Mint explain: the great importance of Apple’s first custom modem chip

Why did Apple suddenly make a modem?

This step is not suddenly. Apple’s step has come a long time to develop a modem. In 2018, Apple and US Chipmaker Qualcomm Inc. Has played a long battle in courts in China, Germany and the US over alleged patent violations by the iPhone manufacturer. In April 2019, both companies agreed to an out-of-court colony-but reports claimed that Apple paid Qualcomm to $ 6 billion.

Apple’s settlement was mandatory. Qualcomm, at that time, was making its first generation 5G modem for upcoming smartphones – which was slate to launch in global markets since 2019.

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Apple, historically, always licensed its smartphone connectivity modem from Qualcomm. But the case of that time struggled to reach 5G on the company’s state -of -the -art smartphone.

This shock eventually, since nearly seven years since the case began with Qualcomm, Apple finally showed its modem design to the world.

Couldn’t Apple just choose an alternative modem?

Apple tried. During his trial with Qualcomm, Apple selected Intel Corp to create a custom modem for it with 5G connectivity. However, Intel assigned and recalled several deadlines, which eventually inspired to launch Apple’s iPhone 11 without 5G connectivity in 2019.

In July of that year, Apple bought Intel’s Modem Engineering Division for $ 1 billion. At that time industry experts and analysts said the acquisition was built in the cupertino firm. Five and a half years later, Apple C1 was launched on 19 February.

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Why did the apple take so much time to make your modem chip?

It is very difficult to create a modem chip as connectivity standards have to support all global telecommunications networks. To do this, modem manufacturers have to freeze their chips on every country and every telecom firm to ensure maximum hardware-software compatibility.

Apple said in a statement that it tested the C1 chip in 180 network operators in 55 countries to ensure global connectivity. This requires both time and investment in significant financial resources, which is why there are only a few select companies that create cellular and wireless connectivity chips.

The Samsung Semiconductor of Korea, Taiwan’s MediaTek, and the US Broadcom and Qualcomm are among the top companies providing connectivity chips for the global smartphone industry. For Apple, Broadcom is a current supplier of wireless or Wi-Fi chips.

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But what does Apple stand to achieve?

For Apple, the big victory is the control that he benefits on his ecosystem. Apple always thrives when weave a very close ecosystem. Designing your own chips and processors means that Apple does not need to force the conditions of third-party chipmakers in its software.

This results in rapid performance and connectivity. “It also shows the close component autonomy for Apple for Apple, now it also makes its laptop chips,” said Navakendra Singh, Associate Vice President of Market Research firm IDC India. Almost all technology sellers, which are extremely positive steps for the company. ,

For Qualcomm, reports suggest that its modem sales may fall one-fifth of the current levels.

Why can other companies not do this?

Apple’s closest contestant Samsung Electronics announced an annual revenue of $ 206.7 billion in the smartphone business at the end of last year. However, it includes all Samsung’s businesses – Veraus Apple’s iPhone business is about 90% of Samsung Electronics’s annual global revenue.

This sheer difference in the scale shows why Apple has a headroom to invest such. While Samsung owns and operates its own semiconductor business – modem, and makes memory and processor chips – and even sells them to other companies commercially, its cumulative revenue still compared to Apple. Is small.

For other smartphone manufacturers such as BBK Electronics brand (Vivo, Oppo, Realme, etc.) and Ziaomi, their annual revenue is very low to spend billions to make modes in their annual revenue – benefits are not worth this extra investment.

In addition, Chinese smartphone companies usually sell smartphones at a price of one-fourth or even Apple’s iPhones, instead choose for a business model that takes advantage of the diluted margin in high versions in the price-sensitive markets. Is. But the slim-margin aspect reduces scope for these phone brands to make modem.

Does it affect the Indian electronics market?

Not straight, but in the long run, modem chip construction can become a part of India’s semiconductor fabrication unit lines after the latter mature as an industry.

So far, Apple’s C1 chip has 4Nm chips such as sophisticated production nodes. Meanwhile, India is expected to make its first chip fab operational, with the best of producing 28Nm chips.

India can also create such solutions to chip engineers and designers for the world in the long run.

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For users, Apple C1 chip, on paper, promises better management of crowded networks as Apple’s modem is specifically tuned to support their own software.

However, it is important to note that the Apple C1 chip is only half-effective-it does not support the high-bandwidth 5G spectrum. This can restrict its operation for now, but is a different of analysts.

Trial of C1 with the iPhone 16E is a master stroke as it will try the chip in action before Apple is depicted in its big-road flagship in the coming years. This is a win for Apple, “said Singh of IDC.

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