Apple's Patent License Renewal Can't Save Qualcomm From Modem Revenue Decline

Qualcomm shares (QCOM) edged lower on Wednesday morning to around $194, despite Apple's renewal of its global patent license agreement with the company. The renewal takes effect on April 1, 2027, but Qualcomm failed to benefit from the news as it faces a sharp decline in modem revenue from Apple due to the tech giant's shift towards in-house production.

The custom chipmaker is expected to see its share of the next iPhone launch drop well below its earlier forecast of 20%, according to Qualcomm. This is because Apple has been working on designing its own cellular modems, with the release of the iPhone 163 featuring the company's custom C1 modem in February 2025. The latest iPhone models also feature Apple's next-generation cellular modem system, C2.

However, the patent license renewal still matters as it shows that Apple needs to license Qualcomm's underlying cellular patents to connect its devices to global networks. This keeps a key revenue stream open for Qualcomm, with its licensing business bringing in about 17% of total revenue during fiscal Q3 2026, amounting to $1.47 billion.