Ming-Chi Kuo: Apple Will Miss 2023 iPhone Modem Target

29 JUNE 2022 - Apple’s attempt to free itself from Qualcomm on the 5G front may not be going as well as hoped. MacRumors highlights a series of Twitter posts from TF International analyst Ming-Chi Kuo. According to those, “Apple's own iPhone 5G modem chip development may have failed,” though he actually meant such development missed an anticipated (though unannounced) timeline.

In November of 2021, Reuters ran a report that had Qualcomm saying that it would only supply about 20% of iPhone’s wireless modems by 2023, and that that would move to a single-digit percentage in 2024. While Qualcomm did not indicate whether it thought Apple would do the remainder of wireless modems itself, Apple was known to be working on modems of its own, leading analysts and Apple watchers like Ming-Chi Kuo to believe that next year would be the year for Apple’s self-made modems.

Now, the analyst thinks not. For this series of Twitter posts the analyst has on his Qualcomm hat, rather than his Apple chapeau. Quoting the first:

My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%).

Twitter post two has the analyst saying:

Qualcomm’s revenue and EPS in 2H23-1H24 will likely beat market consensus thanks to its sole supplier position for 5G chips of 2H23 new iPhones as Apple fails to replace Qualcomm.

Dire as it sounds for that team, the third Twitter post says Kuo believes:

…Apple will continue to develop its own 5G chips, but by the time Apple succeeds and can replace Qualcomm, Qualcomm's other new businesses should have grown enough to significantly offset the negative impacts caused by the order loss of iPhone 5G chips.

Kind of ups the stakes on this week’s Supreme Court Ruling re: Apple and Qualcomm.