In his latest “Power On” newsletter, Bloomberg’s Mark Gurman says Apple is devoting billions of dollars, thousands of engineers and millions of working hours to a project, an in-house-built modem, “that won’t really improve its devices — at least at the outset.”
“Even people within Apple acknowledge that customers don’t really care who makes the modem in their phone,” he writes. “ The project will allow the company to say that it produces the most important iPhone components in-house, which might be a marketing point. But the user experience won’t noticeably change.”
So why is Apple making the effort? To save money.
“The iPhone maker has argued for years that it pays Qualcomm too much for modems,” Gurman says. “But Qualcomm has said that Apple will still have to pay it some royalties regardless (the chipmaker believes that Apple won’t be able to avoid infringing its patents).”
He also says there’s a possibility that Apple could one day combine all of this into the device’s main system on a chip, or SoC.
“That could further cut costs and save space inside the iPhone, allowing for more design choices,” Gurman says. “Furthermore, if Apple does ultimately save money by switching away from Qualcomm, it could redirect that spending toward new features and components.”
This info from Gurman is from the free edition of “Power On”. If you like it, consider subscribing to Bloomberg.com—you’ll receive the newsletter earlier and get exclusive access to a Q&A section.
