It is emerging that Intel Corporation (NASDAQ:INTC) and Apple Inc. (NASDAQ:AAPL) are in talks that could see the former supplying chips for new iPhones in 2016. The two companies have until now preferred not to comment on the speculations. However, the reports are coming when Apple is said to be in a sour relationship with Qualcomm, its long-time smartphone chip supplier.
If the ongoing talks result in a deal, Intel Corporation (NASDAQ:INTC) will provide wireless chips for a special version of iPhones to be marketed in the emerging markets of Latin America and Asia. It is unclear whether an aggressive focus on emerging markets would be a move by Apple to compete in the budget smartphone segment. Apple and Samsung Electronics are facing intense competition from cheap smartphone vendors whose epitome is Xiaomi’s market share lead in China.
For the special iPhones, Intel will supply an LTE modem chip known as 7360. The chip is capable of supporting 450Mbps downloads speeds and 3X carrier integration. Intel’s 7360 modem is also cited as power-efficient, fast and well-built.
Sources have disclosed that Apple engineers have been working closely with Intel Corporation (NASDAQ:INTC) engineers in Munich, German. Following the acquisition of Infineon in 2010, Intel established its next generation LTE chips research and development base in Munich.
Before its acquisition by Intel, Infineon supplied Apple with 3G chips for iPhone. However, Apple halted the deal after Intel took charge of the company.
The reason for unease between Apple and Qualcomm, Inc. (NASDAQ:QCOM) has not been clearly explained. However, sources have cited that second sourcing, which is what Apple is trying to do by reaching out to Intel, could put the company at an advantage in its relationship with Qualcomm. Still, Apple could abandon Intel if the chipmaker fails to meet certain deadlines.
Targeting budget smartphones
On its part, Intel Corporation (NASDAQ:INTC) has been fighting to broaden its smartphone market share. The company recently unveiled a smartphone chip known as Atom X3, which is designed to appeal cheap smartphone vendors.