In recent years, chip giant Intel's (NASDAQ:INTC) stand-alone cellular modem business -- which had been struggling mightily due to plunging revenue and significant financial losses -- got a huge shot in the arm because of a series of design wins at Apple (NASDAQ:AAPL).

Intel's XMM 7360 cellular modem found a home inside of a sizable percentage of iPhone 7-series smartphones sold, and the company's follow-on to that modem, known as the XMM 7480, can be found in a large portion of the iPhone 8-series and iPhone X smartphones that recently went up for sale.

Apple's iPhone X tilted back and facing the right.

Image source: Apple.

Per generally reliable KGI Securities analyst Ming-Chi Kuo, Intel is set to win between 70% and 89% the cellular modem orders for the 2018 iPhones. That's a big deal for Intel's cellular modem business, and I think there's a reasonable chance that Intel wins the entirety of the orders for Apple's 2019 iPhones as well with its XMM 7660 LTE modem.

Website Fast Company also recently claimed that Apple is working closely with Intel on next-generation 5G wireless technology for future iPhones while leaving longtime modem supplier Qualcomm (NASDAQ:QCOM) virtually out in the cold.

If Qualcomm remains a stand-alone entity, then sooner-or-later (I'd put my money on sooner), Qualcomm will be completely cut out of Apple's component supply chain in favor of Intel.

There is, however, a factor that could totally change the game.

What if Qualcomm gets bought?

Recently, wireless chip giant Broadcom (NASDAQ:AVGO) offered to purchase Qualcomm for about $70 per share. Qualcomm rejected the bid, claiming that Broadcom's offer "significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and [Qualcomm's] future growth prospects."

Reuters recently reported that Broadcom may boost its bid for Qualcomm after "consultation with several of Qualcomm's top shareholders."

I think the odds that Broadcom is successful buying Qualcomm are quite high.

Apple's iPhone X against a white background.

Image source: Apple.

If Broadcom were to acquire Qualcomm, then I think it would double-down on building out a portfolio of leadership mobile related technologies while winding down efforts in areas where Qualcomm isn't already a market leader. That means a heightened focus on its core mobile chip business as well as a winding down of non-mobile chip efforts.

Additionally, analyst Stacy Rasgon with Bernstein Research recently expressed his view in a research note that if Broadcom were to acquire Qualcomm, it'd "throw QTL to the wolves" and "use the action to significantly strengthen their chipset positioning and negotiation power." QTL is Qualcomm's wireless technology licensing business that generates royalties from wireless device sales independent of chip sales to those wireless device makers.

I agree fully with Rasgon's read of the situation. Under such a scenario, Apple would be more amenable to increasing Qualcomm's (under Broadcom) share of the cellular modems in future iPhone generations, particularly as Broadcom already sells so many other important chips into Apple's iPhones (touch controller, Wi-Fi/Bluetooth chip, various RF chips, and more).

That'd mean potentially significant iPhone share loss on Intel's part.

Intel's modem business depends heavily on iPhone

Most of Intel's cellular modem revenue comes from Apple. Since Intel doesn't offer integrated applications processor and modem chips, it can't really put chips into smartphones other than Apple's iPhone -- the only high-volume smartphone that still uses stand-alone cellular modems and applications processors.

If Intel doesn't generate enough revenue from sales of modem chips to Apple, then the company may be discouraged from investing heavily in future modem technology, leading to a downward spiral and ultimate failure of its modem business.

Intel's only real way to mitigate this risk factor is to re-enter the broader mobile applications processor business. I think Intel would have a better chance of success than it did last time should it choose to try again, but it's by no means clear if Intel is planning, or even willing to, re-enter this business.

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of and recommends Apple. The Motley Fool owns shares of Qualcomm and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Broadcom Ltd and Intel. The Motley Fool has a disclosure policy.