KGI: Intel might be exclusive modem supplier for 2018 iPhone lineup, Qualcomm iced out

Posted:
in iPhone edited February 2018
According to noted analyst Ming-Chi Kuo, Intel's baseband chips are expected to power communications across Apple's entire 2018 iPhone lineup, a supplier switch that, if true, would deal a major blow to market leader Qualcomm.




In a note to investors seen by AppleInsider, Kuo revised earlier predictions regarding 2018 iPhone component share, saying Intel could be Apple sole supplier of cellular modems for iPhone this year.

Previously, the analyst believed Qualcomm would take a 70 percent share of baseband chip orders, with the remainder going to Intel.

Beyond advancements to Intel's chip technology, which supposedly meet Apple's performance standards, the firm's baseband solution supports CDMA2000 and dual SIM and dual standby (DSDS), making it ideal for a next-generation handset. In addition, Intel is offering more competitive component pricing as a market upstart.

Interestingly, Intel's modem performance has in the past been a topic of contentious debate. Qualcomm itself got in on the action last year, alleging in court filings that Apple intentionally slowed Qualcomm baseband chips to reach parity with slower Intel silicon. Whether the disparity in performance has been rectified is at this point unclear.

Kuo also points to Apple's ongoing legal battle with Qualcomm, saying an iPhone exclusivity pact could force the chipmaker into a diminished bargaining position. By allocating orders for 2018 iPhones -- and perhaps future devices -- to Intel, Apple would apply pressure on the already embattled Qualcomm, which currently faces decreased licensing revenue as a result of Apple's decision to withhold royalty payments until the broad-reaching litigation is settled.

Whether Qualcomm will fall back into the Apple fold remains to be seen, Kuo says. There is a possibility that Intel might not deliver on performance promises, for example, and Apple has traditionally sought diversification in its supply chain.

To make up for the potential order shortfall, Kuo believes Qualcomm will aggressively seek out sales from Chinese smartphone manufacturers.

Qualcomm is already hurting from a protracted legal barrage that began when Apple leveled a nearly $1 billion complaint alleging the firm participates in anticompetitive practices and charges excessive royalties. The chipmaker is also the subject of international trade probes and was recently slapped with a $1.2 billion fine from the EU for making illegal payments to Apple in a bid to secure component orders.

In an earnings report last week, Qualcomm recorded a 96 percent drop in operating profit due in large part to Apple's payment stoppage, a decision that trickled down to partner suppliers.

Kuo is not the first to spin a Qualcomm-free iPhone narrative. Last year, reports claimed Apple was designing iPhones and iPads without Qualcomm modems after the chipmaker denied access to key evaluation software. Another report said Apple and Intel engineers were tightly engaged on 5G modem designs set to debut in a future iPhone iteration.
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Comments

  • Reply 1 of 38
    I think Apple is helping Intel develop its modems.
    Qualcomm shot its own feet by biting the hands that feed it.

    deepinsiderGeorgeBMacAviesheknetmagewatto_cobrajony0
  • Reply 2 of 38
    If the QCOM chips used in iPhones is superior to the one from Intel, then I hope the company resolves its issues with Apple sooner rather then later and returns to the fold. 
  • Reply 3 of 38
    Rayz2016Rayz2016 Posts: 4,730member
    To make up for the potential order shortfall, Kuo believes Qualcomm will aggressively seek out sales from Chinese smartphone manufacturers. 

    Mmm.

    Given that Qualcomm charges royalties based on the selling price of the phone, I’m not sure this is going to cover much of what they’re losing. 
    bkkcanuckGeorgeBMacAvieshekwilliamlondonStrangeDaysnetmagetjwolfmejsricwatto_cobra
  • Reply 4 of 38
    noted crystal ball gazer and soothsayer Ming-Chi Kuo

    There fixed it for you.

