There is a chance Intel could lose its hard won place in Apple’s iPhone if the performance of its wireless modem chips continues to lag behind competitor Qualcomm, an analyst warned on Friday.
Apple finally chose Intel to supply chips for a large portion of its iPhone 7 models. Qualcomm, which had provided all of the modem chips on last year’s iPhone 6s, supplied chips for the remainder. But a variety of reports have surfaced that the Intel chips lack some features and lag behind the performance of the Qualcomm chips.
The performance tests have been questioned, however. Apple told several web sites earlier this month that its own testing “shows there is no discernible difference in the wireless performance of any of the models.” That then led to allegations Apple was throttling the performance of the Qualcomm chips to maintain parity between different iPhone models.
Just based on published technical specifications, Qualcomm’s X12 modem used in the iPhone 7 has a maximum speed of 600 megabits per second. That’s compared to a maximum of 450 megabits per second for Intel’s XMM 3360 modem, also in the iPhone 7, Tom Sepenzis, an analyst at Northland Capital Markets, pointed out in a report on Friday. And the next generation Qualcomm (QCOM) modem, the X16, has a top speed of one gigabit per second compared to the same 450 megabits per second high end for Intel’s next-gen XMM 7480 modem.
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“While Apple will certainly keep a second source if possible, it isn’t going to do so for too long if it has to handicap half of its devices,” Sepenzis wrote. “This should give QCOM a path towards recapturing all of Apple over the next two years if Intel doesn’t find an answer.”
Intel (INTC) declined to comment. Fortune asked Apple (AAPL) for comment and will update this story is a response is received.
It’s far from certain that Apple will abandon its two supplier strategy, however, Sepenzis tells Fortune. “I only mentioned it as a possibility if Intel doesn’t improve its throughput speed relative to Qualcomm over the next couple of years,” he says. Qualcomm could recapture the share lost to Intel, but the analyst says he wasn’t predicting that it “definitely would.”
