Intel to Supply Apple With 70% of LTE Chips Needed for 2018 iPhones

Intel is planning to supply Apple with 70 percent of the modem chips that will be used in the 2018 iPhone lineup, according an unnamed source that spoke to Fast Company. Qualcomm will allegedly provide the rest.

KGI Securities analyst Ming-Chi Kuo previously suggested Intel might be Apple's sole supplier for LTE modems in 2018 given Apple's ongoing and increasingly tense legal battle with Qualcomm, while The Wall Street Journal said Apple might use Mediatek and Intel chips to avoid working with Qualcomm, but Fast Company says that's not the case.

Intel will supply the lion's share of the chips, but because 2018 is the first year that Intel is fabricating its own chips using its 14-nanometer process, Fast Company's source says Apple plans to continue to use Qualcomm chips in 2018.
Given that technological transition, Apple is apparently waiting to see how well Intel fulfills this year's order. If Intel underdelivers, Qualcomm will make up the balance on top of the 30% it's already planning to provide. There's also a chance that if Intel can produce enough chips on time and on budget it could get more than the planned 70%, our source says.
Intel is reportedly not hitting its expected modem chip yield rates at the current time, with just over half of chips produced coming out in an acceptable quality. Intel engineers are, however, confident that yield rates can be pushed up before production ramps up in the summer months.

While Intel may not be Apple's sole supplier for modem chips in 2018, if its chip production speeds up and kinks are worked out, Apple will transition solely to Intel for its 2019 iPhone lineup, effectively cutting ties with Qualcomm.

Apple first adopted Intel chips in the iPhone 7, released in 2016, moving away from Qualcomm as its sole supplier. Since early 2017, Apple and Qualcomm have been embroiled in a bitter legal battle, which has led to Apple's efforts to cease using Qualcomm chips all together.

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Top Rated Comments

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24 months ago
Qualcomm asked for it. I think it's safe to say Steve Jobs would have let this happen.
Rating: 14 Votes
24 months ago
The hunt for the elusive Qualcomm phones
Rating: 9 Votes
24 months ago
Love ‘em or hate ‘em, Qualcomm has had years to perfect the LTE handoff on CDMA, and I don't know if I trust Intel with that yet. Could be a non-issue, but that’s my concern personally.
Rating: 7 Votes
24 months ago
While in no fan of Qualcomm, it’s kind of annoying that Apple is willingly using an inferior modem. Didn’t I read another article/post stating that Apple actually gimped the current Qualcomm modem so it wouldn’t outshine the Intel one?
Rating: 6 Votes
24 months ago
It was originally going to be 90%, but Intel had demanded something Apple just couldn't allow:

Rating: 4 Votes
24 months ago
Even if Intel starts making CDMA capable modems, Qualcomm still gets paid.
They own a huge chunk of CDMA patents.
Heck Qualcomm still gets a piece of every Intel modem sale due to the SEP licenses.
Rating: 3 Votes
24 months ago
Which Qualcomm modem would be suitable for the next iPhone? I believe the intel XMM 7560 is the other modem.
Rating: 3 Votes
24 months ago
I've recently moved from iPhone 6S to iPhone X and the modem behaviour at the Cell Edge is terrible, over twice the ammount of dropped calls on the X (Intel modem) compared to the 6S (Qualcomm modem).
Rating: 3 Votes
24 months ago

Qualcomm - They have the best Modem. No argument about it. But according to Tim Cook, on record, Qualcomm charges 5x more royalty then all other SEP "combined". That is Nokia + Ericsson + ZTE + Huawei + Samsung + Intel + some others. i.e 80% of all patents cost on mobile network are going to Qualcomm, granted Qualcomm has many other patents from CPU , GPU, Power Management and UI etc.... but seriously 5x?

Knowing Cook, he manipulated that number somehow. He's rather good at that kind of thing. For example, Apple has no license with Qualcomm. Apple left that to Foxconn and the other manufacturers, so that the license fee would only be based on what Foxconn sells phones to Apple for, NOT for the MUCH BIGGER price that Apple demands from its own customers.

In any case, the reason Qualcomm can get a bit more than most others, is because they created the core technology for 3G, and own about half the patents for it.

Since then, they've also spent billions of dollars a year in R&D on LTE and further generations. So they also own a lot of that as well.

License fees repay them and all the others who do the research to make our phones much faster. The billions that Apple stashes overseas does none of that for us.

I have yet to seen any people saying, why has Apple put up with Qualcomm for all these years?

That's like asking why Apple has "put up" with Nokia, Ericsson, Samsung and other suppliers and licensers. Because those other companies actually create and manufacture the very technology without which the iPhone would be useless.

Apple is an incredible hypocrite when it comes to license fees. Back when the iPhone first came out, they wanted up to $40 per device for anyone to license their patents. Not to mention the heavy fees they wanted from Samsung for infringing a few non-essential UI patents.

As for charging by device price, that's done with many patents. Heck, Apple itself licenses its own "Made for iPhone" IP at a percentage of a third party device's price. Apple even wanted 10% of a device's price at first, with a $10 minimum, while Qualcomm only asks 3.25% of a device. Which technology cost billions more to create, Made for iPhone or the worldwide cellular system? :)

Mind you, Qualcomm's prices are likely to drop, same as they've done for years. Recently they even capped the base device price for royalties at $400. This was apparently a peace offering to Apple, whose latest phones have gone over that amount in cost from a factory, I believe.
Rating: 2 Votes
24 months ago
Apple getting bolder and bolder ever since they removed headphone jack!
Rating: 2 Votes

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