Apple iPhones may feature Broadcom chips until 2023 as the companies strike a new $15 billion deal
Apple and Broadcom have struck a new $15 billion deal as a part of which Broadcom will sell wireless components worth the amount to Apple for its future products. This was revealed in the SEC filing on Thursday. It has also been confirmed that this is a three and half year deal beginning January 2020. As a part of this, Broadcom will provide its RF components and modules to Apple.
"Certain subsidiaries of Broadcom Inc. (the "Company") have entered into two separate multi-year statement of work agreements (the "2020 SOWs") with Apple Inc. ("Apple"). Both are for the supply of a range of specified high-performance wireless components and modules to Apple for use in its products. The 2020 SOWs are in addition to the agreement between the Company and Apple entered into on June 9, 2019, which remains in effect with respect to the supply of specified RF components and modules to Apple (the "2019 SOW"). The 2020 SOWs, and the remaining portion of the 2019 SOW, apply to Apple products launched during the three and a half year period beginning in January 2020 (the "Covered Products")," states the SEC filing.
Although it has not been specified what devices will be using the chips provided by Broadcom, as per teardowns of the latest iPhone 11, it was found that the device still uses Broadcom's Wi-Fi and Bluetooth chip in addition to an Avago-branded RF front-end chip that lets the iPhone connect to other wireless networks.
Rest assured, this new deal has deepened the relations between the two companies. In the December filing, Broadcom confirmed that Apple's business makes 20% of Broadcom's revenue. Apple, on the other hand, has named Broadcom as one of the key companies for its wireless communication.
"The touch sensitive glass for iPhone and iPad is made by Corning at a 65-year-old facility in Harrodsburg, Kentucky. Cincinnati Test Systems in Ohio designed a first-of-its-kind equipment to ensure iPhone is water resistant. And Broadcom in Fort Collins, Colorado, Qorvo in Hillsboro, Oregon and Skyworks in Woburn, Massachusetts, are all making wireless communication hardware that enables global connectivity," stated Apple in its newsroom post last year in January.