Pic Xgold

Intel's X-Gold 726 baseband, which is part of the company's XMM 7260 discrete modem solution. Image source: Intel. 

Venture Beat recently published a piece in which it claims that Intel (NASDAQ:INTC) has roughly 1,000 engineers dedicated to getting its soon-to-be-launched XMM 7360 stand-alone modem inside of Apple's (NASDAQ:AAPL) next-generation iPhone, widely referred to as the iPhone 7.

Although I don't doubt that Apple would like to introduce Intel into its supply chain as a modem supplier (if only to get pricing leverage over market leader Qualcomm (NASDAQ:QCOM)), it doesn't seem likely that Intel would be able to win the iPhone 7. Here's why. 

Lack of CDMA is already a "deal breaker"
Right off the bat, we know that Intel's XMM 7360 stand-alone modem does not integrate support for the CDMA EV-DO standard. This would mean that Apple would have to create multiple variants of iPhones for different carriers (i.e., ones that support CDMA and ones that do not).

The reason that I'm skeptical that Apple would actually do this, though, is that with the iPhone 6s we saw Apple essentially release two models of each of its respective new iPhones: ones with support for LTE band 30 and ones without. Supporting a broad range of carriers and regions with as few models as possible is good from a supply chain perspective. It also allows Apple to introduce carrier-agnostic programs to customers such as the iPhone Upgrade Program

Other than that, the cellular standards/bands supported across the various models appear to be identical.

It is the fact that Apple has created what essentially boils down to "world phones" with the iPhone 6s/6s Plus that makes me skeptical that it would go ahead and "re-fragment" its iPhone line with the iPhone 7.

Putting aside the CDMA argument
Even if we pretend that the lack of CDMA in Intel's modems isn't a barrier to winning the Apple business, there are other considerations as well that effectively keep Intel out of the running this round.

The current iPhone 6s/6s Plus use Qualcomm's (NASDAQ:QCOM) MDM9x35 baseband -- a chip built in TSMC's (NYSE:TSM) 20-nanometer manufacturing technology. This chip supports 300 megabits per second maximum theoretical download speeds and 50 megabits per second theoretical upload speeds.

The follow-on to this chip from Qualcomm -- and what Apple will likely use in the iPhone 7 -- is the MDM9x45. This chip supports 600 megabits-per-second maximum theoretical download speed and 150 megabits-per-second maximum theoretical upload speed.

In contrast, the Intel XMM 7360 chip that Venture Beat claims Apple will use in the iPhone 7 supports "just" 450 megabits-per-second maximum theoretical download speeds and 100 megabits-per-second maximum theoretical upload. It's also built on an older 28-nanometer manufacturing technology, which could mean a power consumption disadvantage relative to the comparable Qualcomm part.

The XMM 7360 would obviously provide a feature-boost from the current MDM9x35, but it doesn't meet the specification of the MDM9x45. And, unless Apple intends to completely drop Qualcomm from the iPhone 7 (a development that seems incredibly unlikely), it doesn't make sense for Apple to buy a part with superior capability for some portion of its phones and one with lesser capabilities for another portion.

Don't expect Intel Inside an iPhone until the 7s, at the earliest
Intel recently picked up the CDMA modem assets of VIA Telecom and, by its XMM 7460 generation, should migrate its modems away from old foundry 28-nanometer manufacturing technology and onto its 14-nanometer manufacturing technology. Intel has signaled a yearly cadence for its stand-alone modems, so I expect this one to begin shipping to customers by the end of 2016 to appear in devices in 2017.

If Intel can match the specifications of what Qualcomm has available at the time, and if it can successfully integrate CDMA support into this modem, then the rumors of Apple second-sourcing modems from Qualcomm will seem a lot more legitimate to me.

Until then, as an Intel investor, I'm not holding my breath. 

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of and recommends Apple and Qualcomm. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.