Jan 9 (Portal) – Apple Inc (AAPL.O) plans to replace a Broadcom Inc (AVGO.O) chip from its devices with an internal design in 2025, Bloomberg News reported on Monday, citing those involved in the matter familiar people.
The iPhone maker has been working to limit its reliance on other chipmakers by switching to its own line of chips for newer models of its Mac computers, replacing Intel Corp (INTC.O).
Apple plans to replace Broadcom’s Wi-Fi and Bluetooth chip, according to the Bloomberg News report, which added that Apple is the US chipmaker’s biggest customer.
The Cupertino, Calif.-based company accounts for about 20% of Broadcom’s revenue.
According to Stacy Rasgon, an analyst at financial services firm AB Bernstein, Apple’s decision is likely to hurt Broadcom’s revenue by about $1 billion to $1.5 billion.
However, he added that Broadcom’s radio frequency, or HF, chips are complex to design and manufacture and are unlikely to be replaced in the short term.
Broadcom shares closed 2% lower.
Apple and Broadcom did not immediately respond to a Portal request for comment.
According to the report, Apple also intends to replace Qualcomm Inc’s (QCOM.O) cellular modem chips with its own by late 2024 or early 2025.
Qualcomm has said it believes Apple will phase out its chips. Apple uses Qualcomm’s X65 for 5G modem in its iPhone 14 range and is expected to use a newer version of the same chip in the iPhone 15 models, which are expected to be released later this year, according to Jefferies analyst William Yang.
A Qualcomm spokesperson referred to the company’s November statement, in which it said it expects “a minimal contribution from Apple product sales in FY25.”
Reporting by Yuvraj Malik in Bengaluru and Stephen Nellis in San Luis Obispo County; Edited by Krishna Chandra Eluri and Sherry Jacob-Phillips
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