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Intel’s iPhone business could be at risk due to performance lag, reports analyst

Apple might choose against keeping Intel as a wireless modem chip provider due to lagging performance speeds in comparison to Qualcomm, reports analyst Tom Sepenzis of Northland Capital Markets.

The mobile manufacturer used both Intel and Qualcomm chips in the iPhone 7, a hard-won opportunity for Intel, which was excluded from the iPhone 6S in favour of only Qualcomm chips. However, performance tests by Cellular Insights quickly emerged that showed the iPhone 7 with Intel chip performing poorly in download speed tests against the iPhone 7 with the Qualcomm chip.

Apple then denied there was a “discernible difference in the wireless performance of any of the models.” Subsequent reports from both Bloomberg and Recode, however, asserted that Apple was throttling the Qualcomm chip’s speed in order to make the two versions of the iPhone as similar as possible — precisely in an effort to avoid enraging customers who received the Intel chip.

Sepenzis report, covered by Fortune, stated that the mere technical specifications of the chips reveal the truth, with Intel’s XMM 3360 modem coming in at 450 megabits per second, while Qualcomm’s X12 modem boasts 600 megabits per second.

“While Apple will certainly keep a second source if possible, it isn’t going to do so for too long if it has to handicap half of its devices,” Sepenzis wrote in his report.

“This should give QCOM a path towards recapturing all of Apple over the next two years if Intel doesn’t find an answer.”

In June 2016, when Apple’s partnership with Intel was announced, Bloomberg indicated that the decision was made in order to diversify its supply chain, and that Intel chips would mainly be used inside iPhones sold on GSM networks while Qualcomm chips would be stocked for CDMA networks.

Since Canada’s networks are primarily GSM, it seems likely that most Canadian iPhone users have devices stocked with the reportedly inferior Intel chip.

Related: Intel backs out of the mobile processor market to licks its wounds, but may be back again

[via]Fortune[/via]

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