Apple is reported to continue using Qualcomm’s 5G modems for its iPhones until March 2027, and even though the company has plans to unveil a custom solution that will be found in the low-cost iPhone SE 4 next year, a large part of its baseband shipments will come from its exclusive supply chain partner. For Qualcomm, it is a win-win situation, and as Apple continues to ship more iPhone 16 units in 2024, the San Diego firm will be walking happily to the bank. We have formed an estimate of just how much revenue the 5G modem manufacturer will make through iPhone 16 sales, but we have to take into account Apple’s initial shipment target for the year.
An estimated $2.52 billion will be generated for Qualcomm through iPhone 16 5G modem sales alone, but consistent demand will play a pivotal role
Every iPhone 16 model is outfitted with the SDX71M 5G modem, as revealed in a recent teardown. While demand will fluctuate in these last few months, prior to Apple’s official announcement that happened in September, the company reportedly had a shipment target of 90 million units for 2024. This figure is 10 percent higher than the iPhone 15 lineup that launched last year, meaning an extensive payday for Qualcomm, but just how much? Well, based upon the ‘Bill Of Materials’ breakdown provided by TD Cowen, it was revealed that the iPhone 16 Pro Max was estimated to cost $32 more to make than the iPhone 15 Pro Max.
While that is a slightly higher sum, we focus on the image that mentions ‘Modem + Transceiver,’ which is estimated to cost Apple $28 per unit. Assuming the Cupertino giant successfully achieves its 90-million shipment target, that will equal $2.52 billion in 5G modem sales for Qualcomm, but that is not the end of the story. The chipset manufacturer has a multitude of 5G modem patents that it leverages to earn a licensing fee from Apple, and without knowing the exact figure, the only conclusion we can make is that the $2.52 billion is most likely the tip of the iceberg for Qualcomm’s earnings from 5G modem sales.
Bear in mind that this is just a rough estimate based on the information we have received from various sources, and the amount made by Qualcomm through iPhone 16 5G modem sales could be significantly higher based on what kind of deal it inked with Apple behind closed doors. In short, the aforementioned amount should be treated with a pinch of salt, but we should also highlight Apple’s persistence in slowly reducing dependence on Qualcomm, even though its custom 5G modem is said to deliver zero change to the user experience, and could be slower than the alternative.
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
Follow Wccftech on Google to get more of our news coverage in your feeds.
