Qualcomm has announced that it will be supplying Apple with 5G modems for its smartphones until 2026. This comes as a surprise, as it was previously expected that Apple would develop its own 5G modem by 2024.

The partnership between Qualcomm and Apple will benefit Qualcomm’s handset business, which recorded $5.26 billion in sales in the last quarter. It will also help offset the potential loss of a significant customer, as Apple accounted for about 21% of Qualcomm’s revenue in fiscal year 2022.

Although Apple has been working on its own modems and even acquired Intel’s smartphone modem division in 2019, analysts believe that Apple may find it challenging to completely move away from Qualcomm’s chips due to their complexity.

In addition to supplying modems, Qualcomm also earns revenue from Apple through cellular licensing fees. In 2022, the licensing fees amounted to approximately $1.9 billion.

Qualcomm and Apple had previously been engaged in a legal battle over royalties, but they reached a settlement in 2019. As part of the settlement, Qualcomm continues to collect royalties from Apple under a six-year agreement.

It is worth noting that Qualcomm expects to supply only 20% of the modems needed for Apple’s 2026 smartphone launch, suggesting that the business with Apple may eventually decline. However, Qualcomm has not updated its guidance to account for the Apple sales at this time.

Tomorrow, Apple is expected to unveil its new iPhones, likely called the iPhone 15, which will feature Qualcomm modems.

CNBC has contacted Apple for comment and will provide updates on this story as they become available.