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Will Intel Power iPhone 7? Some Say Yes

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Intel may have managed to steal some business from Qualcomm for the next iPhone chips, and such rumors have been making the rounds for a long time. But now Wall Street analysts are getting serious about the financial impact it would have on both companies if the rumor is true, says Fortune. The chip giant is expected to grab 30% or less of the orders from Qualcomm, believe analysts.

Intel and Apple together?

Apple’s iPhone 7 is expected to debut in the fall. Over the following year, the iPhone maker is likely to sell around 250 million iPhones with about three-quarters, or 188 million, of sales coming from the latest model. Nothing has been said by Apple about changing chip suppliers, but the tech company rarely comments on such changes.

Intel is likely to receive only 30 million to 40 million of the iPhone chipset orders, while Qualcomm will get the rest, predicts Mike Walkley, a Canaccord Genuity analyst.  Apple aims to diversify its supply chain for key iPhone components like the wireless modem, but Qualcomm retains proprietary standards in chipsets, thus restricting the chip making giant from capturing any of this business at this time.

Last week in a report on Qualcomm’s prospects, Walkley wrote, “Overall, we are impressed by Qualcomm’s long-term technical roadmap, believe more optimistic long-term (licensing unit) growth targets are achievable, and appreciate the new focus of the management team to streamline the business and cost controls.”

Some agree while some not

Many analysts covering Intel also have similar thoughts. Steve Mullane, an analyst at BlueFin Research Partners, believes Intel will get its 7360 modem chip into the iPhone 7 and only in about 30% of the handsets.

“The significance is not the incremental revenue gain for INTC but rather the ‘foot in the door’ for further future opportunities in the iPhone,” Mullane notes.

On the other hand, there are analysts who differ and believe Intel won’t get anything.  Earlier this month, MKM analyst Ian Ing said, “We retain some skepticism that Apple would add risk to their global launches.”

On Tuesday, the chip maker may offer some clues about the potential Apple business when reporting its first quarter results. Over the past few years, the chip giant has taken huge losses in its mobile division, including $4 billion in 2014 alone. Getting orders from Apple would help the chip maker in turning things around.

On Monday, Intel shares closed up 0.6% at $31.65. Year to date, the stock is down by almost 10%, while in the last year, it is down by almost 3%.

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Aman Jain
Personal Finance Writer

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