Some models of the next iPhone will include modems from Intel, according to Bloomberg, marking a long-overdue win in mobile for the chip maker.
Apple (NASDAQ: AAPL) tapped Intel to replace Qualcomm's (NASDAQ:QCOM) chips in some new iPhone versions in an effort to diversify its supplier base, Bloomberg said. Intel's chips will be used in the iPhone on AT&T's (NYSE: T) network and some overseas models, while Qualcomm's components will continue to power Verizon's (NYSE: VZ) iPhone. Qualcomm chips will still power iPhones made for the Chinese market as well.
Bloomberg's report cited unnamed "people familiar with the matter," and all of the companies involved declined to comment for the story.
Apple's move is a major victory for Intel, which is still suffering from its inability to tap the smartphone market. The company said in April that it would slash as many as 12,000 jobs and hone its focus on the cloud and the Internet of Things in an effort to save $1.4 billion a year. And last month it confirmed that it killed three of its SoFIA chip products for smartphones as it retreated from mobile in favor of newer tech markets.
Meanwhile, the news marks a clear setback for Qualcomm. Some industry insiders feared Apple may drop Qualcomm's chips completely, but Intel's processors will replace Qualcomm's in many of the 23 million iPhones AT&T is estimated to sell next year, as Bloomberg reported.
Like Intel, Qualcomm is increasingly looking to the IoT as growth in the worldwide smartphone market slows to the single digits. At CES in January Qualcomm unveiled a chip designed specifically for connected cars, as well as a Snapdragon-based LTE modem for IoT use cases.
- see this Bloomberg report
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