“No. 1 chipmaker Intel could supply more than half of the Apple iPhone 7 modems, on its way to possibly entirely ousting incumbent Qualcomm from the Apple supply chain, Cowen analyst Timothy Arcuri said Monday,” Allison Gatlin reports for Barron’s.
“Intel shares were up more than 1% in early trading on the stock market today, above 34,” Gatlin reports. “They have recovered 12% since June 27, when Intel stock hit a sell zone.”
“Arcuri boosted his price target Monday on Intel stock to 36 from 32 and kept his market perform rating. He expects Intel’s Apple business to add 17 cents earnings per share ex items on $1.5 billion in incremental revenue over 2016 and 2017,” Gatlin reports. ” Intel’s four-chip modem product costs about $7.50 to make, meaning Intel can sell it for $15 and still garner 50%-55% gross profit margins, Arcuri says. Taiwan Semiconductor Manufacturing (TSM) looks likely to make the bulk of these phones. Qualcomm’s modem product for iPhones runs about $17 to buy, Arcuri says.”
Read more in the full article here.
MacDailyNews Take: If true, that’s bad news for Qualcomm if they can’t up their game.
SEE ALSO:
Some versions of Apple’s iPhone 7 will use Intel chips; Intel gets first mobile win – June 10, 2016
Apple’s potential switch for key iPhone component hits Qualcomm – April 21, 2016
More evidence that Apple is building its own modem – March 19, 2015
Intel axes 12,000 employees, 11% of its workforce – April 19, 2016
After eating Intel’s mobile lunch, Apple could next devour Qualcomm’s Baseband Processor business – January 20, 2015
Intel has 1,000 people working on chips for Apple iPhone – October 17, 2015
This follows up articles from April and June:
Apple’s potential switch for key iPhone component hits Qualcomm
Intel Gets Chip Order From Apple, Its First Major Mobile Win
– Qualcomm provides the predominant CPU chips (Snapdragon) used in Android devices.
– Qualcomm has had Snapdragon CPU overheating problems, leading to a loss of customers.
– Qualcomm is being pestered by the EU of monopolist behavior.
– Qualcomm had layoffs a year ago.
– Qualcomm had revenue problems at the end of 2015.
– Qualcomm caught up with 64-bit mobile CPUs a year after Apple’s A-Series CPUs (A7).
– Qualcomm’s chips were found this year to have a longstanding security flaw (CVE-2016-2060), affecting millions of Android phones. “Malicious applications could exploit the flaw in order to execute commands as the “radio” system user, which has special privileges.” – PCWorld
Qualcomm: Having a bad time.