In the context of the in-depth reshaping of the smart terminal chip ecology, the cooperation rift between Apple and Qualcomm is becoming more and more obvious, and it will eventually move towards a "technical breakup". On June 5, 2025, Qualcomm CEO Cristiano Amon said publicly: "We are ready to end the baseband cooperation with Apple. This statement not only marks the phased results of Apple's self-developed communication chip strategy, but also indicates a round of deep reshuffle of the global mobile communication market pattern.
1. A glorious past: More than 13% of revenue comes from Apple
Qualcomm has long been a major supplier of modem chips for Apple's iPhone series. Since the first generation of the iPhone came out in 2007, Qualcomm's cellular communication technology has become an important communication support. According to Qualcomm's financial report data, as of fiscal year 2025, Apple will contribute about $5.7 billion to $5.9 billion in revenue to Qualcomm every year, accounting for about 13.1% of Qualcomm's total revenue of $43.5 billion, and is one of its largest single customers.
This cooperation not only brought stable and considerable profits, but also accelerated the leap in the communication performance of the iPhone in the early days of 5G rollout. Qualcomm X-series modems have played a key role in the iPhone 12 to iPhone 15 series, providing Apple with support for network compatibility with major carriers around the world.
2. Apple's decoupling intention is clear: the self-developed C1 baseband chip debuted
However, Apple has always had concerns about the "control of others" in its own communication chips. In particular, after the escalation of the patent licensing dispute with Qualcomm in 2018 and the acquisition of Intel's baseband business in 2020, its "baseband chip autonomy" route was officially launched.
The iPhone 16e, which will be released in February 2025, is equipped with Apple's self-developed C1 modem chip for the first time. The chip uses TSMC's 4nm process, and the energy efficiency performance in the sub-6GHz band has been better than Qualcomm's predecessor, although it still does not support the mmWave standard, and the overall performance has been commercialized. According to people familiar with the matter, Apple will fully complete the switch of the self-developed baseband of the iPhone product line in 2027 and gradually replace Qualcomm.
What's more, the autonomous baseband can save Apple a lot of money. At about $20 per modem, Apple ships about 240 million iPhones a year, which can reduce costs by about $1.5 billion to $2 billion per year after the core change, and at the same time have a greater say in communication protocol optimization, security control, and software and hardware coordination.
Figure: $5.7 Billion Breakup Fee: Apple and Qualcomm’s Battle Over Modem Chips
3. Qualcomm Coping: Expand the two new channels of Android and "car + AI".
Qualcomm has apparently predicted Apple's de-Qualcomm trend. Amon said on multiple earnings calls that Qualcomm is accelerating the pace of customer diversification and transforming to a number of new growth curves such as automotive electronics, AI computing, XR and the Internet of Things.
First of all, in the Android market, Qualcomm still dominates the high-end communication chip market. In 2025, global shipments of Android smartphones are expected to reach 1.2 billion units, of which about 35% are powered by the Qualcomm Snapdragon platform. In particular, Samsung, Xiaomi, OPPO and other leading manufacturers still regard the Qualcomm X75/X80 series as the first choice for flagship configuration. According to Counterpoint data, in the first quarter of 2025, Qualcomm will have a 65% market share in Android's high-end 5G baseband.
Second, the automotive business has become the pillar of Qualcomm's medium- and long-term growth. The Snapdragon Auto 5G Modem-RF system, released in 2024, has been applied in new models of automakers such as BMW, GM, and Hyundai to provide high-speed communication support for V2X communication, in-vehicle navigation, and remote upgrades. Qualcomm's automotive business has surpassed $1.5 billion in annual revenue and expects to achieve annual revenue of more than $9 billion by 2030.
In addition, Qualcomm is also accelerating its investment in the field of AI server chips to compete with giants such as NVIDIA and AMD. According to Strategy Analytics, the global AI server chip market will reach $150 billion by 2027. In order to seize market opportunities, Qualcomm has established an AI chip team of more than 3,000 people, and plans to invest more than $5 billion to develop data center SoC products for generative AI.
4. Market competition intensifies: MediaTek, AMD, and Apple are caught on three sides
Even as Qualcomm transforms, the road ahead remains challenging. In the field of smartphone baseband, MediaTek is rapidly entering the mid-to-high-end market with the Dimensity series, especially among price-sensitive manufacturers. Although Qualcomm still has performance and signal advantages at the high-end chip level, price competition is constantly eroding its margins.
In the server market, AMD, Intel, and Nvidia have formed a three-legged pattern. Although Qualcomm has the advantages of self-developed AI accelerator NPU and low power consumption, it still needs to rely on ecological support and rapid product iteration to achieve scale effect in the data center, and the challenge is far more than "making a good chip".
And Apple is no longer just a consumer electronics company. In recent years, it is vigorously expanding its chip self-development capabilities, from A-series mobile chips, M-series PC SoCs, to today's C-series communication baseband, Apple's chip strategy is gradually evolving to "full-platform self-control". In the future, Apple may even extend its baseband capabilities to wearables, XR devices, and even satellite communications, posing a frontal threat to traditional chip manufacturers.
5. Supply chain enlightenment: highly bound risk and independent innovation window period
The fission of the relationship between Qualcomm and Apple has brought three major enlightenments to the entire semiconductor industry:
1. The risk of high dependence on supply chains is becoming increasingly prominent. Under the uncertain global macro environment and the trend of technological decoupling, any chip manufacturer that relies too much on a single customer will bury potential business risks. Qualcomm's transformation is a direct response to this reality.
2. The independence of core technology has become the "standard" of technology giants. Both Apple and Tesla are actively building their own chip capabilities. Only by mastering the core technology can enterprises truly grasp the control of the industrial chain and form sustainable differentiated advantages.
3. The industry pattern will move towards the coexistence of "fragmentation-led" and "ecosystem competition". In the future, chip companies must not only fight for technology, but also fight for ecology and upstream and downstream integration capabilities. The convergence trend of communications, AI, automobiles, edge computing and other tracks will also force chip manufacturers to jump out of the traditional "single product explosion" thinking and transform into a solution provider integrating system integration and software and hardware.
6. Conclusion: After breaking up, they each went to the sea of stars
Qualcomm and Apple were once the most representative examples of cooperation in the history of smartphone communication technology. But the end of this relationship is not a failure, but an inevitable path for tech giants to self-adjust and break through in the new era. For Qualcomm, this is an inflection point to get rid of dependence and find a new engine for growth; For Apple, this is a milestone in building a high wall of chip independence.
For the entire industry, the deep shock caused by this "sky-high breakup" will continue to promote technological innovation, supply chain restructuring and the evolution of the global competition pattern. In the next five years, whether it is AI computing power, automotive intelligence, or terminal communication architecture, whoever can seize the key track and build a moat will be able to occupy a dominant position in the new chip competition cycle.
