Apple shares dip on reports future iPhones could lag competition

Posted June 10, 2017

Rather than use Qualcomm's modem exclusively for its next iPhone, Apple will continue to use Intel's modems in some models even though they are slower, Bloomberg reported, citing people familiar with Apple's decision.

The reason? According to the source, it's the company's ongoing litigation with Qualcomm that would preventing Apple including the currently-available gigabit modem.

The two companies are now locked in an intense legal battle over royalties. So although Qualcomm's offering can support the aforementioned gigabit data speeds, the iPhone 8 won't support such speeds because Intel's LTE modems can't compete just yet.

In regards to the iPhone 8, the device will feature LTE modems from both Qualcomm and Intel.

Intel is still developing its own modem that can be capable of 1 gigabit speeds. The top USA wireless carriers - Verizon AT&T, T-Mobile US Inc. and Sprint Corp. - have declared 2017 the year of 1 gigabit speeds.

Apple now plans to use both Intel and Qualcomm modems in the newest iPhone in order to limit its reliance on a single manufacturer. It wasn't until 2012 that the iPhone supported LTE technology that's the basis of 4G networks - a year after Samsung Electronics Co. added that capability to its smartphones. That's because while Qualcomm now offers a modem with support for 1 gigabit LTE download speeds, Intel doesn't yet have such a modem available.

Apple (AAPL) , a company with quite the reputation for being obsessed with the quality and performance of the parts that go into its hardware, appears set for the second year in a row to keep some of the modems going into its iPhones from operating at peak performance.

The new iPhone lineup dropping in September will have the most powerful chipsets when compared against its Android competitors so in short, we should expect the iPhone 8 to come exuding a lot of horsepower from a smartphone. As the pool of new customers has declined, most of the user gains are coming at the expense of rivals.