Intel's Market Share In Apple's iPhone 8 Could Hit 65% This Year

Intel, Qualcomm And Apple

Intel and Qualcomm are the two primary thin cellular modem suppliers for Apple’s various iPhone 7 models. Qualcomm’s modems power CDMA versions, while Intel’s modems are used in GSM/non-CDMA networks.

The latest report from Baird vindicates this thesis. Baird says Intel's market share into the iPhone 8 could reach 60–65 percent this year, up from the current 50 percent.

“We believe Intel's new baseband shipping into the iPhone8 this year will remain based on a 28nm-node design. Internally sourced 14nm node, CDMA integration are not expected until 2018,” analyst Tristan Gerra wrote in a note.

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Last month, Benchmark analyst Gary Mobley said he believes Intel could gain share at Apple despite delivering only about half the downlink speed versus comparable Qualcomm modems.

“While the Intel modems has about half the downlink speeds as the comparable generation Qualcomm modem, speed are sufficient for Apple’s needs, and the 4th -gen Intel modem handles 33 LTE bands as well as the necessary envelop tracking,” Mobley wrote in a note released in January.

Rating, Justification

Gerra, who has an Outperform rating on Intel shares, said PC supply chain inventories are lean. Supply chain consensus for PC unit growth this year ranges from a low-single-digit decline to a low-single-digit increase.

Further, the analyst also said recent motherboard redesigns support the idea that Apple may start using its own application processor in some future versions of the Macbook. This could be negative for ARM, though supply chain visibility on volumes and timing over this development remains low.

Shares of Intel closed Thursday’s regular trading at $36.18. Gerra has a price target of $42.