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A Big Surprise From the Apple Inc. iPhone 8 Teardown

Shortly after Apple's (NASDAQ: AAPL) iPhone 8 went up for sale, iFixit got hold of one, tore it down, and, with some help from the chip experts at TechInsights, managed to identify many of the key chips inside it and publish its findings.

As is the case with each new generation of iPhones, there's a lot of cool stuff inside the iPhone 8 and 8 Plus. Perhaps the most surprising revelation from the tear-down, though -- at least to this Fool -- was Apple's selection of a cellular modem in the versions of the phones destined for networks that require support for the CDMA standard.

Since the launch of the iPhone 7 series of smartphones, Apple has built versions of its iPhones that are compatible with networks that utilize the CDMA standard, as well as versions that aren't. Apple doesn't build separate models like this for no reason. It wishes to dual-source cellular modems from both market leader Qualcomm (NASDAQ: QCOM) and fast follower Intel (NASDAQ: INTC), but Intel's modems don't yet support CDMA networks -- though Intel is prepping a new modem for launch next year that will finally support the standard.

Tear-down reports have been published for both the Intel- and Qualcomm-powered versions of the new iPhones. The Intel-powered phones use Intel's new XMM 7480 LTE modem, which was completely expected. What wasn't expected was that the Qualcomm-based iPhones use Qualcomm's most capable standalone LTE modem, known as the Snapdragon X16.

What's the big deal?

Ahead of the publication of the tear-down reports, I had expected Apple to choose Qualcomm's relatively mature Snapdragon X12 LTE modem for the Qualcomm-based versions of this year's iPhone.

The Snapdragon X12 is a generation old at this point, but in terms of peak theoretical speeds, it's comparable to Intel's new XMM 7480. Apple reportedly throttled the X12 in the iPhone 7-series smartphones to bring them to parity with the Intel XMM 7360, and since I expected Apple to want to maintain feature parity between the two devices, it seemed reasonable that Apple would use an older-generation Qualcomm modem, if only to save some money, since older components tend to cost less than newer ones.

That expectation was clearly wrong.  The Snapdragon X16 inside the Qualcomm-based iPhone 8 and 8 Plus offers higher peak download speeds than the XMM 7480 in the Intel-based iPhones -- a gigabit per second for the Qualcomm modem, and just 600 megabits per second for the Intel modem.

At this point, it's not clear if Apple is intentionally throttling the Qualcomm-based iPhones, or if the Qualcomm-based iPhones can achieve higher peak speeds than their Intel-based counterparts. Either way, the significant disparity in potential cellular capabilities between the Qualcomm-based iPhones and the Intel-based ones may explain why Apple avoided calling attention to the cellular capabilities of its new iPhones when it announced them.

Some implications

In addition to the fact that Qualcomm-based iPhones have chips capable of faster speeds than the Intel-based iPhones, there's another thing to consider: power efficiency and battery life. Intel hasn't disclosed what manufacturing technology its XMM 7480 is built on, but considering Intel's silence on the matter, I'd imagine that it's either a foundry 28nm or 20nm technology. By contrast, the Snapdragon X16 is known to be manufactured using Samsung's (NASDAQOTH: SSNLF) 14nm LPP manufacturing technology.

If I'm right that the 7480 is being built using a foundry 28nm or 20nm technology, that could mean a sizable power consumption advantage for the Qualcomm part simply by being built on a more advanced technology.

Looking toward the future

Apple seems to be increasingly serious about using the best cellular modems in its phones -- subject, of course, to the constraint of needing to dual-source this component. To that end, I expect that Apple's next iPhone will use Intel's upcoming XMM 7560 LTE modem in some models and Qualcomm's upcoming Snapdragon X20 LTE modem in others.

On paper, the Snapdragon X20 LTE modem should be superior to Intel's XMM 7560, as Qualcomm claims peak download speeds of 1.2 gigabits per second for the X20, compared with Intel's 1 gigabit per second for the XMM 7560. But the gap between the Intel-based phones and the Qualcomm-based ones should at least continue to narrow.

Moreover, the two next-generation modems should be more comparable in terms of manufacturing technology. The Snapdragon X20 is expected to be built using Samsung's 10nm LPE technology, which should be denser than Intel's 14nm technology, but those technologies should be in the same ballpark in terms of chip size and power efficiency.

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Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of and recommends Apple. The Motley Fool owns shares of Qualcomm. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.