A June 9 report from Bloomberg says Apple's (NASDAQ:AAPL) upcoming iPhone models won't support 1-gigabit-per-second download speeds. The report notes that Apple will again look to both Qualcomm (NASDAQ:QCOM) and Intel (NASDAQ:INTC) to supply the cellular modems for the next-generation iPhone models, as it does for the current iPhone 7-series smartphones.
As Bloomberg points out, Qualcomm currently sells a cellular modem capable of 1-gigabit-per-second download speeds -- the Snapdragon X16 -- but Intel doesn't. Intel's upcoming XMM 7480, which Apple will probably use this year, supports only 450 megabits per second. As a result, Bloomberg says, Apple will hold back the capabilities of the Qualcomm-powered devices to match those of the Intel-powered devices.
In other words, it's the same thing we saw happen with the iPhone 7-series: The Qualcomm modem used in those phones supported higher download and upload speeds than what the Intel modems could achieve, so the Qualcomm modems were held back.
Is this a problem for Apple? I don't think so, and here's why.
Carriers not happy, but it probably won't hurt Apple
Bloomberg says Apple's decision to dual-source modems "clashes with the marketing plans of a cellular industry desperate to show off faster network speeds to grab market share." The report also says the new iPhone models could "look even less speedy compared to newer gigabit-ready smartphones from other manufacturers."
While it's true that other smartphone manufacturers will be able to boast of gigabit wireless capabilities in their phones and could even use it as a marketing weapon against Apple, I'm not convinced that this will have a significant negative impact on iPhone sales in the coming product cycle. I wouldn't be surprised if Qualcomm stoked the flames behind the scenes as well.
The iPhone 6-series smartphones -- Apple's most successful iPhones to date -- lagged the competition in terms of cellular capabilities. The iPhone 6 and iPhone 6 Plus had modems that were capable of only 150-megabit-per-second download speeds, and those phones did very well in the marketplace against phones with modems that boasted 300-megabit speeds.
Of course, higher peak download capabilities are marketable features, but compared to things such as the camera, industrial design, operating-system capabilities, and battery life, paper specifications about download speeds that typical customers on most networks are probably never going to see just aren't that important.
This "problem" becomes a tailwind in 2018
When Apple hosts its keynote this year and publishes its marketing materials for the upcoming iPhone, the company should have plenty of features to market while keeping relatively quiet on cellular speeds and feeds.
Then, next year, when Intel has its gigabit LTE modem ready and Apple can source gigabit LTE chips from both Qualcomm and Intel, Apple can make a big deal about this new feature and use it -- in conjunction with other feature enhancements -- to try to stimulate demand for its 2018 iPhones.