iPhone C1 modem chip to cut Apple’s Qualcomm reliance by 80%

The iPhone C1 modem chip, Apple’s first in-house cellular processor looks set to slash the share of Qualcomm’s modems in Apple hardware to 20% of its current level by 2026. The chip combines 4-nanometre baseband with 7-nanometre transceiver technology.

The C1 modem subsystem debuts in the $599 iPhone 16e, and represents the most important hardware development since Apple’s $1 billion acquisition of Intel’s smartphone modem business in 2019. The custom chip forms part of Apple’s broader strategy to bring more component design in-house following its transition to custom ARM-based processors for iPhones and Macs.

“We build a platform for generations. C1 is the start, and we’re going to keep improving that technology each generation so that it becomes a platform for us that will be used to differentiate this technology for our products,” Johny Srouji, senior vice president of hardware technologies at Apple, toldReuters.

Technical specifications

The new iPhone C1 modem chip has been tested with 180 carriers in 55 countries to help ensure compatibility. While it includes custom GPS systems and satellite connectivity capabilities, the chip currently lacks millimetre-wave 5G capability – a technology where Qualcomm maintains significant expertise.

The C1 modem’s integration with Apple’s processor chips enhances network performance, the company claims. Arun Mathias, vice president for wireless software at Apple, said the integration allows the phone to prioritise time-sensitive data transfers during network congestion, ensuring better connectivity metrics during peak use periods.

According to Kaiann Drance, vice president of iPhone product marketing at Apple, the iPhone 16e achieves superior battery life compared to other 6.1-inch iPhones, attributing the improvement to the C1. The 16e uses the same A18 processor chip as other iPhone 16 models and supports Apple’s latest artificial intelligence features, currently provided by OpenAI.

Market impact

Despite its declining modem share, Qualcomm maintains a technology licensing agreement with Apple until at least 2027. Following the announcement, Qualcomm’s shares rose by 1%, while Apple’s remained stable.

The development of custom modem chips represents a significant technical challenge. Only Samsung, MediaTek, and Huawei have successfully created similar components. Modem chips need to maintain compatibility with hundreds of carriers globally and meet diverse regional network standards and specifications.

Industry evolution

Apple’s move follows a complex history with Qualcomm, including a legal dispute settled in 2019 after Intel failed to provide viable alternative modem solutions. Despite new supply agreements with Qualcomm, Apple continued developing its in-house modem technology, investing significantly in research and development capabilities.

“We’re not the merchant vendor to compete with Qualcomm and MediaTek and others. I believe we’re building something truly differentiating that our customers will benefit from,” Srouji said, emphasising Apple’s focus on creating products tailored to their devices rather than matching competitor specifications.

Future implications

Apple executives have declined to specify when their chips might incorporate millimetre wave 5G technology or detail a timeline for phasing out Qualcomm silicon. However, Apple’s levels of investment suggest a long-term commitment to in-house modems.

(Photo by Apple)

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