Apple’s Billion-Dollar Bet: In-House Modem to Transform Future iPhones

Apple is investing billions into developing an in-house cellular modem, aiming to eventually shift away from its reliance on Qualcomm. However, according to Bloomberg’s Mark Gurman, this project is not expected to deliver immediate benefits to users, at least in its early stages.

In his “Power On” newsletter, Gurman explained that unlike the company’s transition to Apple silicon, the first-generation custom modem will not significantly impact user experience. Insiders within Apple reportedly admit that “customers don’t really care who makes the modem in their phone” and that it’s difficult to foresee how substantial the advantages will be in the short term.

However, Apple’s strategy involves playing the long game. The company is hoping its modem will evolve into a more advanced component that could potentially reshape the design and functionality of future iPhones. As part of this vision, Apple aims to eventually integrate its custom modem with Wi-Fi and Bluetooth capabilities into a single connectivity component. This approach could improve device reliability, extend battery life, and streamline internal designs by reducing the number of separate chips needed.

Looking even further ahead, Apple may one day combine all connectivity functions into the device’s main system-on-a-chip (SoC), which could bring additional cost savings and create more space inside the iPhone for design flexibility and other features.

The move to develop in-house modems follows Apple’s long-standing reliance on Qualcomm, which has provided modems for the iPhone for more than a decade. However, a bitter legal dispute over royalties and patents in 2018 prompted Apple to accelerate efforts to design its own. Since embarking on this path, Apple has encountered performance issues and overheating concerns, leading to delays in the modem’s debut, which has now been pushed back to 2025 at the earliest.

Once ready, the rollout of Apple’s custom modems is expected to be gradual, starting with niche devices before expanding across the product lineup in the coming years.