    On this topic... well Duh! Hasn't this been on the cards for a while now? It does not need a noted analyst [cough-cough] to forecast this. Pretty well anyone with half a mind on the Mobile Tech space could have said this very thing months ago. some even did say it yet he's still given credit for 'stuff'.
    Bah Humbug!

    edited February 2018 brakkenmuthuk_vanalingamcharlesgreswilliamlondonradarthekatStrangeDaysrepressthisdacharwatto_cobrajony0
  • Reply 5 of 38
    prolineproline Posts: 194member
    bluefire1 said:
    If the QCOM chips used in iPhones is superior to the one from Intel, then I hope the company resolves its issues with Apple sooner rather then later and returns to the fold. 
    The cellphone network is rarely able to achieve the top speeds possible with existing chips, and when those tops speeds are achieved there is little need for anything faster. There is therefore not a huge rush at the moment making this an excellent time for Apple to take their time and make sure that Qualcomm's attitude is properly adjusted. Another year at Intel speeds will be just fine. 
    williamlondonrandominternetpersonnetmagewatto_cobrajony0
  • Reply 6 of 38
    Qualcomm don’t deserve Apple’s business. Their double-dipping practice of charging royalties for “use of Qualcomm technology” after already being paid for the chips shouldn’t even be legal. To Computer Hell with them.
    GeorgeBMaccrossladradarthekatnetmagewatto_cobrajony0
  • Reply 7 of 38
    mike54mike54 Posts: 347member
    Well at least with one supplier the performance will be consistent across the board. Complaints from comparing speeds will be reduced.
    watto_cobra
  • Reply 8 of 38
    noted crystal ball gazer and soothsayer Ming-Chi Kuo

    There fixed it for you.

    On this topic... well Duh! Hasn't this been on the cards for a while now? It does not need a noted analyst [cough-cough] to forecast this. Pretty well anyone with half a mind on the Mobile Tech space could have said this very thing months ago. some even did say it yet he's still given credit for 'stuff'.
    Bah Humbug!

    So far, he is by far the most reliable Apple furniture teller.
  • Reply 9 of 38
    Can someone enlighten me if Apple can just buy Qcom? I mean when 2 companies are in law battles?
  • Reply 10 of 38
    viclauyyc said:
    Can someone enlighten me if Apple can just buy Qcom? I mean when 2 companies are in law battles?
    Why buy a bankrupting company? If this goes Apple’s way, it will have access to Qualcomm technology with a fair licensing agreement, while at the same time, keeping Intel, for supplier diversity.

    Buying Qualcomm will be a ill-advised use of money. All Apple would accomplish is buying into liability from various entities suing or investigating its practices! Also, a good slice of the money would be spent providing golden parachutes for Qualcomm’s top brass... you know, the geniuses who caused this whole mess.

    So no, not worth saving! Let it heal itself, with a major management and business shake up, or crash and burn! For all we know, this Intel deal may be a stopgap measure. An Apple baseband modem is on the tea leaves for a long time now.
    deepinsiderAvieshekemoellerwatto_cobra
  • Reply 11 of 38
    noted crystal ball gazer and soothsayer Ming-Chi Kuo

    There fixed it for you.

    On this topic... well Duh! Hasn't this been on the cards for a while now? It does not need a noted analyst [cough-cough] to forecast this. Pretty well anyone with half a mind on the Mobile Tech space could have said this very thing months ago. some even did say it yet he's still given credit for 'stuff'.
    Bah Humbug!

    He is more accurate than a crystal ball gazer, but as accurate as you can probably get when you have inside information from the supply chain and try to put things together in a way that makes sense.  Yes, sometimes he may get things wrong... a few times really wrong... but he gets it right a high percentage of the time.  The difference between your guess and his forecast ... is that his is actually based on information... while yours would truly be a soothsayer guessing.

    If it is true, it could mean the end of Qualcomm since it becomes more likely shareholders will take the Broadcom hostile takeover as potentially the best of a bad situation.
    edited February 2018 williamlondon
  • Reply 12 of 38
    Rayz2016Rayz2016 Posts: 4,730member
    viclauyyc said:
    noted crystal ball gazer and soothsayer Ming-Chi Kuo

    There fixed it for you.

    On this topic... well Duh! Hasn't this been on the cards for a while now? It does not need a noted analyst [cough-cough] to forecast this. Pretty well anyone with half a mind on the Mobile Tech space could have said this very thing months ago. some even did say it yet he's still given credit for 'stuff'.
    Bah Humbug!

