For 2025 iPhone models, Apple is developing a combined Wi-Fi and Bluetooth chip according to Bloomberg. The tech company plans to replace Broadcom’s chip with its in-house design.
iPhone is Apple’s most successful product which accounts for more than half of its revenue. In 2022, iPhone sales generated $394.3 billion in revenue which is not only profitable for the company but also for its components suppliers like Broadcom and Qualcomm.
Apple is Broadcom’s largest customer and accounted for about 20% of the chipmaker’s revenue in the last fiscal year, amounting to almost $7 billion. Qualcomm got 22% of its annual sales from the iPhone maker, representing nearly $10 billion, though that company has warned for years that its Apple reliance will wane.
Apple to replace wireless parts supplied by Broadcom and Qualcomm in future iPhones
As Broadcom’s biggest North American customer, Apple’s business accounted for 20% of its revenue in 2022 totaling to $7 billion. But that partnership is likely to end in 2025 with the launch of the tech giant’s custom Wi-Fi chip.
The chipmaker (Broadcom) makes a combined component that handles both Wi-Fi and Bluetooth functions on Apple devices. Apple is developing an in-house replacement for that chip and is aiming to start using it in its devices in 2025, the people said.
In addition to Wi-Fi and Bluetooth chips from Broadcom, the tech company is also developing its own 5G modem to end dependence on Qualcomm which is its current 5G chip supplier. Apple’s custom 5G chip is expected to launch in 2024 – 2025.
The company already uses in-house wireless chips in the latest products, the H2 processor in AirPods and the W3 chip in its smartwatches, and in 2020, began the transition of Macs from Intel chips to M series silicon. Therefore, the tech giant’s decision to replace third-party wireless components from iPhones with custom parts is going to further offset the chip industry.
The moves will further upend a chip industry that makes billions of dollars supplying Apple components. Already, the world’s most valuable tech company has removed most Intel Corp. processors from its Mac computers, opting instead to use in-house chips known as Apple Silicon. Now the changes are hitting the biggest makers of wireless electronics.
It is also reported that the Cupertino tech giant is also working on a next-generation wireless part that will combine cellular modem, Wi-Fi, and Bluetooth tech in a single chip.