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Apple May Replace Key Broadcom Chip in 2025 iPhone With Homegrown Design
Apple may be planning replace a key Broadcom chip with its own in-house design in future products, according to a Bloomberg report citing anonymous sources. The company may also replace Qualcomm's modem with its own in-house design. This move marks a significant shift in Apple's supply chain strategy and signals the company's increased focus on developing its own hardware technologies.
The chip replacing the Broadcom solution is a Wi-Fi and Bluetooth combo chip, which is used in a wide range of devices including smartphones, laptops, and tablets. Moreover, the iPhone maker is already working on an improved version that also incorporates a cellular modem into the same IC package.
Broadcom has been a major supplier of these chips to Apple for many years, and counts on Apple for a whopping 22 percent of its sales as of the last fiscal year amounting to almost $10 billion in revenues. This development could potentially cost the company a whopping $1 billion to $1.5 billion in lost revenues.
New Chip Could Debut in 2025 iPhone Model
According to the report, the first products featuring Apple's in-house replacement for Broadcom hardware are expected to arrive in 2025. It further speculates that Apple will initially deploy the new chip in a high-end iPhone model, while introducing it gradually into the rest of its smartphone lineup.
This is quite plausible because it has used this approach in the past to replace key components in the iPhone. Replacing wireless communication hardware is also a difficult and drawn-out process due to the complexity of integration with different wireless carriers across the world following different radio standards and the testing that entails.
In the meantime, it will be interesting to see how this move affects Apple's relationships with its suppliers, as well as the wider tech industry. This news will likely be seen as a blow to Broadcom, which has been a major supplier of Wi-Fi and Bluetooth combo chips to Apple for many years. The company will now need to find new customers for its chips or risk losing a significant source of revenue.
Why Has Apple Chosen to Ditch Broadcom's Chip?
Apple's decision to switch to an in-house design is likely driven by a number of factors. One of the main reasons is likely a desire to reduce its reliance on external suppliers and increase control over its own supply chain. By designing and manufacturing its own chips, Apple can ensure that it has a steady supply of components for its products and can more easily integrate new technologies into its devices.
Another potential reason for the switch could be a desire to differentiate its products from those of its competitors. Apple has a reputation for being at the forefront of technology and constantly seeks ways to set itself apart from the competition. By developing its own chips, Apple can bring unique features and capabilities to its devices that may not be available from third-party suppliers.
There are also likely to be cost benefits to Apple's decision to switch to an in-house design. By bringing chip production in-house, Apple can potentially reduce its reliance on external suppliers and negotiate more favorable terms for the purchase of raw materials and other components. This could lead to cost savings that can be passed on to consumers or used to fund further research and development efforts.
Apple Has a History of Self Reliance
It's worth noting that Apple is no stranger to designing its own chips. The company has a long history of developing its own hardware technologies, including M-series processors for its Mac computers and the A-series chips that power its iPhones and iPads. However, this marks the first time that Apple has decided to design its own Wi-Fi and Bluetooth combo chip, a move that signals the company's increased focus on developing its own hardware technologies.
Apple's decision to replace a key Broadcom chip with its own in-house design is a significant development that underscores the company's commitment to developing its own hardware technologies. It remains to be seen how this move will impact Apple's relationships with its suppliers and the wider tech industry, but it's clear that the company is committed to assuming a more active role in the design and production of the components that go into its products.
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