BI Analyst on Apple's Extension of Qualcomm Chip Deal

Apple's efforts to design its own modem chips are taking longer than expected, leading to an extended contract with Qualcomm. This delay is due to the complexity of designing 5G modem chips that must work across various regions and networks. Qualcomm is expected to see a revenue boost as a result. Apple plans to phase out Qualcomm chips gradually, starting with lower-risk products like watches and iPads before moving to flagship iPhones.

What does Apple's extended deal with Qualcomm indicate about Apple's chip design efforts?

• Apple has successfully designed its own modem chips.

• Apple's in-house chip design is progressing faster than expected.

• Apple has decided to stop designing its own chips.

• Apple's in-house chip design is taking longer than expected.

Why is designing a 5G modem chip considered complex?

• It requires compatibility with multiple network generations and regions.

• It only needs to work with 5G networks.

• It is a simple process with few technical challenges.

• It does not require testing with different service providers.

What is a potential risk if Apple's modem chip underperforms compared to Qualcomm's?

• Apple will gain a competitive advantage.

• Other manufacturers like Samsung may offer better connectivity.

• Apple will dominate the market.

• Qualcomm will lose market share.

What is the expected financial impact on Qualcomm due to the extended deal?

• A decrease in sales by $5 billion.

• An increase in sales by $5 to $7 billion.

• No change in sales.

• A decrease in sales by $7 billion.

How might Apple begin phasing out Qualcomm chips?

• By immediately replacing all Qualcomm chips.

• By not phasing out Qualcomm chips at all.

• By starting with lower-risk products like watches and iPads.

• By starting with their most premium iPhones.