The 2026 iPhone lineup could divest further from Qualcomm as Apple increases use of its in-house C-series modem, though Qualcomm blames supply constraints on a faster-than-expected transition.
Qualcomm and Apple's relationship has been in question since Apple's release of an in-house C-series modem. While a contract between the companies is set to end in March 2027, Qualcomm is looking to use AI data centers to replace the revenue provided by Apple.
According to a report from Reuters, Qualcomm CEO Cristiano Amon says that revenue from Apple will decline more quickly starting in the fourth quarter as due to supply constraints. The share of components used in the iPhone 18 will fall well below Qualcomm's earlier estimate of 20%.
Amon is blaming this change on supply availability, which could be a boon for Apple. As the iPhone and other Apple products look to get away from Qualcomm modems, a supply chain shortage offers an excellent loophole for escaping a contract earlier than expected.
Qualcomm will also be raising prices due to supply chain shortages and component cost increases.
While there is no way of knowing until the iPhone 18 lineup is announced in September, it seems these comments could suggest that Apple will have a C-series modem in more of the lineup than previously expected. The Apple in-house modems have only been used in the iPhone Air, iPad Pro iPad Air, iPhone 16e, and iPhone 17e so far.
If Apple is able to include C-series modems in more of the iPhone 18 lineup than previously expected, that'll be a big win for Apple. Qualcomm, on the other hand, is already looking at new revenue streams.
The Qualcomm CEO suggests that Apple's revenue has been effectively replaced by its entry into the AI data center market. The company forecasts $5 billion in revenue from AI data centers by 2027 and $15 billion by 2029.
These incredible numbers are what has become the norm when companies forecast revenue from AI products. What isn't mentioned here is how this might change if the AI bubble deflates or pops in the next year.
