Broadcom Shares Plummet as Apple's In-House Chip Ambitions Threaten Future Revenues

Recent developments surrounding Broadcom have caught the attention of industry analysts and investors alike. On March 6, Broadcom's shares dropped by 6.33%, marking a new low since December 2024. This decline reflects mounting concerns over potential shifts in technology partnerships, especially with major companies like Apple.

Apple has long relied on Broadcom for WiFi and Bluetooth chips, integrated into many of its devices. However, it appears Apple is gradually moving towards self-reliant solutions. With the successful internal development of the C1 modem chip and plans for the C2 and C3 to compete with Qualcomm, attention now shifts to Broadcom's role in Apple's hardware ecosystem. Apple is reportedly working on a new network chip, codenamed Proxima, which could replace Broadcom's contributions.

The Proxima chip is expected to support WiFi 6E, WiFi 7, and Bluetooth standards, with potential applications across various Apple products, including HomePod mini, Apple TV, iPad, and even future iPhone models. This potential internal shift reflects Apple's strategy to consolidate critical technology in-house, a move believed to enhance compatibility across its offerings while controlling costs associated with external suppliers.

The implications of these developments for Broadcom are significant. Should Apple successfully transition to self-developed connectivity components by 2026, as anticipated, Broadcom's substantial revenue from these chipsets could face pressure. This potential transition underscores the evolving landscape of supplier and client dynamics within the tech industry, highlighting the crucial role of strategic foresight in maintaining competitive advantage.