
Apple to Replace Broadcom with Custom Wi-Fi and Bluetooth Chips by 2025 | Image Source: www.news18.com
CUPERTINO, Calif., Dec. 23, 2024 — In a bold move to increase autonomy over its hardware ecosystem, Apple plans to phase out Broadcom’s Wi-Fi and Bluetooth components in favor of its custom-designed chips, starting in 2025. According to a report from News18, this transition underscores Apple’s strategy to reduce dependency on third-party suppliers and tighten integration between its software and hardware products.
Apple’s Custom Chip Strategy Expands
Apple’s custom-designed chips, branded as “Proxima,” will power Wi-Fi and Bluetooth functions in future iPhones and smart home devices. Taiwan Semiconductor Manufacturing Co. (TSMC) is responsible for manufacturing the chips, as per the report. These new wireless components are expected to debut in 2025 for iPhones and later extend to other products, including iPads and Macs by 2026. The company also aims to incorporate these chips into an updated lineup of smart home devices, such as the Apple TV set-top box and the HomePod mini smart speaker, in 2024.
This decision aligns with Apple’s broader strategy of creating an in-house chip ecosystem, which has already led to the replacement of Intel processors in Macs with the M-series chips and significant reductions in reliance on Qualcomm for cellular modem technology. As Bloomberg highlighted, Apple’s custom modem chips are set to launch in 2024, reducing dependency on Qualcomm for mobile connectivity.
Impact on Broadcom and Wireless Standards
Apple’s relationship with Broadcom has been a longstanding one, with the tech giant accounting for approximately 20% of Broadcom’s revenue. Despite this shift, Apple will continue to source specific components, such as radio frequency filters for modems, from Broadcom. Additionally, the companies are collaborating on parts for next-generation cloud server chips. However, the gradual transition away from Broadcom for Wi-Fi and Bluetooth chips represents a significant challenge for the supplier.
The Proxima chip, Apple’s new venture into wireless technology, will reportedly support the latest Wi-Fi 6E standard, offering faster speeds and improved bandwidth compared to older iterations. This marks Apple’s continued focus on future-proofing its technology offerings. However, analysts note that Apple’s first-generation Wi-Fi chip may not initially match Broadcom’s performance in wireless technology, which could present challenges in maintaining user experience during the transition.
Risks and Rewards of Going In-House
Apple’s decision to develop its own Wi-Fi and Bluetooth components comes with potential risks. According to News18, while Apple has successfully integrated custom wireless parts into AirPods and Apple Watches, applying this technology to flagship products like the iPhone involves higher stakes. Any shortcomings in the performance or reliability of these chips could impact user satisfaction and device competitiveness.
Nonetheless, the potential rewards for Apple are substantial. By designing and controlling its wireless components, Apple can achieve deeper integration with its devices, optimize power efficiency, and ensure long-term cost savings. Additionally, owning the technology enables Apple to innovate faster and incorporate unique features that may not be possible with off-the-shelf components.
Apple’s Journey Toward Self-Reliance
This latest development is part of a larger trend within Apple to bring more component design and production in-house. The company’s transition to its M-series chips for Macs was a game-changer in the personal computing space, providing better performance and efficiency compared to Intel processors. Similarly, its move to create custom modems is expected to offer greater control over 5G connectivity and compatibility.
Apple’s efforts to become self-reliant extend beyond chips. The company has invested heavily in developing its supply chain and manufacturing capabilities, enabling it to manage costs and reduce dependence on external partners. The introduction of Proxima chips represents another milestone in this ongoing evolution.
As Apple forges ahead with its custom chip strategy, the industry will closely monitor the company’s ability to deliver high-quality wireless technology while maintaining its reputation for seamless user experiences. Meanwhile, competitors like Broadcom and Qualcomm will need to adapt to a market where one of their largest customers is becoming a direct competitor.