KGI: Intel might be exclusive modem supplier for 2018 iPhone lineup, Qualcomm iced out
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.
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.
Comments
Qualcomm shot its own feet by biting the hands that feed it.
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.
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!
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.
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.
He predicts Apple’s future by reading the woodgrain in his office desk.
Not sure what Qualcomm has achieved with fight and loosing Apple business ?
.
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.
At least you’ve made identifying your narrative agenda easy.