Why Apple Is Plowing Billions Of Dollars Into A Project That Won't Have A Payoff Near Term: Gurman Weighs In
Portfolio Pulse from Shanthi Rexaline
Apple is investing billions into developing an in-house cellular modem, a project that may not yield immediate returns. The company aims to eventually integrate this modem into a new wireless chip that handles Wi-Fi and Bluetooth, potentially improving reliability and battery life. Apple has faced setbacks, including performance issues and delays, and continues to rely on Qualcomm for modem chips until at least 2027.
August 18, 2024 | 8:15 pm
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Apple is investing heavily in developing an in-house cellular modem, which may not yield immediate returns but could improve long-term reliability and battery life by integrating Wi-Fi and Bluetooth. The project has faced setbacks, including performance issues and delays.
Apple's significant investment in an in-house modem is a long-term strategy that may not impact the stock price immediately. The project has faced setbacks, but the potential for improved reliability and battery life could be beneficial in the future.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Qualcomm has been Apple's modem supplier for over a decade and will continue to be until at least 2027. Apple's move to develop an in-house modem could eventually reduce its reliance on Qualcomm, but the transition will be gradual.
Qualcomm will continue to supply modem chips to Apple until at least 2027, despite Apple's efforts to develop an in-house modem. The gradual transition means Qualcomm's revenue from Apple will not be immediately impacted.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80