On Twitter, user Arkthub sent me a link to a forum post containing an interesting rumor about a key component inside of Apple's (NASDAQ: AAPL) 2017 smartphone lineup. The forum post, which appears to have originally shown up on website TheLayoff.com, essentially says the following:
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- Apple won't use Intel's (NASDAQ: INTC) upcoming XMM 7480 cellular modem in the next-generation iPhone for several reasons, which essentially boil down to the fact that the 7480 is technologically inferior to competing solutions.
- Apple will instead use Qualcomm's (NASDAQ: QCOM) Snapdragon X12 modem as well as the follow-on to the XMM 7480, known as the XMM 7560.
Although on the surface this rumor might seem reasonable, it doesn't quite make sense upon further thought.
The XMM 7560 probably won't be ready
Intel CEO Brian Krzanich has made it clear that the company intends to release new stand-alone cellular modems at an annual clip. Intel began shipping the 7360 during the second quarter of 2016, so it makes sense that the follow-on to 7360, which Intel calls the XMM 7480, will begin shipping in the second quarter of 2017 -- just in time for Apple's next-generation iPhone models (if Intel wins the spots, that is).
Image source: Apple.
It seems very unlikely that Intel would have the follow-on to the XMM 7480, known as the XMM 7560, ready for commercial deployment in time for the iPhone 8 launch. After all, if the XMM 7560 were going to be all set for commercial deployments just a year after the XMM 7360 shipped, then wouldn't it make sense for Intel to just cancel the XMM 7480 altogether?
So, at the very least, this part of the rumor doesn't appear to be likely.
What modems will be inside of the next iPhone, then?
The following is pure speculation on my part -- there haven't been many leaks about the next-generation iPhones, particularly with respect to the individual components and suppliers thereof that will be in the phones.
However, key Apple supplier Broadcom (NASDAQ: AVGO), which supplies radio frequency (RF) and Wi-Fi connectivity components for Apple's iPhones, has indicated on several occasions that it expects to enjoy dollar-content increases in successive iPhone generations.
Increased RF content suggests enhanced wireless capabilities, which not only helps Broadcom's business, but also tells us that cellular modem upgrades are probably on the way.
The iPhone 7 and iPhone 7 Plus use either Intel's XMM 7360 or Qualcomm's Snapdragon X12 depending on the model. The Snapdragon X12 is more capable than the XMM 7360, but Apple appears to be artificially restricting the capabilities of the former to ensure parity of wireless specifications of both.
Image source: Qualcomm.
One hypothesis that I've put out there in the past is that Apple could deliver better wireless capabilities in its rumored OLED iPhone model compared to the capabilities found in the more mainstream models. In that case, I could see Apple using Qualcomm's Snapdragon X16 modem (i.e., gigabit-class LTE) in the OLED model, and then sticking with the X12 or using the Intel XMM 7480 in the other ones.
The X12 would, once again, need to be "sandbagged" to bring it to parity with the XMM 7480 (the X12 supports up to 600 megabits per second download speeds; the 7480 supports just 450 megabits per second).
We'll know more in about eight months when Apple formally unveils its next generation iPhone models.
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Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of and recommends Apple, Qualcomm, and Twitter. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool recommends Broadcom and Intel. The Motley Fool has a disclosure policy.