Apple puts modem chip engineering in-house

The iPhone XS gold finish

Apple may have just made a move that will let it assert even more control over the parts it uses for its iPhones.

You may recall the reports in the media, including in these columns of a job advertisement that attracted attention some time back where Apple had called for designers of cellular modems.

Global wire agency Reuters has filed a report claiming that Apple has taken a decision to add the modem chip engineering unit to its in-house resources and a very senior official has been asked the head the function. That's the phone's modem, which was previously a Qualcomm-exclusive contract before Apple moved to Intel parts, while simultaneously engaging Qualcomm in a complicated legal battle relating to royalties and patents.

It is no hidden secret that Apple had been relying on third-parties for its modem chips. There's no room for some substandard component in that phone'. Samsung and LG now build displays for the iPhone, for instance.

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Additionally, Apple's senior vice president of hardware technologies Johny Srouji is reportedly taking over management of the company's modem chip design team. Apple's timeline for coming out with its own modem chip could put it behind the initial launch of 5G phones, though it's been widely expected that the 2019 iPhones would lack 5G connectivity.

The news of Apple going in-house for modem engineering is not something new. Apple also said that it plans to build its own team in the local area. Srouji has been associated with Apple since 2008 and has lead Apple's chip design department.

People in the know are commenting that if Apple succeeds in designing and making its own modem chips, it would mean the company will reap many benefits, though, in the short-term, it would mean huge investments in developing the capabilities. Modem chips are among the priciest components in the iPhone, costing the company anywhere from $3 billion to $4 billion a year, an industry expert told Reuters. Both of them make their own modems.

Making its own modem chips would likely cost Apple hundreds of millions of dollars or more per year in development costs, analysts said, but could save it money eventually. The way it is explained is that if Apple can combine the modem chip with the processor chip, it will throw its products into the next orbit.

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