Broadcom Signs Deal to Supply Wireless Components to Apple

Chipmaker Broadcom said on Thursday it has entered into two multi-year agreements with Apple for the supply of wireless components used in its products. The agreements, "2020 SOWs", are in addition to the existing ones for supplying radio frequency components and modules to the iPhone maker and together could generate as much as $15 billion in revenue for Broadcom.

Broadcom revealed the deal in a filing with US Securities and Exchange Commission (SEC). It is unclear exactly what the company will be supplying to Apple. It already sells several components to Apple, including radio frequency chips that allow iPhones, iPads and Apple Watches to connect to wireless networks, as well as other components that let Apple's devices connect to Wi-Fi networks, CNET reported.

Shares of the chipmaker rose 2 percent in extended trading.

According to a report by Bloomberg, Broadcom put its radio frequency chip unit up for sale last year. Thursday's disclosure lets potential acquirers know that they're buying into a substantial business relationship with Cupertino, California-based Apple.

Meanwhile, Apple is preparing to reportedly launch a new low-cost iPhone model in March this year, in addition to three fresh iPhone models in late-2020. The new low-cost iPhone will succeed the iPhone SE that debuted back in 2016.

January 24, 2020