Apple used billions of dollars and thousands of engineers on a ‘spectacular failure,’ WSJ reports

Apple CEO Tim Cook holds up a new iPhone 15 Pro during an Apple event on Sept. 12, 2023, in Cupertino, Calif.

For years, Apple has built its iPhone technology to be lighter, faster and — importantly to the nation’s most valuable company — designed in-house. But according to a Wednesday article in the Wall Street Journal, the firm just saw a massive engineering project come up utterly short.

Cupertino-based Apple has spent billions of dollars and hired thousands of engineers to build its own wireless carrier connection chip, or modem chip, for its flagship iPhone products, the Journal reported. Citing “former company engineers and executives familiar with the project,” most of whom were anonymous, the report says that the firm had planned to include the chip in this month’s iPhone 15 rollout but that tests late last year found the chip was far too slow and far too big.

So, the hardware and software giant will continue to rely on Qualcomm, a San Diego-based chipmaker that dominates the modem chip market and serves as one of Apple’s most important suppliers. Qualcomm announced Sept. 11 that it would keep supplying Apple with its modem systems through 2026; the deal brings Qualcomm billions of dollars a year, CNBC reported.

But while lucrative, the relationship has not fostered much goodwill between the firms, according to the Journal, which called their feud “one of the ugliest corporate battles in history” in a 2019 piece. For years, Apple has taken issue with

Qualcomm charging twice for each phone produced: once to license its patents and again to use the physical chip. The firms have bickered over patents in open court and traded barbs in the press.

Apple wanted to quit its reliance on Qualcomm, the Journal reported, so after a command from CEO Tim Cook in 2018, the phonemaker poured money into designing an in-house modem chip. An Apple-designed modem chip would boost profits on the iPhone, the firm’s most popular device, by eliminating the company's need to buy the part from an external supplier.

In Wednesday’s headline, the Journal called Apple’s effort to build the modem chip a “spectacular failure.”

The Journal reported that the chip project has been riddled with unrealistic goals, blown deadlines, mixed priorities and inexperienced leadership. Executives reportedly didn’t originally realize how difficult it was to make modem chips, which must work with various cellular providers at varying degrees of connection strength to reliably provide data and call services, per the outlet.

“Cellular is a monster,” former Qualcomm executive Serge Willenegger told the Journal, adding that Apple’s delays suggest the firm didn’t expect building a modem to be so complex.

A former Apple wireless director, Jaydeep Ranade, told the outlet plainly, “Just because Apple builds the best silicon on the planet, it’s ridiculous to think that they could also build a modem.” Both men left their firms in 2018, which is when, according to Journal source and former Apple human resources executive Chris Deaver, the company began work on the modem chip.

Billions of dollars went into the project, according to the Journal, including to buy up Intel’s 2,200-worker modem business and hire ex-Qualcomm employees. But prototype tests late last year went badly, the newspaper reported: Apple’s chips were about three years behind Qualcomm’s best — too slow, too big and “prone to overheating.”

The outlet reported that Apple, which has massive stores of cash and a major incentive to build the new chip, will keep working on the project.

Apple did not respond to SFGATE’s request for comment.

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