Qualcomm modem chips top Apple C1

A Qualcomm-commissioned study by Cellular Insights found that Apple's new in-house C1 modem chip, used in the iPhone 16e, underperformed compared to Qualcomm's Snapdragon X80 and X75 5G modems in real-world network conditions, particularly in weaker signal environments. The study, conducted on T-Mobile's 5G network in New York City, showed Android devices with Qualcomm chips achieving 34-35% faster downlink and 81-90% faster uplink speeds in mid to far cell locations. This report surfaces as Apple aims to replace Qualcomm modems with its own by 2027, despite Qualcomm's efforts to diversify its revenue streams.

Analysis

A Qualcomm-commissioned study by Cellular Insights indicates a significant performance advantage for Qualcomm's Snapdragon X80 and X75 5G modem chips over Apple's internally developed C1 modem, utilized in the iPhone 16e. Testing on T-Mobile US's sub-6GHz SA 5G network in New York City revealed that Android devices equipped with Qualcomm modems achieved 34.3% to 35.2% faster downlink speeds and 81.4% to 90% faster uplink speeds compared to the iPhone 16e, particularly under deteriorating signal conditions and when the network shifted from TDD to FDD in poor RF environments. While performance was comparable in ideal, near-cell conditions, the disparity grew in more challenging real-world scenarios. This finding, carrying a mildly positive overall sentiment (score 0.2) but a notable market impact score of 0.6, is particularly relevant given Apple's stated ambition to replace Qualcomm modems with its in-house technology by 2027, a project initiated around 2020 and bolstered by the $1 billion acquisition of Intel's modem business in 2019. The per-ticker sentiment reflects this, with Qualcomm (QCOM) at a positive 0.6 and Apple (AAPL) at a negative -0.7. The study acknowledged a limitation in its iPhone analysis due to a lack of chipset-level information on iOS, relying on application throughput, yet still found the performance difference 'tangible and observable.' For Qualcomm, which has historically derived approximately 20% of its revenue from Apple, these results may underscore its technological prowess as it simultaneously pursues revenue diversification into automotive and IoT sectors.

Key Decisions for Investors

• Investors in Qualcomm (QCOM) should view these findings as potentially reaffirming the company's technological lead in 5G modems, which could mitigate concerns over Apple's insourcing plans and support continued market share in the premium tier, especially as Qualcomm diversifies its revenue streams.
• For Apple (AAPL) investors, this report highlights execution risks in its vertical integration strategy for critical components; closely monitor future developments and independent benchmarks of Apple's modem performance, as persistent underperformance could delay insourcing timelines, impact user experience, or necessitate continued reliance on external suppliers.