Apple to Save $7-7.8B by 2027 with In-House 5G Modem
Apple plans full deployment of its in-house 5G modem by 2027, potentially saving $7-7.8B in annual licensing fees currently paid to Qualcomm. Global memory shortage and a surge in mobile DRAM prices are slowing consumer upgrade cycles, which could damp iPhone unit growth this year.
1. In-House Modem Rollout
Apple has begun deploying its custom 5G modem in select iPhone models and is targeting full migration by 2027, replacing external chip purchases from Qualcomm.
2. Licensing Cost Reduction
This transition could eliminate $7-7.8B annually in Qualcomm licensing fees, boosting Apple’s gross margins and freeing capital for R&D or marketing initiatives.
3. Memory Shortages and DRAM Prices
A global shift of semiconductor manufacturing toward AI infrastructure has tightened mobile DRAM supply, sending memory prices higher and increasing component costs for the iPhone lineup.
4. Impact on iPhone Sales Growth
Rising component costs and slower upgrade cycles are expected to constrain unit growth this year as consumers delay smartphone purchases due to elevated prices.