At a recent investor conference, Intel (NASDAQ:INTC) executive Gregory Bryant, who runs the company's Client Computing Group (CCG), provided an update on the company's upcoming XMM 7560 cellular modem

The XMM 7560 is a stand-alone modem, which means that it can't process all of the functions that a smartphone needs to perform on its own. It needs to be connected to another chip known as an applications processor.

Intel executive Gregory Bryant holding a laptop.

Intel executive Gregory Bryant. Image source: Intel.

Most smartphones sold today don't use stand-alone modems. They use integrated applications processors and modems either designed by the smartphone manufacturer itself or by a third-party chip vendor. Apple (NASDAQ:AAPL) is the only major smartphone vendor that still uses stand-alone modems paired with stand-alone applications processors.  

Intel's stand-alone modems have been used in Apple's last two generations of iPhone products. Some of Apple's iPhone 7 series smartphones shipped with Intel's XMM 7360 modem, and the company's most recent XMM 7480 LTE modem powers some of Apple's iPhone 8 series and iPhone X devices. 

It's widely believed that Apple will use the XMM 7560 in some of its next-generation iPhones. In fact, one analyst thinks that Apple will use the XMM 7560 in most of its upcoming iPhones

One of the things that could allow the XMM 7560 to be much more successful than its predecessors is the inclusion of support for the CDMA cellphone network. Intel's XMM 7360 and XMM 7480 don't support CDMA, so iPhones with Intel modems won't work on any cellular networks that use CDMA. 

This limitation has kept a lid on the kind of iPhone modem market share that Intel could capture. 

An Intel XMM 7560 LTE modem next to a pencil eraser (left) and a penny (top) for scale. It's smaller than the penny and bigger than the eraser.

Image source: Intel.

Given that the XMM 7560 is going to be an important product for Intel's blossoming cellular modem business, and given that it'll likely be an important component inside of what will arguably be the most talked about smartphone launch in 2018, it's worth keeping tabs on how the development of this modem is going. 

Sampling now, shipping later in 2018

Bryant said during the Jan. 9 event that Intel is sampling the XMM 7560 modem to "multiple customers today" and that products incorporating the modem will be available "later in 2018." 

Considering that Apple tends to announce new iPhones in September of each year, I think it's a pretty safe bet that the latest that we'll see the XMM 7560 out in the wild is in September.

Since there tends to be a lead time between when Intel ships components to Apple and when devices incorporating those components hit the market, Intel should see initial revenue from sales of the XMM 7560 well before September. 

It's (supposedly) about more than phones

Bryant remarked that Intel is leveraging its cellular modem technology in areas beyond smartphones. 

He said that cellular modem technology will be important for so-called "always connected PCs" (these are just laptops with cellular modems built in), autonomous driving, and even smart-home applications. 

While Bryant may be right that sales of cellular modems into these non-smartphone segments will lead to significant revenue growth for the company, it doesn't seem likely that such growth will happen anytime soon, as Apple's iPhone shipment volumes are enormous while the other segments are minuscule today.

For now, Intel's cellular modem story is effectively dependent on how much share it can capture in future iPhones and how well those future iPhones sell.

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