Update: Qualcomm seems to have experienced a sizeable drop in shares since rumours cropped up that Apple may drop the company in favour Intel as the supplier for its next-gen iPhone chips. Conversely, this has had a positive impact on Intel’s shares despite the company being late in the game of mobile processors.
While Intel shares climbed up a respectable 1.4 percent at $46.81, Qualcomm shares dropped by more than double that, falling by 3 percent as of Monday. The connection between the drop in shares and Apple ditching Qualcomm altogether have been made by industry experts, with Reuters noting CFRA Research analyst Angelo Zino in particular, stating that he thinks “that’s part of the reason the stock is down today.”
In other news, Qualcomm’s rival Broadcom has upped its buyout offer to a record breaking $145 billion. It’s unknown whether news of its fall in shares might impact on its consideration of the offer, and Qualcomm has yet to formerly address Broadcom’s latest attempt.
It seems that Qualcomm’s new alliance with Samsung has done nothing to quell its legal concerns with Apple, as the iPhone manufacturer seems to have plans on pushing the chipmaker aside entirely. Instead, it’s rumoured that Apple will contract Intel as its sole provider of cellular modems, trading out its reliance on one chipmaker for another.
Late last year, reports emerged that Intel’s faster baseband chips were making their way into the 2018 iPhone. Now, it seems that KGI analyst Ming-Chi Kuo (via 9to5Mac) is stating that this will be an exclusive deal between the two companies in which Qualcomm might not get any sales at all.
While this is apparently due to Intel fulfilling Apple’s technical requirements better than its rival, the decision likely comes from Apple’s disputes with Qualcomm, particularly with the latter accusing the iPhone maker of wrongly sharing proprietary chip code with Intel.
It’s unknown how long Apple’s agreement with Intel would last, as the iPhone manufacturer might use its position as a bargaining chip in its string of legal battles. It’s possible that Qualcomm might eventually be sent orders as a part of negotiation tactics, or perhaps not at all, but the rumoured switch to its rival is sure to cause tension for the time being.
Apple is known for not tying down the knot too tightly with any single supplier and keeps everyone on their toes as to what its next move might be, often preferring to design and builds its own technology. There hasn’t been any news on Apple progressing on its own processing chip however, so it’s almost a safe bet to assume it’ll dance between contracts for the time being.
One thing that is expected, no matter the supplier, is that the next chip will be capable of accelerated cellular connectivity in comparison to this generation, otherwise the successor to the iPhone X risks falling behind.
KitGuru Says: Eventually, it’s likely that Apple will start developing its own chips, but for now, it still has such a tight hold of the market with its current practices. It’s unclear how much of an impact the switch to Intel might have, if anything at all. Are you looking forward to the next generation of iPhones?