An analyst claims that contrary to rumors, Apple may not be interesting in taking on the titanic task of designing and developing a baseband chip for the iPhone in-house.

teardown 111013 2 In house development of iPhone baseband chip a herculean task

Currently Apple sources baseband chips designed by Qualcomm and manufactured by TSMC. Moving the process in-house would not only save it money, but would also allow it to design the chip that works best with its custom processors. On paper this makes sense but there are a number of factors that the company must first consider before it takes this step.

Even though the rumor claimed that Apple had already put together a new engineering team just for this purpose, it wasn’t expected to start using its own baseband chips in the iPhone until 2015 at the very least. Apple has recently hired a lot of talent for RF chip design, thus corroborating rumors that it might be looking to move baseband chip design and development in-house. Though the analyst believes that it may take Apple up to five years just to come up with a custom chip, even though it has the ability to hire all the talent that it needs.

Brian Modoff, an analyst with Deutsche Bank, writes in a note to investors that the issue Apple would face in developing the custom baseband chip wouldn’t have anything to do with the money it may have to spend. The issue he believes is time. Modoff estimates that it may take Apple five years at the very least, even if it works with a team of 1,000 engineers to accomplish this “herculean” task. So it may be better off by sourcing them from Qualcomm. He isn’t the only analyst who thinks that this will be too much for Apple. JP Morgan’s Rod Hall had similar comments in his note to investors, terming the possibility of in-house baseband chip development and design as “notoriously difficult.”

Modoff predicts that the rumors might be absolutely right about Apple’s intentions of building custom baseband chips for the iPhone. He thinks the company might only be working to better integrate existing chips with its apps processor. Modoff also predicts that Apple might be working on its own internal Wi-Fi chipset.

There are still several dozen positions open at Apple for the engineering team, so it can’t be said for sure right now that the company’s future plans are. Apple doesn’t comment on rumor and speculation about its products, and it keeps quiet even more so about the manufacturing process.

Source: Apple Insider