The iPhone 7 Intel Modem Controversy Explained!

The media is really having a field day on this one so I think it deserves further discussion. The rumor is that Intel has won the modem socket in the iPhone 7. The same rumor was circulating about Intel winning the modem socket for the iPhone 6 and the iPhone 5e so it really has reached urban legend status. The question I have is why does anybody really care? The modem in question was not designed by Intel, it is not manufactured by Intel, and it does not guarantee Intel another iPhone modem socket, so seriously, what is the big deal here?

First a little background: QCOM has supplied iPhone modems for the past few years. My iPhone 5, 5s and 6 has a 28nm QCOM modem. The iPhone 6s has a 20nm QCOM modem and right now QCOM is shipping a 14nm modem which is inside the latest and greatest Samsung smartphone (S7). I’m not going to get into the modem speeds and feeds debate because it is mostly “benchmarking magic.” Seriously, even Harry Potter would be impressed by some of those benchmark claims and we are all carrier speed (Verizon/AT&T) limited anyway so it doesn’t really matter.

According to Bloomberg:

“Apple Inc.’s next iPhone will use modems from Intel Corp., replacing Qualcomm Inc. chips in some versions of the new handset, a move by the world’s most-valuable public company to diversify its supplier base.

Apple has chosen Intel modem chips for the iPhone used on AT&T Inc.’s U.S. network and some other versions of the smartphone for overseas markets, said people familiar with the matter. IPhones on Verizon Communications Inc.’s network will stick with parts from Qualcomm, which is the only provider of the main communications component of current versions of Apple’s flagship product. Crucially for Qualcomm, iPhones sold in China will work on Qualcomm chips, said the people, who asked not to be identified because Apple hasn’t made its plans public.”

So they are telling us that AT&T iPhones will have a 28nm Intel modem while Verizon iPhones will have a QCOM 14nm modem? Would Apple really do this? Is Apple really going to pair a leading edge FinFET SoC with a 28nm planar modem? Let’s not forget about the infamous Battery Gate issue between the Samsung and TSMC versions of the Apple A9 SoC. Some clever fellow even made an app to tell us which chip was inside. I betcha Apple did not see that one coming:

Or will Apple use 28nm modems in all of their iPhones while their fiercest competitor (Samsung) uses QCOMs 14nm modem which is two process generations ahead of Intel?

And how much is Intel actually going to make on a modem chip that they did not design or manufacture? Certainly not enough profit to be noticeable, especially if there is Contra Revenue involved.

In the past I would have chocked this rumor up to media insanity but after Apple split the A9 between Samsung and TSMC I can only shake my head. Apple does punish its suppliers so maybe this is a warning to long time modem partner QCOM. But, by punishing QCOM Apple is rewarding TSM since TSMC manufactures the Intel modem in question so it’s all good for the fabless semiconductor ecosystem.

And just when I thought the semiconductor industry couldn’t be more interesting!