Apple Cancels In-House 5G Modem After $8 Billion Failure
Apple terminates its decade-long project to build a proprietary 5G modem, abandoning plans to replace Qualcomm components in iPhones. The cancellation axes a 2,400-person team in San Diego and Cupertino, with most engineers reassigned to other silicon initiatives. The move locks Apple into extended Qualcomm supply agreements through at least 2029.
The in-house modem, internally codenamed Sinope, repeatedly missed performance targets for power efficiency and multi-band support. Testing revealed the chip consumed 40 percent more battery under 5G SA networks than Qualcomm’s X75 in side-by-side iPhone 17 prototypes. Heat dissipation issues pushed peak skin temperatures above 48 °C during sustained mmWave transfers, violating Apple’s thermal limits.
Apple spent more than $8 billion on the effort since acquiring Intel’s modem business for $1 billion in 2019. Annual burn reached $1.2 billion in 2025 alone, covering 150 patent filings and custom RF transceiver development. Despite licensing 6,000 Qualcomm patents, Apple failed to match Snapdragon X-series integration with application processors.
Johny Srouji, Apple’s senior vice president of hardware technologies, informed staff the project no longer aligned with roadmap priorities. Remaining modem IP transfers to the Wireless Technologies group, focusing on Wi-Fi 8 and ultra-wideband enhancements instead. Apple extends its Qualcomm license with a new six-year deal announced December 11, covering 5G through iPhone 21.
Qualcomm shares jumped 9 percent on the news, adding $22 billion to market capitalization. The agreement includes volume commitments guaranteeing Qualcomm at least 75 percent of Apple’s modem sockets through 2029, with pricing tiers locked 3 percent below 2024 rates. Apple retains a clause allowing partial substitution if a viable alternative emerges.
Analysts estimate the cancellation saves Apple $900 million annually in R&D while delaying full vertical integration. The company now accelerates development of a combined Wi-Fi/Bluetooth/5G module using TSMC’s 2 nm process for 2028 deployment. That chip will still rely on Qualcomm baseband cores under the extended license.
Supply chain sources confirm Apple already canceled tape-outs scheduled for early 2026. Foundry bookings at TSMC originally reserved for Sinope redirect to A-series and M-series processors. The shift frees 12 percent of Apple’s advanced-node capacity at the Taiwanese manufacturer.
Apple previously targeted modem independence to reduce component costs by 30 percent and enable tighter integration with its Secure Enclave. Those savings now remain unrealized, preserving Qualcomm’s gross margins above 60 percent on iPhone modems. The partnership extends to satellite connectivity, with Qualcomm supplying hardware for expanded Emergency SOS and roadside assistance features.
The decision marks the largest hardware cancellation in Apple history by expenditure. Earlier failures, including the AirPower charging mat and electric car project, cost under $3 billion combined. Leadership now prioritizes on-device AI silicon and next-generation display technologies over cellular independence.
Qualcomm confirms the deal terms include continued collaboration on 6G standards development starting 2026. Apple secures early access to reference designs, maintaining influence despite abandoning its own baseband roadmap. The agreement effectively postpones any third-party modem competition inside iPhones for the remainder of the decade.
