Apple‘s (AAPL) efforts to replace Qualcomm (QCOM) as a supplier of 5G modem chips for its iPhone have hit a developmental snag, a prominent Apple stock analyst said Tuesday. Qualcomm stock rose on the news.
In a Twitter thread, TF International Securities analyst Ming-Chi Kuo said Apple appears to have “failed” in its internal development of a 5G modem chip. That means Qualcomm will remain the exclusive supplier of 5G iPhone modem chips through the second half of 2023, he said. Qualcomm had previously estimated that it would supply just 20% of those iPhone chips in late 2023.
Apple did not respond to a request for comment on the report.
“I believe Apple will continue to develop its own 5G chips,” Kuo said. “But by the time Apple succeeds and can replace Qualcomm, Qualcomm’s other new businesses should have grown enough to significantly offset the negative impacts caused by the order loss of iPhone 5G chips.”
Qualcomm Stock Jumps
The development is likely to drive Qualcomm revenue and earnings estimates higher for 2023 and early 2024, Kuo said.
On the stock market today, Qualcomm stock rose 3.5% to close at 131.60. Apple stock dropped 3% to 137.44 in an overall down day for stocks.
Qualcomm is shifting its business from making wireless chips mostly for smartphones to making them for a host of devices for the Internet of Things. That includes chips for automobiles, Arm-based PCs, and virtual reality and augmented reality headsets.
Qualcomm stock ranks fifth out of 33 stocks in IBD’s fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 72 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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