All iPhone XI and iPhone 9 handsets might use Intel modems
Feb 06, 2018, 14:10
In a curious turn of events, rumors say that Apple is turning to Intel to exclusively supply LTE modems for its iPhones from 2018 onward.
"There is speculation that Apple might drop Qualcomm altogether for its next generation phones and I think that's part of the reason the stock is down today", said Angelo Zino, an analyst from CFRA Research. At the time, Ming-Chi Kuo believed Apple would give about 30% of the orders to Qualcomm.
Speaking of KGI, analyst Ming-Chi Kuo also predicts that the next iteration of the iPhone will have Intel (NASDAQ:INTC) as the only cellular modem supplier, which would eliminate Qualcomm (NASDAQ:QCOM) from the supply chain. The recent move to Intel has become possible as Intel modems now support both CMA and GSM, which would allow iPhones to use Intel chips and work on all major networks. The news however, is a blow to Qualcomm, which for a while enjoyed exclusivity with Apple. Intel's previous chips lacked support for CDMA. In January 2017, Apple sued the chipmaker for allegedly overcharging chips, seeking $1 billion in damages.
Meanwhile, Qualcomm is already facing a fine of $773 million by Taiwan's Fair Trade Commission for having engaged in antitrust and monopolistic practices. Presently Apple and Qualcomm are embroiled in a legal tussle and Qualcomm has charged Apple of sharing proprietary code with Intel. Qualcomm had also sought a ban on iPhone X in the US. It is rumored that benchmark tests have shown that Qualcomm chips performed better than Intel hardware. After losing the iPhone business, Qualcomm will be more aggressive in securing orders from Chinese smartphone vendors. As of now, there's no certainty whether Intel can supply Apple such chips.
It's worth noting that KGI doesn't rule out the return of Qualcomm in future; this could happen probably after some concessions in the lawsuit settlement. Kuo believes Apple prefers to diversify its supplier base and it wouldn't want to rely entirely on Intel for long. It may force Apple to go back to Qualcomm.
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