Apple's newly launched iPhone 18 Pro series and iPhone Duo foldable phones come equipped with Apple's cutting-edge baseband chip, the C2. Notably, only the U.S. version of the iPhone 18 Pro Max utilizes Qualcomm's X80 chip.

Adding to the intrigue, Apple's existing agreement with Qualcomm is set to expire in 2026, leading to speculation that Apple will cease cooperation with Qualcomm next year and fully transition to its self-developed baseband chips.

During Qualcomm's recent earnings call, CEO Cristiano Amon hinted that by 2027, Apple is anticipated to cease purchasing baseband chips from Qualcomm.

Contrary to expectations, Qualcomm has recently revealed that it has extended a global patent licensing agreement with Apple. This agreement will commence on April 1, 2027, though Qualcomm has kept the duration under wraps.

This implies that, even with its proprietary baseband chips, Apple will still be obligated to dutifully (a more natural English expression than "good boy") remit patent fees to Qualcomm, thus remaining within Qualcomm's grasp.

What's the reason behind this? It's actually straightforward: Qualcomm boasts an extensive portfolio of patents in 3G, 4G, and 5G technologies. While Apple is free to forgo Qualcomm's baseband chips, it cannot sidestep the utilization of Qualcomm's patents.

As illustrated in the accompanying figure, Qualcomm's patent dominance in 3G is evident. Although its share has diminished in 4G and 5G, it remains substantial.

Apple, on the other hand, has not made significant strides in communication patents. Consequently, Apple's baseband chips and phones will inevitably incorporate a plethora of Qualcomm's patents.

Furthermore, Qualcomm's 8% share in 5G should not be underestimated. The potency of Qualcomm's 5G patents lies in their 'quality' rather than sheer quantity. Qualcomm's 5G patents concentrate on core implementation layers such as modulation, channel coding, and radio frequency, which are nearly insurmountable for all phone manufacturers, including Apple.

Thus, even with its own baseband chips, Apple only addresses the 'hardware自制' (self-made hardware, but here "self-manufactured" or "proprietary" might be a more natural English fit in context) aspect. However, for phones to connect to 3G/4G/5G networks, they must adhere to these communication standards and utilize Qualcomm's patents, with the associated fees remaining non-negotiable. To steer clear of legal action from Qualcomm, Apple has no choice but to 'pay for tranquility'.

Moreover, Apple's previous attempts to use Intel chips and circumvent Qualcomm, even resorting to legal action, have proven futile. Hence, Apple has learned its lesson and is no longer engaging in direct confrontation with Qualcomm. After all, Apple can afford the fees.

Ultimately, for Apple, while the licensing fees are substantial, they represent an 'acceptable cost' when weighed against the iPhone's selling price and the potential risks of litigation, sales bans, and delays. Furthermore, once Apple has its own baseband chips, the licensing fees are expected to be lower than the previous scenario where it had to both purchase chips and pay for patents.