    So far, he is by far the most reliable Apple furniture teller.
    So that’s how he does it! 

    He predicts Apple’s future by reading the woodgrain in his office desk.  
    deepinsidermacseekerosmartormenajrwatto_cobra
  • Reply 13 of 38
    Broadcom & Qualcomm merger is close.
    watto_cobra
  • Reply 14 of 38
    wood1208wood1208 Posts: 1,990member
    If Broadcomm and Qualcomm merger talk breaks up (recent news, anti-competitive, merger may not approved} than the fight will drag on. Qualcomm is also squeezed by Samsung making it's own mobile SOC processor for it's phones. Mediatek providing components that Qualcomm offers for phones.
    Not sure what Qualcomm has achieved with fight and loosing Apple business ?
    .
    edited February 2018 watto_cobra
  • Reply 15 of 38
    MacProMacPro Posts: 18,359member
    viclauyyc said:
    Can someone enlighten me if Apple can just buy Qcom? I mean when 2 companies are in law battles?
    Better to buy Intel ;)
    caladanianwatto_cobra
  • Reply 16 of 38
    viclauyyc said:
    Can someone enlighten me if Apple can just buy Qcom? I mean when 2 companies are in law battles?
    Yes, they could.  Or Qualcomm could get a trillion dollar loan and try to buy Apple.  That's about as likely.
    watto_cobra
  • Reply 17 of 38
    proline said:
    bluefire1 said:
    If the QCOM chips used in iPhones is superior to the one from Intel, then I hope the company resolves its issues with Apple sooner rather then later and returns to the fold. 
    The cellphone network is rarely able to achieve the top speeds possible with existing chips, and when those tops speeds are achieved there is little need for anything faster. There is therefore not a huge rush at the moment making this an excellent time for Apple to take their time and make sure that Qualcomm's attitude is properly adjusted. Another year at Intel speeds will be just fine. 
    Superior modem isn't about the peak speeds, but the performance in low signal conditions. When the conditions are poor, which is more often than ideal, Qualcomm's digital signal processing shines, outperforming Intel modem by a wide margin. That's where a good modem makes a difference, not when the signal is pristine...
    netmagecaladaniandeepinsiderwatto_cobraAnilu_777
  • Reply 18 of 38
    k2kwk2kw Posts: 1,767member
    jrholmes said:
    proline said:
    bluefire1 said:
    If the QCOM chips used in iPhones is superior to the one from Intel, then I hope the company resolves its issues with Apple sooner rather then later and returns to the fold. 
    The cellphone network is rarely able to achieve the top speeds possible with existing chips, and when those tops speeds are achieved there is little need for anything faster. There is therefore not a huge rush at the moment making this an excellent time for Apple to take their time and make sure that Qualcomm's attitude is properly adjusted. Another year at Intel speeds will be just fine. 
    Superior modem isn't about the peak speeds, but the performance in low signal conditions. When the conditions are poor, which is more often than ideal, Qualcomm's digital signal processing shines, outperforming Intel modem by a wide margin. That's where a good modem makes a difference, not when the signal is pristine...
    So if Apple is going to put cheaper inferior modems into its phones do you think they will lower the price of the phones.   Probably not.   And after Meltdown and Spectre (and Intel's response to it) the last thing I want is intel in the phones.   Another been counter mistake like their crap-out batteries.
    feudalistwilliamlondon
  • Reply 19 of 38
    MplsPMplsP Posts: 1,575member
    Well, if their operating profits are down 96% their stock price should be a bargain! 
    watto_cobra
  • Reply 20 of 38
    tshapitshapi Posts: 294member
    For Apple, I thinks it’s more about best price and target metrics.

    i think Apple is working with intel on 5g modems so they can own the patent rights to that cellular modem tech. 

    I also wouldn’t be surprised if Apple or Tim Cook called Broadcom and encouraged them to move in on qcom.  Apple won’t buy them, but Apple can encourage someone else to make the problem go away. 


    watto_cobra
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