apple.
Apple is likely in the early to mid stages of R&D on this - especially with the need to develop around competitor patent acquisitions), so Qualcomm has some years left to milk the situation. But, the day is coming just as the years of phone rumors and SOC rumors came to fruition - especially since Apple has a head start from acquiring Intel’s modem business.
The great news for Qualcomm is that their modems are pretty good and they have apple’s business for a while. The board is no doubt using some of this incoming to develop better modem using future standards as well as to survive the coming red ocean once Apple (and likely others) pull the plug on such large recurring revenue feeds.
QC will definitely milk the situation for all it is worth. That is normal.
In fact they had a double whammy windfall. Apple's business and, due to sanctions, Huawei/Honor's business. Neither of which were expected.
Shareholders who are into QC for the long term are fully aware that neither of those situations represent QC's core business projections because they were never on the long term road map to begin with and 5G IoT (in both consumer and industrial settings) is where the money will be going forward.
Last I remember, there were some patent issues after Qualcomm bought a bunch.
Apple will succeed in launching a new, superior modem and it will be a gigantic hit to Qualcomm revenues. Apple will use their own modems in all iPhone, iPads, apple watches, AR devices and posssibly even Macs.
The iPhone is a HUGE market, iPad is significant, Mac is huge, and Apple Watch is pretty big as well.
That’s a lot of revenue to lose and Qualcomm will wish they didn’t try to gouge apple a few years ago.
Short term thinking sometimes wins out in the short term, not so much in the long.
I doubt that other, silicon capable OEMs like Samsung and future Microsoft don’t have similar plans.
I don't think it will be a huge hit and QC will get its patent dues all the same.
All QC will really 'lose' is a business it never really had anyway (while they and Apple were dishing it out in court) as Apple was sourcing from Intel.
Also, as 5G enters the IoT realm, QC will sweep a lot of that business up along with Huawei, Mediatek, Samsung...
Apple is unlikely to shift anything like the numbers its competitors will as I doubt they will offer up their product to third parties.
I also doubt it's first generation product will be at the same level as the competition.
Considering they have apples business now, they definitely stand to lose big.
Apple may be looking to future standards as well - something that Qualcomm may need to pay royalties on. 5g has been going for a bit now. It won’t last forever.
It may well be the other way around, and Apple being forced into continuing to pay for a license to QC patents even for their own chip design. Scuttlebutt is that the canceling/delay/whatever of an Apple modem is connected to Apple's failure to get two Qualcomm patents invalidated. If true then QC will continue to have the upper hand after the current contract term is over. Apple will have to continue paying royalties.
By the way, those two patents are NOT standards-essential and subject to (F)RAND.
Comments
https://www.nasdaq.com/articles/what-happens-if-qualcomm-loses-apple-revenue-analyst-weighs-in-2021-03-19
Apple wanted to pay $1.50 for licensing but Qualcomm wanted over $7.50:
https://www.cnet.com/tech/mobile/apple-wanted-to-use-qualcomm-chips-in-its-newest-iphones-but-qualcomm-wouldnt-supply-jeff-williams-says-at-ftc/
The 5G modem chip is over $30:
https://www.theverge.com/2022/3/9/22968695/apple-iphone-se-price-increase-5g-tax
Apple sells around 250 million iOS devices per year. If they are paying Qualcomm somewhere in the region of $40 per device for 5G, that's closer to $10b/year. It says here, Qualcomm 2021 revenue was $33b:
https://www.macrotrends.net/stocks/charts/QCOM/qualcomm/revenue
Qualcomm notes Apple as one of their biggest clients in their earnings:
https://investor.qualcomm.com/financial-information/sec-filings/content/0001728949-21-000076/0001728949-21-000076.pdf
"A small number of customers/licensees historically have accounted for a significant portion of our consolidated revenues. In fiscal 2021, revenues from Apple, Samsung and Xiaomi each comprised 10% or more of our consolidated revenues."
Apple has to buy the chips from somewhere or build them. Every route would have a similar cost and no matter which route they take, they pass the cost to the consumer. Qualcomm would lose a significant amount of their revenue if they lost Apple as a client.
If they can do it with 4 GPU the iPhone Pro could bump up to 6core GPU cores non-pro iPhones stay at 4core.
In fact they had a double whammy windfall. Apple's business and, due to sanctions, Huawei/Honor's business. Neither of which were expected.
Shareholders who are into QC for the long term are fully aware that neither of those situations represent QC's core business projections because they were never on the long term road map to begin with and 5G IoT (in both consumer and industrial settings) is where the money will be going forward.
By the way, those two patents are NOT standards-essential and subject to (F)RAND.