Apple's plans to become self-reliant in producing its device components are drawing closer to reality. Qualcomm's Chief Executive Officer (CEO), Cristiano Amon, confirmed that his company's contribution in supplying modems for the next-generation iPhone lineup, including the iPhone 18 Pro, will shrink faster than originally estimated.
In the financial report for the third quarter of fiscal year 2026, Amon revealed that revenue from Apple is projected to decline sharply starting next quarter. This is due to Qualcomm's share of modem components in the latest iPhones being expected to plummet below 20 percent. This information also refutes previous rumors suggesting Apple would still implement a dual-supply strategy by continuing to use Qualcomm modems for the United States market.
Apple's aggressive move is driven by the accelerated development of its in-house modem, named C2. This transition aligns with the Cupertino-based tech giant's long-term strategy to shed dependency on third-party manufacturers, similar to the successful migration from Intel processors to Apple Silicon on the Mac lineup. Through this proprietary modem, Apple is projected to optimize hardware and software integration, improve battery efficiency, and significantly cut licensing costs.
On the other hand, Qualcomm does not seem overly concerned about losing one of its largest clients. The semiconductor company is now actively diversifying its business by shifting focus to the data center sector and the automotive industry. Qualcomm targets data center revenue of $5 billion in fiscal year 2027 and rising to $15 billion by 2029 to bolster its future financial stability.
