Apple is on track to ramp up production of its iPhone 8 flagship slightly ahead of schedule this year, and the company has gone ahead and increased orders for next-generation modem chips from Intel — one of Qualcomm’s chief competitors — to help meet demand for the company’s iPhone 8, according to a report published this morning by DigiTimes.
For the last several years, Qualcomm has been Apple’s sole supplier of modem/LTE chips for the iPhone, however back in 2016, Apple decided to broaden its supply chain, increasing orders of Intel’s latest XMM 7560 LTE modem. Accordingly, DigiTimes estimated that as many as 30% of Apple’s iPhone 7 and iPhone 7 Plus handsets are equipped with Intel’s modem chips.
The report goes on to cite Intel’s most recent revision of the XMM 7560 — now boasting support for CDMA/LTE-based iPhones (such as Sprint and Verizon models), which has bolstered the chip-maker’s position to supply even more modems for Apple’s iPhone 8, iPhone 7s and iPhone 7s Plus. In fact, DigiTimes specifically cites supply chain sources who indicated that Apple could increase reliance on Intel modems to 50% in 2017 — and to as much as 70% or more in 2018.
Apple vs. Qualcomm
While a slow shift away from Qualcomm and an increased reliance on Intel might be seen as a way of Apple merely leveraging its options in the supply chain, worth noting is the spat of ongoing legal warfare between the two companies.
The drama began back in January of this year, when an Apple and U.S. Federal Trade Commission-backed injunction was filed against Qualcomm because of the chip-maker’s supposed monopolistic tendencies. Since then, both Apple and Qualcomm, respectively, have filed a number of successive lawsuits against one another. For instance, Apple has since lodged additional complaints against Qualcomm in Beijing, China and the U.K., while subsequently instructing its iPhone assembly partners to stop paying royalties to the chip-maker.
Meanwhile, Qualcomm has filed its own complaints against Apple — once requesting a complete ban on the sale of iPhones in the U.S., and another against four of the iPhone-maker’s assembly partners: Foxconn Technology Group, Pegatron Corp., Wistron Corp., and Compal Electronics, Inc., for allegedly breaching their contracts and complying with Apple in its request to cease paying royalties.
The DigiTimes report notes that Apple’s apparent shift from Qualcomm to Intel — particularly at this stage in the game, and considering the plethora of legal issues between them — is more due to the companies’ unwillingness to reach a resolution. For Apple, though, this transition away from Qualcomm and over to Intel chips is more a matter of iPhones simply needing to be produced, rather than it is making a statement to Qualcomm. After all, legal warfare notwithstanding, Apple has to get LTE modems from somewhere, right? Luckily for iPhone 7s and iPhone 8 hopefuls, Intel’s latest chips are some of the very best.
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