Apple's "Chip Swap" plan for 2025 may fall short as the company has invested billions of dollars but still lags far behind its competitors.
According to the media, Apple's previous target time for launching its self-developed baseband chip has been postponed to next year, and later extended to spring 2025. Now it seems that this goal may not be achievable, and it may take at least until the end of 2025 or the beginning of 2026. Currently, Apple's baseband chip is still in the early stages of development, and researchers believe that the initial version may lag behind competitors by several years.
After spending billions of dollars and more than five years, Apple's wish to "change chips" for the iPhone has still not come true.
Since 2018, Apple has invested thousands of manpower and billions of dollars in developing mobile modem chips, also known as baseband chips in China, with the aim of replacing Qualcomm chips in iPhones with self-developed chips. On Thursday, November 16, media outlets reported the bad news that Apple's chip development is still lagging behind.
According to the media, the target time set for Apple's "chip change" plan has been repeatedly postponed. Previously, it was postponed from next year to spring 2025. Given the current development situation, it is possible that even the goal of launching self-developed chips by 2025 will be missed. As a result, Apple's chips may not be released until at least the end of 2025 or the beginning of 2026.
Interestingly, 2026 is the last year of the contract renewal between Qualcomm and Apple. On September 11 this year, Qualcomm announced an agreement to provide Apple with Snapdragon 5G baseband and RF systems for the iPhones to be launched from 2024 to 2026. Two days later, Apple released the iPhone 15 Pro and 15 Pro Max, both equipped with the A17 Pro chip, the industry's first commercially available 3nm process chip. However, there was no progress in the 5G baseband chip.
Subsequently, Wall Street News mentioned that the launch of the iPhone 15 flagship series made the market realize that Apple is still facing difficulties in developing self-developed 5G baseband chips and is still dependent on Qualcomm. The new contract with Qualcomm means that Apple's self-developed baseband chip path is not smooth, and it will still be unable to break free from its reliance on Qualcomm in the next three years.
In September, some media outlets learned that Apple originally planned to use self-developed baseband chips in the latest iPhone models. However, tests conducted at the end of last year found that the chip was too slow, prone to overheating, and had a circuit board size that was too large, occupying half of the iPhone's area, making it unusable. Apple's self-developed chip is three years behind Qualcomm, which will result in the iPhone's network speed being unable to match its competitors. Therefore, Apple abandoned the idea of using this chip in the iPhone 15 model and postponed its launch to 2024. However, it later realized that this goal could not be achieved either.
Some media outlets mentioned that insiders believe that Apple's failure in the 5G baseband chip field is self-inflicted. There were disagreements among the technical challenges, communication issues, and responsible parties regarding whether to develop the 5G baseband chip in-house, which led to slow progress in chip research.
On Thursday, media outlets reported that Apple's baseband chip is still in the early stages of development, and researchers believe that the initial version may lag behind competitors by several years. It was mentioned that at least one version of the baseband chip currently being developed does not support the mmWave standard. The media also mentioned that one major obstacle in the development is the software that powers the modems, some of which were acquired from Intel. Those involved in the project have stated that the Intel code is not up to the task, and most of it needs to be rewritten from scratch. When Apple engineers try to add new features, the existing functionality gets disrupted, and the chip will not function properly.
Furthermore, testing the modems is a lengthy process, and Qualcomm has achieved its leading position in this field through decades of experimental research and development. In terms of technical challenges, a September report from Wall Street News pointed out that the baseband chips need to support global network standards, meet the network requirements of different operators worldwide, and undergo comprehensive field testing. Currently, most smartphone baseband chip suppliers in the market have been accumulating technology and patents since the 2G era.
In addition, Apple must also be cautious not to infringe on Qualcomm's patents. Currently, Apple pays approximately $9 to Qualcomm for each iPhone that utilizes Qualcomm technology. If it is found that the new modems infringe on Qualcomm's patents, Apple may have to pay higher fees.