Apple could ditch Qualcomm for new Gbps Intel XMM 7650 modem in iPhone 8

Earlier today Intel announced a new XMM 7650 Baseband Processor modem today to take on Qualcomm's X16. Unlike previous Intel modems, the new product supports CDMA in addition to LTE, as well as high speed LTE Category 16, enabling gigabit downloads. The new chip could enable global mobile support for Apple's next iPhones.

Intel's new chip was profiled by Sacha Sagan, writing or PC Mag, who called it a likely frontrunner for Apple's upcoming iPhone 7s and 8 models.

Sagan noted that Intel's 7560 Baseband Processor "is LTE Category 16/13, with download speeds of 1Gbps and upload speeds of 225Mbps. It supports up to 8x4 MIMO, up to 35 LTE bands, and all of the current evolutions of LTE, GSM, and CDMA."

Last fall, Apple began using Intel modem chips in some of its non-CDMA iPhone models for use with carriers including AT&T and T-Mobile. However, it continued to use Qualcomm modems because Intel didn't have the ability to support legacy CDMA networks such as Verizon and Sprint.

Intel's new modem chip could allow Apple to switch entirely to Intel, after a bitter feud with Qualcomm over licensing issues. Apple charged that Qualcomm's practice of charging licensing fees as a percentage of the total cost of iPhones means that it is demanding more money for unrelated value Apple itself is creating.

With Apple rumored to be introducing an even more expensive premium iPhone model this fall, its inability to negotiate favorable terms with Qualcomm would give it a strong incentive to shift its business entirely to Intel.

Intel looking for a mobile win

Intel is hungry for business, following the repeated failure of its own efforts to bring x86 compatible chips to mobile with Atom. In 2010, Intel acquired Infineon, the Baseband Processor vendor Apple had been using since the first iPhone, just as Apple shifted to Qualcomm in order to expand support to CDMA carriers like Verizon.

Six years later, Apple returned to using some of Intel's chips where CDMA support wasn't required, but Intel's new inclusion of CDMA support could enable an expanded partnership with Apple in Baseband Processors that would give Intel a greatly expanded entry into the baseband market currently dominated by Qualcomm.

A move by Apple away from Qualcomm would follow the pattern of its parallel legal issues with Samsung, which induced the company to move its Application Processor business from Samsung's LSI fab to TSMC (although that transition took years to complete).

Apple's next generation of iPhones will compete against a new Samsung flagship using Qualcomm's Snapdragon 835, which combines an Application Processor and X16 Baseband Processor into a single chipset. Qualcomm also announced a new X20 modem that's even faster, although carriers have yet to roll out networks that take advantage of it.

Apple is expected to pair its own TSMC-produced A11 Application Processor with a third party Baseband Processor. If it moves entirely to Intel, Qualcomm would be left dependent upon Android devices, which make up a shrinking segment of the most valuable premium tier of the market.