Intel Corp is set to supply up to 50% of the chips necessary for the iPhone 7, set to release in September 2016. This would make Intel the largest supplier for Apple and replacing Qualcomm Inc. Specifically, Apple would use the chips for the modem, not the processor, in some versions of the iPhone 7. This will be the Intel 7360 LTE. Some companies distributing such as Verizon and Sprint, may still use chips from Qualcomm. It remains unclear which markets Intel’s chips will appear in.
This shift is reported as a significant win for Intel with recent losses and lackluster demand for mobile chips from this maker. Intel has not been able to effectively step into the market for mobile chips despite its relevance with personal computers as well as processors for the Mac computer. This move for Intel has meant increased demand for company shares and already decreasing Qualcomm’s despite it’s increase in the past year. The possible long term investment Apple is making could pave the way for other mobile device manufacturers to utilize these new chips. While Intel will be packaging the chips, they have contracted with two other semiconductor companies to manufacture the chips.
For Apple, this change of suppliers is a smart choice. Apple will be in a better position to negotiate prices, distributes the risk related with suppliers and protects supply chains. For customers, using an iPhone with an Intel modem could mean faster speeds for streaming, downloading and other data-related activities. Rumors are that Qualcomm’s theoretical speed of 300 Mbps will be lower than Intel’s expected speed of 450 Mbps with the new chips.
With all new cycles of iPhones Apple makes changes and these are the rumored adjustments to the iPhone 7:
- New color option
- Change in camera lens
- Position of the antenna moves
- Headphone jack may disappear
- Wireless charging
- Double the storage
- Could cost the same as its previous iteration
Apple is likely to release the new phone as in previous years in the fall, probably in September. Time will tell if the choice to utilize Intel to supply chips will be a boon for the company or not. If customers are happy with the potential increased speed, it could pave the way for Intel to become an active supplier in this industry.