Intel is now officially inside the iPhone 7, according to a teardown by research firm Chipworks. Intel’s logo is barely visible inside the iPhone, but what’s important is that it’s in there. The logo is actually just a tiny circle, and the word “Intel” is not printed on the chip, notes Forbes. With this, the rumors about the chip maker becoming a supplier of LTE modems for the iPhone which have brewed for months are finally confirmed.
Intel has four components inside iPhone
On Thursday, Chipworks said it obtained an iPhone 7 — Model A1778 for the North American market — and spent the day tearing it apart. Jim Morrison, vice president of competitive technical intelligence at Chipworks, said it was surprising to see the amount of space the Intel took up inside the new iPhone.
Intel has four components: two transceivers, a power management chip and the baseband LTE modem. The Qualcomm modem and many other components from other companies have been replaced with the Intel chips. Chipworks has gotten its hands on just one version of the iPhone 7. The other versions may use Qualcomm chips, as Intel’s modem does not support code division multiple access or CDMA. In earlier iPhones, Apple used Infineon’s 3G modems, but after the company’s acquisition by Intel, Apple switched to Qualcomm.
Sourcing the LTE modems from a different manufacturer probably gives the tech giant a leverage in negotiations with Qualcomm and other companies over prices. But according to Jim McGregor, principal analyst at Tirias Research, the iPhone maker is doing this because it “keeps other suppliers on their toes.”
One more winner apart from Intel
Nevertheless, this still is a big win for the chip maker. It serves as a validation of the significant multi-year investment in cellular modems, even if the revenue impact is limited. Apart from Intel, CEVA could also enjoy a financial boost from this development, notes The Motley Fool. Companies like CEVA, an intellectual property vendor, receive up-front licensing fees for their technology and subsequent royalty payments from the sales of chips incorporating their tech. CEVA makes digital signal processors used in a several applications, including cellular modems.
If the iPhone 7 product cycle sees shipments of 120 million to 130 million units, then CEVA could enjoy an additional $5.3 million in royalty revenue over that period. Also if Apple chooses to use Intel modems again in the substitute to the iPhone 7, and assuming that the chip maker continues to use CEVA DSPs, then the company could benefit from both continued iPhone 7 volumes and shipments of the next-generation device, notes The Motley Fool.