Apple to further self-reliance by developing own bluetooth, wi-fi chips

By Mark Gurman

 

Apple Inc.’s ambitious plan to create in-house components for its devices will include switching to a homegrown chip for Bluetooth and Wi-Fi connections starting next year, a move that will replace some parts currently provided by Broadcom Inc. 

The chip, code-named Proxima, has been in development for several years and is now slated to go into the first products in 2025, according to people familiar with the matter. Like Apple’s other in-house chips, Proxima will be produced by partner Taiwan Semiconductor Manufacturing Co.

 

The transition is separate from Apple’s highly anticipated shift from Qualcomm Inc. cellular modems — details of which Bloomberg News reported last week — but the two parts will eventually work together.

 

Apple’s goal is to develop an end-to-end wireless approach that is tightly integrated with its other components and more energy-efficient, said the people, who asked not to be identified because the initiative hasn’t been announced. Representatives for Cupertino, California-based Apple and Palo Alto, California-based Broadcom declined to comment.

 

Shares of Broadcom fell as much as 3.9 per cent to $175.99 after Bloomberg News reported on the transition. Apple rose less than 1 per cent to $248.53 as of 1:23 p.m. in New York.

 

Apple is one of Broadcom’s biggest customers, accounting for roughly 20 per cent of revenue. Broadcom is scheduled to report its latest quarterly results after the market closes Thursday.

 

The two new components mark a major breakthrough for Apple’s hardware technologies group. That team, led by Senior Vice President Johny Srouji, previously created the main processors for iPhones, iPads and Mac computers.

 

Now Apple will have domain over how devices connect to cellular networks and Wi-Fi hubs — areas where other chipmakers have long had an edge. That should give it more control over the user experience and pave the way for new device formats, such as thinner iPhones and wearable technology. 

 

Apple will begin rolling out the combined Wi-Fi and Bluetooth chip as part of new home devices scheduled for next year, including refreshed versions of its TV set-top box and HomePod mini smart speaker. It also aims to bring the component to iPhones later next year and to the iPad and Mac by 2026. Bloomberg News first reported on plans for the new chip in January 2023. 

 

Though the move will displace Broadcom’s combined Wi-Fi and Bluetooth component in Apple devices, the supplier will still provide a part known as a radio frequency filter for modems, Bloomberg News reported. Apple is also working with Broadcom on aspects of next-generation cloud server chip, according to a report this week from the Information.

 

The Proxima chip won’t be Apple’s first foray into the wireless space. It has long designed custom wireless components for AirPods and Apple Watches. But adopting an in-house design for such a critical component in its most important products — iPhones, iPads and Macs — presents risks for Apple.

 

The Wi-Fi and Bluetooth chip ensures that Apple devices can get online via wireless networks and pair to peripherals like headphones and speakers. Those are key parts of the Apple experience, and customers are likely to notice if problems arise.

 

Broadcom is a market leader in wireless parts, and Apple may not be able to match that company’s capabilities with its first-generation Wi-Fi chip. Still, the component will have support for the recent Wi-Fi 6E standard, which offers better bandwidth and increased speeds, the people said.

 

With a homegrown wireless chip in Apple’s smart home devices, the products will work more closely together and potentially synchronize data more quickly. The company is planning a significant smart home push next year: It aims to release a home hub device with artificial intelligence that can be placed on a table or mounted to a wall.

 

The company has also been developing its own standalone security camera that could pair to its other home devices.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)