New iPhones Could Use Intel Modems (NASDAQ:AAPL)

Gwen Vasquez
February 6, 2018

Instinet analyst Romit Shah predicted that Apple Inc. will dump chips made by Broadcom Ltd. and Qualcomm Inc.in the next iPhone to cut costs. A 6.4-inch iPhone X Plus boasting an LG developed panel is also reportedly in works, but Kuo in his note suggested the South Korean firm might not be able to meet Apple's production requirement on time.

Earlier, the analyst also predicted that Catcher will be supplying stell frames for Apple's 2018 iPhone lineup, but its role has now shifted to aluminium parts required for an LCD model.

At the time, Ming-Chi Kuo believed Apple would give about 30 per cent of the orders to Qualcomm because benchmarks showed that units with the Qualcomm baseband chipset performed better than the ones with Intel hardware.

Intel's XMM 7560 modems support both CDMA and GSM, which means Apple could launch a single iPhone model that would work across all the major United States carriers such as AT&T, Sprint, Verizon, and T-Mobile. The news however, is a blow to Qualcomm, which for a while enjoyed exclusivity with Apple.

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The previous limitation of Intel modems, which lacked CDMA, prohibited the tech giant from ditching Qualcomm altogether.

This move would make sense, given the recent bad blood between Qualcomm and Apple. Intel is said to use its XMM 7560 modem in the new iPhones that include faster LTE speeds with 4x4 MIMO technology.

Late last month, the European Commission slapped a fine of $1.2 billion on Qualcomm for violation of antitrust laws in a series of deals with Apple. There's also chance Apple could still ask Qualcomm for components, perhaps as concessions in the patent lawsuit settlement.

There seems to be two key reasons for a shift to Intel as an exclusive supply partner this year. Kuo believes Apple prefers to diversify its supplier base and it wouldn't want to rely entirely on Intel for long. Kuo is also predicting the new Intel chips will support dual SIM slots, though whether Apple will launch an iPhone with dual-SIM slots is not clearly stated in the report. It may force Apple to go back to Qualcomm.

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