Intel to become Apple’s biggest modem chip supplier for iPhone 7, earn $1.5 billion

According to market research firm Cowen & Co the world's largest chipmaker Intel will be supplying 50% cellular modems to Apple for its upcoming iPhone 7 later this year.
iphone 7

The numero uno chipmaker in the world, Intel is set to eat into the pie of Qualcomm by supplying more than half of the Apple iPhone 7 modems. According to market research firm Cowen & Co, this move signals the beginning of a new partnership between Apple and Intel. It was earlier reported last month by the same research firm that Intel could possibly be supplying Apple with 25% of its cellular modems for the iPhone 7.

It has been estimated that the Intel-Apple deal is set to bring in an additional $1.5 billion in revenue for Intel. Cowen & Co adds that Intel will be pocketing $850 million from the revenue as operating profits. It says that cost is a big factor in Apple opting to go with Intel as its four-chip modem comes cheaper that Qualcomm’s.

a note to investors by Cowen & Co analyst Timothy Arcuri said Intel will supply 100 million to 110 million 7360 LTE modems to Apple for the new iPhone 7 smartphones.The analyst believes this move away from Qualcomm is merely a move to further diversify its supply chain, an overarching product manufacturing strategy of Apple. The iPhone deal is a great proposition for Intel given the it never really had any substantial presence in the mobile space.

Apple is widely expected to launch its next-generation iPhone 7 smartphone in September 2016 with some software and hardware updates and minor design changes. A larger rear-facing camera lens and reconfigured antenna lines is expected according to reports on what is thought to be a 4.7-inch model. Intel stock advanced after Cowen & Co reported the new partnership between Apple and Intel.