Apple Doesn't Seem Interested in Broadcom's Cellular Division

With rumors flying that MediaTek or the Chinese government will be picking up Broadcom's cellular division, it seems unlikely that Apple will be interested.

Jun 28, 2014 at 8:00PM

I have long been interested in seeing Apple (NASDAQ:AAPL) acquire cellular IP in order to integrate it into its custom-designed A-series of processors for the iPhone and iPad. Qualcomm (NASDAQ:QCOM) -- which supplies most of the world's smartphone applications processors -- provides many of Apple's competitors (such as Samsung, HTC, and LG) with integrated processor and modem solutions, which means a potential efficiency edge over the Cupertino-based smartphone giant.

That said, though there is a pretty strong cellular team and IP available for sale, Apple still doesn't look like it wants to bite. 

There's value in designing custom processors
When Broadcom (NASDAQ:BRCM) threw in the proverbial towel on its cellular efforts, a pretty strong argument could have been made that Apple was a likely buyer, as it has shown a tendency to want to keep as much non-trivial silicon as possible in-house. 

Keep in mind that the reason Apple builds its own A-series processors is that it can optimize the design of the system on a chip to deliver maximum performance to the end user, because Apple knows what software runs on iOS devices and can tailor its micro-architectures to that software.

Cellular is a different animal
When it comes to cellular basebands and RF, there's no chip vendor out there today with more know-how and experience than Qualcomm. As a result, Apple buys standalone cellular modems exclusively from Qualcomm. Though many companies have hoped to be a second source, none of these contenders has been able to deliver.

If Apple were to build its own cellular modem, it would do so with the intention of differentiating beyond what an off-the-shelf Qualcomm modem could provide.

How realistic is it that Apple would be able to do a product that is even equal to -- let alone better than -- what Qualcomm offers today? With the Broadcom assets along with a lot of money, Apple could eventually do it, but it would be expensive and difficult.

So, no cellular for Apple, it seems
Although it seems likely that Apple would benefit from a power efficiency boost if it were to integrate a cellular baseband into its A-series chips, this baseband would need to be best-in-class for Apple to actually go ahead and do that.

So, given that Qualcomm is well ahead of what any vendor on the market has technologically, any benefits of integration would probably be more than offset by IP that just isn't yet up to snuff. 

Foolish bottom line
The mystery of what will eventually happen to Broadcom's cellular business should be answered pretty soon -- expect an update at the company's late-July earnings call. However, given the various rumors that have been flying around (MediaTek and, more recently, the Chinese government as buyers), it doesn't look like Apple is interested.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple and owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers