Qualcomm (QCOM -1.75%) is well known for building the world's best cellular modems. The company's competence in modem technology has helped it become the largest merchant vendor of mobile applications processors in the world and, for many years, the exclusive supplier of stand-alone cellular modems into Apple's (AAPL -0.57%) iPhone line. 

On Feb. 14, Qualcomm announced that it has begun sampling its latest stand-alone LTE modem, known as the Snapdragon X24. The company says that it supports download speeds of up to two gigabits per second and is manufactured on a "leading-edge seven nanometer FinFET [manufacturing] process." 

Apple's iPhone 8 Plus (left) and iPhone 8 (right).

Image source: Apple.

Given Qualcomm's history of building best-in-class modems, and based on the specifications of the Snapdragon X24, I have no doubt that the X24 will be the most capable cellular modem in the industry. 

However, while technical specifications are fun to geek-out over, the question that investors need to ask is this: Will Apple -- the only major smartphone vendor that uses stand-alone modems -- incorporate the Snapdragon X24 in its iPhone models slated to launch in the second half of 2019? 

The uncertainty

Apple has used Qualcomm's stand-alone modems for years, and even used Qualcomm's modems exclusively from 2011 through 2015. But in 2016, Apple began dual-sourcing its cellular modems from both Qualcomm and Intel (INTC -1.79%) for its iPhone 7 series. This dual-sourcing strategy continued with the current iPhone 8 series and iPhone X. 

However, according to generally reliable analyst Ming-Chi Kuo with KGI Securities, Apple is planning to cut Qualcomm out completely from the upcoming iPhone models, opting instead to buy modems exclusively from Intel. This is despite the fact that the Intel XMM 7560 modem that Apple plans to use offers inferior specifications to Qualcomm's comparable Snapdragon X20 LTE modem. 

An Intel XMM 7560 modem next to a penny and an eraser.

Image source: Intel.

In light of the supply situation that Kuo describes, it's not at all clear whether Apple will use the Snapdragon X24 modem in its 2019 iPhone models. Once again, the Snapdragon X24 is a more capable device than the Intel XMM 7660 with which it'll compete, but if technology specifications were the only things that mattered, Intel wouldn't be inside any iPhones currently shipping. 

Right now, there are a few things that work against Qualcomm. The first is that Apple and Qualcomm are currently in the middle of a bitter legal dispute, and the second is that Intel is believed to be willing to price its cellular modems quite aggressively relative to Qualcomm's in a bid to gain (and, perhaps soon, maintain) share within Apple's iPhone shipments. 

However, by the time the 2019 iPhone models roll around, Apple and Qualcomm may have settled their legal disputes and Qualcomm may be willing to offer Apple price concessions to win back some of the iPhone business. 

One thing that works against Qualcomm is that even though Qualcomm's modem technology is generally superior to Intel's, it seems likely that Apple will want to continue to, at a minimum, equip some of its iPhone models with Intel's modems.

If Apple continues to dual-source modems for each variant of the iPhone (rather than, say, use Intel chips exclusively in lower-end models and Qualcomm modems exclusively in higher-end ones), then there's a good chance that Apple will artificially limit the capabilities of the Qualcomm-powered iPhone models to match their Intel-based counterparts. 

In that case, Qualcomm's main value proposition -- superior modem technology -- becomes pretty meaningless.