Apple ends its Qualcomm dependency with the new C1 modem chip

Apple and Qualcomm's relationship has been strained for a decade and the iPhone 16e C1 chip is Apple's first move to cut ties once and for all.

The relationship between Apple and Qualcomm has been a tech soap opera. For over 15 years, Qualcomm's modem chips powered Apple's iPhones, enabling wireless connectivity to cellular networks. And now, it's over.

Behind the scenes, the partnership between Apple and Qualcomm has seen disputes over royalties, patent fees, and personal and professional tensions. As Apple intensifies its efforts to reduce its reliance on Qualcomm, other smartphone companies are watching, according to a report by The Information.

A functional partnership

When Apple launched the first iPhone in 2007, Qualcomm's modem chips were a critical component. The collaboration seemed straightforward — Qualcomm provided the technology, and Apple integrated it into its iPhones.

However, as iPhone sales skyrocketed, so did the royalty payments Apple owed Qualcomm. Analysts estimated that Apple paid over $2.5 billion in 2024 alone for Qualcomm's patent licenses, fees that Apple's leadership, especially CEO Tim Cook, considered too high.

The first public cracks in the relationship appeared in 2017 when Apple filed a lawsuit against Qualcomm, accusing it of overcharging for patent royalties. Qualcomm countered by suing Apple and even managed to block certain iPhone models from being sold in China and Germany.

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These legal skirmishes were partnered with behind-the-scenes snubs, including ignored phone calls and walkouts from high-stakes meetings. For example, former Qualcomm CEO Steve Mollenkopf once left a negotiation at Apple's Cupertino headquarters without informing Cook, leaving him surprised to learn Mollenkopf would not be returning.

Other instances included Mollenkopf appearing disengaged during meetings, such as scrolling through photos of his dog on his phone, which Apple executives took as a sign of disrespect.

Pivoting to Intel and in-house modems

In 2019, Apple and Qualcomm reached a new agreement that ended their legal battle. The deal included a multiyear contract for Qualcomm to supply modems to Apple and a one-time payment of approximately $4.5 billion from Apple.

But for Intel, the outcome was bleak. Since Apple was its only modem customer, the new arrangement meant Intel was out of the picture.

Side view of two white iPhone 16e smartphones stacked, showing camera, buttons, and partial screen with colorful reflections.

iPhone 16e introduced the C1 modem chip. Image credit: Apple

On the same day the Apple-Qualcomm agreement was announced, Intel announced its exit from the modem business entirely.

Shortly after, Apple acquired Intel's modem business for $1 billion, bringing over 2,200 employees and a bunch of cellular patents to accelerate its in-house modem development.

The current state: C1 modem

Apple's recent launch of the budget-friendly iPhone 16e, featuring an Apple-designed C1 modem instead of a Qualcomm chip, is a big moment for the company. The C1 modem is significant as Apple's first in-house modem used in a production iPhone.

The company plans to phase out Qualcomm modems entirely by 2027, although it still owes royalties for using the 5G standard.

While the C1 modem is a step toward independence, it currently lacks support for millimeter-wave (mmWave) 5G technology, which offers ultra-fast speeds in specific areas. However, Apple is reportedly developing a second-generation modem with mmWave support, expected to debut in future iPhone models.

Apple's road ahead

Plans from Apple to integrate C1 into an iPhone 17 model this fall and replace Qualcomm's modem in the Apple Watch Ultra with MediaTek's technology in 2025 will make the company more independent.

Five iPhones displayed with camera views; gold, blue, and white models. Central screen shows person on snowy path, sunset in background.

The entire iPhone 16e family

Looking further ahead, Apple aims to introduce its Ganymede modem in 2026, bringing mmWave support to iPhones and at least one iPad. By 2027, the company hopes to release its Prometheus modem, which it believes could finally outperform Qualcomm's offerings.

Qualcomm's strategy moving forward

Of course, Qualcomm won't be happy with Apple's modem efforts. Apple's move will impact its bottom line significantly.

But Qualcomm is already bracing for life without Apple as a customer. Earlier in February, CEO Cristiano Amon told analysts that by 2026, Qualcomm expects to supply modems for just 20% of iPhones — and none at all by 2027.

To soften the blow, the company has been branching out into other markets, including chips for cars, PCs, virtual and augmented reality, and smart devices, aiming to reduce its dependence on modem sales and patent licensing.

Eliminating Qualcomm modems will save Apple billions annually, as Apple paid around $23 per modem and $8 in patent fees per device.

Such a change might pressure Qualcomm to innovate faster and could influence other smartphone makers to explore alternatives to Qualcomm's dominance.

16 Comments

tht 24 Years · 5789 comments

About 1 month ago

When Apple launched the first iPhone in 2007, Qualcomm's modem chips were a critical component. The collaboration seemed straightforward -- Qualcomm provided the technology, and Apple integrated it into its iPhones.
This is incorrect. Apple used Infineon modems from 2007 to about 2011, when the Verizon iPhone 4 came out. Qualcomm had a patent lock on CDMA cellular technologies in the USA, with Verizon being a big adopter. If an OEM wanted their phone on Verizon, they had to use Qualcomm modems. Qualcomm was also a big contributor to LTE networking as well, and it continued to have a patent lock in the USA, resulting in most OEMs needing to use their modems in the USA.

