The iPhone 7 could have an Intel chip inside

The modem chip inside every iPhone that connects it to high-speed cellular data networks is made by Qualcomm, a San Diego-based chip giant.

But later this year, in the expected iPhone 7, it’s looking increasingly likely that at least some iPhone cellular modems will be made by a company practically synonymous with Silicon Valley: Intel.

On an earnings call Wednesday, Qualcomm CEO Steve Mollenkopf said that he expects a “major customer” will give orders to a rival, obliquely referring to the possibility that Intel has won modem orders from Apple, as has been rumoured since at least last fall.

Here’s the full quote, wrapped in CEO-speak:

“It is important to note that for planning purposes, both our near-term and long-term margin targets have consistently factored in a range of second sourcing assumptions at our large customers,” Mollenkopf said.

Later, he clarified that “we are assuming for planning purposes that that is the case” that Intel will take some of Qualcomm’s orders, possibly as soon as later this year.

Analysts told Bloomberg that they believe “second source” refers to Intel, and the “major customer” Mollenkopf referred to is Apple.

Intel has largely missed the mobile boom, even as its chips continue to power many servers and desktop computers. But the chips that Android phones run on and most wireless modems are made by Qualcomm.

Winning a part of the iPhone business would clearly be a big win for Intel, which announced major corporate restructuring and 12,000 layoffs earlier this week. When Venturebeat first reported that Intel had over 1000 employees working on an iPhone chip, one source described it as a “must-win for Intel.”

It’s believed that Apple wants to integrate Intel’s LTE modem with its own A-series processor on one chip, which would improve speed and power management.

But Intel’s win might be short-lived.

It’s rumoured that Apple is designing its own LTE modem chips in-house. It has hired a large amount of experts in wireless modems and that it has increasingly invested in its chips as a main differentiator.

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