Apple (NASDAQ:AAPL) has made a lot of progress with its custom A-chip designs over the past couple of years. Now the Mac maker may be looking to broaden its chip expertise. A new report says that Apple is preparing to start research and development on baseband processors, which would likely be for its 2015 iPhone models. Baseband processors are what manage radio functions such as cellular connectivity, which make them one of the most important components in any modern smartphone.
As the current exclusive baseband supplier to Apple, Qualcomm (NASDAQ:QCOM) could potentially lose out if the rumors prove true. Apple contributes a hefty amount of revenue, although most of that is licensing related to cellular technology. However, developing cellular baseband technology is a monumental task, and Qualcomm's direct competitors have not been able to catch up after years of development and billions of dollars invested.
In this video from Tuesday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu discuss Apple's latest rumor.