Infineon couldn't transition from 3G to 4G (HSPA, LTE) on their own? They ran into trouble? Intel bought them out, and tried their hands at modem chips.

But for Intel, the outcome was bleak. Since Apple was its only modem customer, the new arrangement meant Intel was out of the picture.
By 2019, Intel knew they were cooked. Intel's fabrication process advantage was a crutch for their chip designs. They always counted on it to recover from their design mistakes, either by enabling them to make the cheapest chips, chips with the most margin, or simply using a lot of power to maintain performance. If they had a good design, like Yonah and the Bridges, they dominated. By 2019 however, TSMC overtook Intel in fabrication technology, with Intel having failed for about 4 years to get their 10nm fab to mass produce chips.

Chips are only as good as the fabrication process they are made on. Chips have to be within a half-node behind to maintain competitiveness to chips fabbed on a leading edge node. If they aren't and are say 1 node behind, the numbers are bleak: they have half the number of transistors, power consumption is 30% to 100% higher, costs per chip are 50% to 100% higher.

Without being able to compete on fab with TSMC, and Samsung has even caught up, a power consumption sensitive chip like for a cell modem just isn't going to be competitive. It's not hard for a CEO to look at the basic facts of what their fab can do, what their competitor fabs can do, and begin to jettison all the chips that they know won't be competitive. Modems were definitely in that category. x86 had a lot of legacy while being able to tolerate bigger power envelopes, but modems? No.

Apple has the advantage of having a great relationship with TSMC, a very symbiotic one, and can use TSMC's fabs for modem chips.

Intel's other issue was a business one. They wanted 60% margins for their chips. Cell phone SoC and modem chips are targeted to cost about $30 to $50 to OEMs. Intel was in the business of selling $300 to $500 chips to OEMs. They were blinded by their business model debt on where technology was going. And oddly, they saw things like HPC on a card and AI accelerators for a long time. They just could execute on the chip design side on high margin chips either. So, fuckups all around for Intel.

The C1 modem is significant as Apple's first in-house modem used in a production iPhone.
Would be interesting to here the story, read the book, on what Apple was trying to do from 2019 when they bought Intel's modem assets, to the shipping of the C1 modem in the iPhone 16e in 2025.

Did they start from a blank piece of paper for a new modem design? 5 years isn't a bad timeline for a modem chip going from nothing to shipping millions. Did they plan on modifying an existing Intel design? Minimum had to be reworked from being fabbed on Intel 7/10nm to TSMC 4/5nm.

There will be a patent royalties lawsuit campaigns to come with patent pool holders.

3 Likes · 0 Dislikes

DAalseth 7 Years · 3207 comments

About 1 month ago

Eliminating Qualcomm modems will save Apple billions annually, as Apple paid around $23 per modem and $8 in patent fees per device
So, should we expect a major price drop this fall? I’m not holding my breath. I expect them to bump the 17 prices up by $100-$200, based on what they did with the 16E.

0 Likes · 3 Dislikes

22july2013 12 Years · 3792 comments

About 1 month ago

1 Like · 1 Dislike

tht 24 Years · 5789 comments

About 1 month ago

DAalseth said:

Eliminating Qualcomm modems will save Apple billions annually, as Apple paid around $23 per modem and $8 in patent fees per device
So, should we expect a major price drop this fall? I’m not holding my breath. I expect them to bump the 17 prices up by $100-$200, based on what they did with the 16E.

Not this fall, but perhaps Spring of 2026 they may be able to price it at $500. The iPhone 16 will drop to the $700 when the iPhone 17 comes out, so there will be a period of time after the Fall for the lineup to be:

$600 iPhone 16e
$700 iPhone 16
$800 iPhone 17
$900 iPhone 17 Air
$1000 iPhone 17 Pro
$1200 iPhone 17 Pro Max.

Tariffs and whatnot may jigger the price tiers or change what comes in the box though. Spring 2026 is the earliest for any kind of change to the iPhone 16e. It will probably be Fall of 2026 for the iPhone 16e to drop to $500. How the iPhone 17 Air will be priced is still a mystery though.

2 Likes · 0 Dislikes

bloggerblog 17 Years · 2549 comments

About 1 month ago

DAalseth said:

Eliminating Qualcomm modems will save Apple billions annually, as Apple paid around $23 per modem and $8 in patent fees per device
So, should we expect a major price drop this fall? I’m not holding my breath. I expect them to bump the 17 prices up by $100-$200, based on what they did with the 16E.

So Apple was paying Qualcomm $31 per device, if Apple now owns the tech it may cost say $5, a savings of $26. But, Apple had to dish out money to buy Intel's tech, pay employees salaries for a decade without any returns, investing in equipment etc. It would take a good 5 years if not more for a profit to be realized, by then inflation would have taken its toll. So in short, no, we won't see reduced iPhone prices.