Apple Nears Completion of Shift to In-House Cellular Modems

Apple is closing the gap on a years-long effort to eliminate its reliance on Qualcomm for cellular connectivity. Recent signals from Qualcomm indicate that the transition to Apple's internally designed modems is nearly complete, marking a pivotal shift in the hardware architecture of the iPhone.

Qualcomm CEO Cristiano Amon stated that revenue from Apple is declining faster than previously anticipated. According to reports from Reuters and Computerworld, some estimates suggest that Apple's contribution could drop to below 20% of Qualcomm's annual revenue. This financial slide follows Apple's strategic deployment of its own silicon; the company has already integrated its in-house C1 and C1X modems into the iPhone 16e, 17e, and the iPhone Air models.

The Path to Integration

Apple's pursuit of a proprietary modem mirrors its successful transition to Apple Silicon for Macs and iPads. For years, the company sought to reduce the high costs associated with third-party modems and achieve tighter integration between the cellular radio and the system-on-a-chip (SoC). This journey was marked by several delays and contract extensions, but the phased rollout—starting with entry-level and "Air" models—demonstrates a cautious but steady migration away from Qualcomm's technology.

Strategic Implications

This transition represents a major strategic victory for Apple. By owning the modem design, Apple can optimize battery efficiency and enhance cellular network privacy. The move also reduces the company's dependency on a partner with whom it has a historically litigious relationship.

For Qualcomm, the loss of its largest customer creates a significant revenue vacuum. The company is now forced to pivot its business model, aggressively pursuing AI data center revenue to offset the massive drop in income from the iPhone supply chain. The urgency of this pivot is underscored by the fact that the current patent licensing agreement between the two giants is set to expire in March 2027.

What to Watch

Industry attention now turns to the iPhone 18 Pro series, where the next-generation C2 modem is expected to debut. This advanced chip is projected to offer superior battery efficiency and AI-supported network efficiency. While the C-series modems are expanding, the industry is watching how Apple handles high-frequency mmWave support, which has historically been a Qualcomm stronghold. Whether Apple can fully replicate this capability in-house or will maintain a hybrid approach for specific markets remains a key detail as the 2027 deadline approaches.