Shares of Qualcomm have dropped two percent after CEO Steve Mollenkopf told analysts on an earnings call Wednesday that it may lose some of its “biggest customers” as they are going with a “second source,” Bloomberg reported.
The fabless chip maker’s been Apple’s exclusive supplier of LTE modems for over three years now.
That’s about to change soon: Mollenkopf is now “assuming” that a major customer will give orders to a rival, indicating a potential loss of business for the company. Analysts said they think the customer is Apple and the rival is Intel.
Bye, bye Qualcomm—hello, Intel!
Apple and Samsung are two biggest customers of Qualcomm’s.
Samsung has already cost Qualcomm its business as the new Galaxy S7 and Galaxy S7 edge smartphones feature Samsung’s in-house designed Exynos 8890 system-on-a-chip that combines processing and graphics cores, memory and an integrated LTE modem on a single die. Samsung’s own built-in LTE modem supports Cat.12 download speeds (up to 600Mbps) and Cat.13 uploads (150Mbps maximum).
As for Apple, the next iPhone is said to pack in an Intel-made LTE modem.
Intel only a temporary solution?
The chip giant, according to one analyst, has secured orders for a “significant portion” of cellular modems on the upcoming iPhone 7. DigiTimes first reported in August 2015 that Intel might provide provide some of the modem chips for 2017 iPhones. Venture Beat corroborated the Digitimes report, claiming Intel has allocated more than a thousand engineers toward developing chips for the iPhone.
Apple will eventually build LTE modems into its own chips
Other rumors have suggested that Apple is interested to actually develop its own LTE modem and build it inside a future A-series processors, a feat that would further reduce the number of chips used on iPhones and enable additional power savings, efficiency and integration.
The iPhone 6s and iPhone 6s Plus include Qualcomm’s MDM9635M LTE chip, part of its ‘Gobi’ modem platform. The chip doubles LTE download speeds while operating more efficiently than its predecessor, the Qualcomm MDM9635M LTE modem found inside the iPhone 6 and iPhone 6 Plus. It claims, however, the same 50Mbps uplink speed as its iPhone 6 counterpart.
Image: Qualcomm’s MDM9635M LTE modem chip on the iPhone 6s logic board.