iPhone 7 Will Have Intel Inside: Why Is Apple Replacing Qualcomm Chips?
Apple has decided to tap Intel as a supplier for modem chips for the next iPhone, a
move that can be considered a big win for Intel.
The Intel modem chips will be replacing ones manufactured by Qualcomm, Bloomberg
reported. However, not all Qualcomm modem chips are being replaced by Intel ones
across all versions of the next iPhone.
reported. However, not all Qualcomm modem chips are being replaced by Intel ones
across all versions of the next iPhone.
Orders from Apple represent the first major win for an Intel mobile chip program that
had struggled for relevance and racked up operating losses. The shot in the arm for
the world’s largest chipmaker further dents the dominance of Qualcomm in baseband processors that connect phones to networks and convert radio signals into voice and
data. While Qualcomm is losing some orders, it’s retaining a major chunk of Apple’s business, offsetting concern that one of its largest customers would drop it completely.
had struggled for relevance and racked up operating losses. The shot in the arm for
the world’s largest chipmaker further dents the dominance of Qualcomm in baseband processors that connect phones to networks and convert radio signals into voice and
data. While Qualcomm is losing some orders, it’s retaining a major chunk of Apple’s business, offsetting concern that one of its largest customers would drop it completely.
Intel reversed earlier declines and rose as much as 0.7 percent, to $32.15.
The shares declined 7.3 percent this year through Thursday. Qualcomm fell as much
as 2.9 percent to $53.40. It had been up 10 percent so far this year.
The shares declined 7.3 percent this year through Thursday. Qualcomm fell as much
as 2.9 percent to $53.40. It had been up 10 percent so far this year.
According to Bloomberg’s sources, Apple will be using Intel modem chips for AT&T
versions of the next iPhone, along with some versions for overseas markets. For
Verizon versions, Apple will stick with Qualcomm as the supplier for the component,
along with models that will be sold in China.
versions of the next iPhone, along with some versions for overseas markets. For
Verizon versions, Apple will stick with Qualcomm as the supplier for the component,
along with models that will be sold in China.
The sources looked to remain anonymous due to the plans not yet publicized by Apple. Representatives for the companies involved in the matter refused to issue comments.
If the report is true, this will not be the first time that a flagship smartphone will have different components in models across different regions. Samsung’s Galaxy S7, for example, is powered by the Qualcomm Snapdragon 820 processor in the United States, but for models in Asia and Europe, the device packs Samsung’s proprietary Exynos chipset.
The decision to tap Intel as another supplier of modem chips could be for diversification on the end of Apple. Having multiple suppliers will prevent Apple from finding itself in a position of being powerless in case a supplier decides to increase prices or falls short from providing components.
Intel could also have promised Apple discounts on the modem chips, with the company looking to finally enter the iPhone game after ceding supplier status for the iconic smartphone to other manufacturers.
The iPhone 7 will be the first major flagship smartphone that will be featuring an Intel wireless chip, and it could not have come at a better time to rejuvenate Intel’s business. The company has been struggling, with operating losses being incurred, and the order from Apple would give it a shot in the arm that it really needed.
The move by Apple to buy some chips from Intel has been rumored for quite a while. Qualcomm CEO Steve Mollenkopf acknowledged during a call with analysts in April that one of its “major customers” would be seeking a second supplier for some of its chips. Most market watchers believed that customer to be Apple.
The company said last month that it was dropping its Atom processors for mobile devices as part of its restructuring. While it has dropped its business for creating processors for smartphones, it has kept its modem chip business as it looks to be part of the near-future transition into 5G networks.
Which is better?
In terms of performance, Qualcomm is widely acknowledged to have more advanced modems than Intel. In January, Qualcomm announced its X16 LTE modem, which the company claims supports download speeds of almost 1Gbps. Intel’s latest XMM7480 reaches download speeds of 450Mbps.
But modem performance may not make a big difference, given that carriers sometimes throttle network speeds.
For Apple, choosing a new modem could mean design changes and getting its phones requalified for networks in multiple countries, making it no small decision, said Nathan Brookwood, principal analyst at Insight 64.
It didn’t have many alternative suppliers to choose from. Qualcomm and Intel lead the market, with Mediatek’s technology lagging behind.
By working with both Qualcomm and Intel, Apple will be best positioned to switch to 5G as soon as either company is ready to deliver, Brookwood said. 5G will bring speed improvements as well as better support for the Internet of Things and smart home devices.
Apple may also be looking to use carrier aggregation, which can greatly boost wireless network speeds.
Eventually, Apple may create its own modem chip to integrate with its A-series processors, much as Samsung does today. That can help boost performance and extend battery life, but raises challenges when the combined chip has to be qualified for networks worldwide.
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