Will Intel Chips Power iPhone 7?

Intel has been working for months with Apple to put its chips in some of the company’s 2016 iPhones or iPhone 7, says a report from VentureBeat, which cites sources familiar with the matter. Getting its chips in the iPhone will be a big win for the chip maker, which has yet to make a mark in the smartphone segment.

Apple deal vital for Intel

Intel’s new 7360 LTE modem will be fitted to the circuit boards of some of the iPhones next year, but for now, it is not known which iPhone SKUs will actually have the chip, says the report. Many of the 2016 iPhones will reportedly be fitted with Qualcomm’s 9X45 LTE modem chip.

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In March, VentureBeat revealed that Intel and Apple were working on LTE chips. Citing one of the sources, the report says the deal was “Intel’s to lose,” meaning the deal could be lost by the chip maker only if it fails to hit key milestones. So far, Intel has been on schedule, says the report.

Intel has been late to the mobile market and thus has been struggling to make a mark in the segment, which is dominated by Qualcomm. The chip maker has been very responsive to Apple’s demands, as getting its chip in an iPhone will be a big achievement.

Will 7360 LTE do it for Intel?

Intel’s 7360 LTE modem chip is popular in the industry for being power-efficient, fast and well-built. The chip supports Category 9/10 LTE and 3X carrier aggregation and is capable of hitting a download speed of 450 megabits per second (mbps). But the report says choosing Intel chips has more to do with “second-sourcing” than the quality. Apple’s iPhones sales have been trending upward year over year, so Apple is now more cautious with its component supply chain, therefore, it plans to have more than one supplier for the LTE modem chip.

Going forward, the 7630 chip in the iPhone could provide a solid foundation for Intel as Apple favors the idea of a phone processor and LTE modem on one chip, which leads to more power efficiency in phones, says the report.

On Thursday, Intel shares closed up 0.24% at $28.74. Year to date, the stock is down by almost 22%, while in the last year, shares are down by over 17%.