Apple, Intel In Talks For iPhone 6 Chips

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Apple, Intel In Talks For iPhone 6 Chips
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Although Intel Corporation (NASDAQ:INTC) probably isn’t making chips for this year’s iPhone 6, it could strike a deal with Apple Inc. (NASDAQ:AAPL) for next year’s model, according to one analyst. Intel Mobile Communications, the division of Intel that once made iPhone chips, is reportedly trying to wade back into Apple’s supply chain by unseating QUALCOMM, Inc. (NASDAQ:QCOM). It’s been several years since the company made chips for the iPhone.

Intel wants to make iPhone chips

Currently QUALCOMM, Inc. (NASDAQ:QCOM) makes the wireless LTE chips for Apple Inc. (NASDAQ:AAPL)’s products. Cowen and Company analyst Timothy Acuri says that’s expected to stay the same for the iPhone 6 this year, although that could change next year. He said his supply chain sources claim Apple is talking about returning to Intel Corporation (NASDAQ:INTC) for its chips.

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According to Acuri, Apple Inc. (NASDAQ:AAPL) may actually be using the talks with Intel Corporation (NASDAQ:INTC) to get better prices from QUALCOMM, Inc. (NASDAQ:QCOM). Apparently the talks have been going on for some time, but he doesn’t think Apple will end up choosing Intel in the end. Nonetheless, he says Intel’s efforts in the LTE baseband chip market may seem more credible simply because the company has been engaged in talks with Apple.

Apple could make other changes

Acuri does think Apple Inc. (NASDAQ:AAPL) could eventually dump Broadcom Corporation (NASDAQ:BRCM), which makes the Wi-Fi Bluetooth chips found in the iPhone. The analyst suggests that QUALCOMM, Inc. (NASDAQ:QCOM) could woo Apple away from Broadcom at some point in the next few years. He thinks the company has made progress that will put in a position that enables it to replace Broadcom.

There have been rumors in the past that Apple Inc. (NASDAQ:AAPL) will eventually bring the design of its baseband chips in-house, just as it did the A-series chips for its iOS devices. However, there haven’t really been any other reports of this since that one in April.

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