Earlier this year, there was much speculation that Intel (NASDAQ:INTC) would supply cellular modems into Apple's (NASDAQ:AAPL) iPhone 6s. In fact, about a month ahead of the launch of the iPhone 6s/6s Plus, Northland Capital Markets' Gus Richard made the bold prediction that Intel would be inside of about half of the latest iPhones shipped.
Before the first teardowns of the new devices came in, though, it was clear that this wasn't the case.
There is currently speculation that Apple is working with Intel to include the latter's XMM 7360 inside of the next iPhone, widely known as the iPhone 7, but I don't think that this is likely, either, for a variety of reasons.
That means Intel's next chance to get inside of the iPhone, in my view, is in the iPhone 7s generation. However, I believe that in light of the very aggressive product announcements/roll-outs on Qualcomm's (NASDAQ:QCOM) part, this is going to be far from easy for Intel. Here's why.
Qualcomm has taken a substantial lead in modem technology
Although it had looked for a while as though Intel was closing the gap with Qualcomm as far as modem technology goes, it looks as though Qualcomm has been able to, once again, put some serious distance between itself and Intel in this respect.
During Intel's most recent investor meeting, CEO Brian Krzanich said that devices based on the company's upcoming XMM 7360 LTE (which supports category 10 speeds meaning 450 megabits per second download, 100 megabits per second upload) modem would begin shipping in the first half of 2016.
For a device a phone that will launch in late 2016, Apple will have the opportunity to use Qualcomm's X12 LTE modem which supports faster category 12/13 (downlink/uplink) speeds (600 megabits per second and 150 megabits per second, respectively). This is what I believe the iPhone 7 will use.
Additionally, Qualcomm recently announced (via FierceWireless) that it will be rolling out a next-generation modem known as the Snapdragon X16, which will support download speeds of up to 1 gigabit per second. The company said that the first devices based on this modem will be available in the "mid-summer of 2016."
Intel has a lot of catching up to do with the XMM 7460
In light of the competitive comparison between the Snapdragon X12 LTE modem and the XMM 7360, I don't think that Intel has much of chance of wrestling away the flagship iPhone 7/7 Plus design win from Qualcomm next year.
My expectation is that the iPhone 7s/7s Plus use the newly announced Snapdragon X16 modem, which should yet again provide a big boost in features/performance over the prior generation modem.
If Intel is to have a chance of becoming a "second source" to Qualcomm for the 7s/7s Plus phones, the follow-on to the XMM 7360, known as the XMM 7460, will, in my view, need to be at feature parity with the Snapdragon X16.
I'm not ready to say that this will be impossible to achieve, but I do think it will be quite difficult for Intel to close the technology gap with Qualcomm here given the latter's rapid pace of innovation.
My guess is that Intel will announce the first details of its next-generation modems and other smartphone-related technologies at the Mobile World Congress event that will be held in February 2016.
Should Intel do so, we'll have more insight into Intel's odds of winning a spot inside of the iPhone 7s within a few months, something that should be of interest to both Intel and Qualcomm stockholders alike.