We’ve heard rumors that Apple may be planning to go to Intel for modems for the iPhone 7, and now one firm says its checks back up these rumors. Meanwhile the chip maker bids adieu to some top executives, but another firm doesn’t think the departures will have a serious impact on its results.
Intel’s production levels to turn around in Q2
In a report dated Apr. 5, BlueFin Research Partners analyst Steve Mullane said his checks suggest that Intel’s production slowed by between 4% and 5% sequentially in the first quarter, declining throughout most of the quarter but then improving in the last two weeks of March. This was still better than the 5% to 6% decline he was estimating for the first quarter at the end of February. The analyst notes that the recent production decline wasn’t much of a surprise because PC shipments were lackluster in the first two months of the year and inventory levels were high at the beginning of the year.
He expects the second quarter to finally bring an increase of 5% after multiple quarters of declining production, based on the 5% sequential increase material suppliers are projecting. If the June quarter finally does bring a production increase for Intel, it would follow two consecutive quarters of declines and would signal that inventory levels might be closer to their targets.
Apple to bolster Intel’s modem sales
The BlueFin analyst also said his checks back up the reports that Intel will win a share of the modem orders for Apple’s iPhone 7. At the end of March, he noted that TSMC plans to double its production starts of Intel’s 28-nanometer 7360 modem in the current quarter, which coincides with the timing of the production ramp for the A10 processor Apple is expected to use in the iPhone 7 this fall.
He adds that although the production levels for this component amount to only a 30% minority share of the iPhone 7 orders, Intel has gained something very important: a foot in the door with Apple.
Intel exec departures not a big problem
Credit Suisse analysts John Pitzer and William Miller weighed in on the two new executive departures Intel announced this week in their note dated Apr. 4 Client Computing Group VP Kirk Skaugen and Internet of Things Group VP Doug Davis will both be departing, with the former leaving his position later this week and the latter planning to retire at the end of the year. Also Technology Manufacturing Group VP Bill Holt will leave in mid-June, and there have been reports that Chip Design Group VP Aicha Evans will leave as well.
Pitzer and Miller do see the recent management changes as “meaningful” but don’t believe the departures signal a serious change in direction or strategy.
Intel stock edged higher by 0.2% to $32.06 per share in afternoon trading today.
