Broadcom, Apple Sign New Agreement For Supplying Wireless Components

As 5G makes headway this year, a lot of chip makers are making way for the technology. In a new turn of events, chipmaker Broadcom announced that it has signed two multi-year agreements with Apple for supplying wireless components for its products. The new agreement is expected to generate $15 billion in revenue for Broadcom.

What's more, the shares of Broadcom increased two percent in extended trading after the announcement was made. The multi-year agreements '2020 SOWs' come in addition to the existing contracts for supplying radio frequency components and modules to Apple. The new deal was revealed by the chipmaker in a filing with the US Securities and Exchange Commissions (SEC).

Broadcom Apple Sign New Agreement

Broadcom already sells many components to Apple, which includes radio frequency chips. These chips are the key components that allow Apple devices like iPhone, iPad, and Apple Watch connect to wireless networks. Broadcom also sells a few other components that allow Apple devices to connect to Wi-Fi networks.

According to a report by Bloomberg, Broadcom has disclosed that the agreements include "the supply of a range of specified high-performance wireless components and modules to Apple for use in its products." The report also mentions that the chipmaker put its radio frequency chip unit for sale last year.

The disclosure of the new agreements let potential acquirers know that the deal would buy them a significant business relationship with the iPhone maker. At the same time, Apple typically reaches long-term deals with major suppliers, but the company is also developing its components, notes the report.

In other news, Apple is gearing up for a speculated launch of a new low-cost iPhone in March. Reports speculate that the low-cost iPhone is the successor of the iPhone SE that was launched back in 2016. Apple was also rumored to have two launch events from 2020, following companies like Samsung, OnePlus. If that's the case, Apple will likely launch three new iPhone models later in the year.