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Intel’s XMM 7560 to power Apple’s upcoming iPhones

Author at TechGenyz Tech
Intel XMM 7560

KGI Securities analyst Ming-Chi Kuo has released a new report that states that Apple shall source the cellular modem chips powering its upcoming models exclusively from Intel. Intel had hitherto a minor share in Apple and was the second source of cellular modem chips for the iPhone 7 series launched in 2016.

Apple’s sole cellular modem chip supplier between the years 2011 and 2015 was Qualcomm, and it continued to be Apple’s primary source in 2016 and 2017. But with the new requirement of support for cellular networks that support the CDMA wireless standard, Intel XMM 7560 is all set to replace Qualcomm completely as the modem chip to be used in Apple’s 2018 lineup.

Apple’s latest shift from Qualcomm to Intel suggests a significant rise in Intel’s profit, which previously had minority modem share in Apple’s iPhone 7 series, iPhone 8 series, and iPhone X smartphones, and no share in Apple’s iPhone 6s series. Furthermore, it has been suggested that Apple may discontinue iPhone 6s models, making iPhone 7 series and iPhone 8 series the lower-cost options; which means Intel can expect to gain some shares in Apple’s lower end lineup.

On the other hand, owing to this shift, Qualcomm shall suffer a major dip in its revenue, amounting close to $1 billion (assuming 130 million chip shipments per year at an average price of $15). Qualcomm’s stand-alone modem business in time to come shall also depend on its ability to win back shares at Apple since the firm is the only smartphone vendor that still uses stand-alone modems.

It’s too early to tell if Intel will be able to maintain its position of exclusivity in the future, as Apple typically prefers to diversify its supply chain. He adds that Apple may give orders to Qualcomm again in exchange for concessions in the ongoing lawsuit between the two companies. – Kuo’s note

Thus, while Intel’s competitive pricing has allowed it to take the chip share from Qualcomm, Qualcomm might have to reduce its investments in stand-alone chips and focus more on building integrated cellular modem and applications processor parts if it fails to win back share at Apple.

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