Broadcom Apple Agreement

Broadcom Inc. announced new component supply agreements for Apple Inc. devices, which have been released through mid-2023. $15 billion is a lot, but in the world of Big Tech, big deals are being done every day, so despite a few opportunities to read between the lines of this deal, as I suggested, it could just be a direct supplier deal, as Apple looks at its next request. However, I see a deeper connection between Broadcom and Apple, with the obvious possibility for Apple to acquire the Frontend RF business in order to fill a big void in its 5G plans. Apple certainly wants to control its destiny in 5G, which makes this step obvious, but time will tell if Apple takes the plunge. The San Jose, California-based chipmaker said it has entered into two multi-year agreements “for the supply to Apple of a number of high-performance wireless components and modules specified for use in its products.” That`s in addition to another similar deal Broadcom struck with Apple in 2019. The three deals could generate revenue of about $US 15 billion in the future, Broadcom added. Broadcom explains that these two new agreements were concluded in addition to an existing agreement with Apple, concluded last June. This agreement includes certain HF components and modules and the two new agreements announced today further strengthen the relationship between Broadcom and Apple. The agreements all apply to “Apple products released on the market during the three-and-a-half-year period from January 2020,” the chipmaker explains.

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