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Analyst: Apple Unlikely To Pivot Away From Intel For 5G Tech

Analyst: Apple Unlikely To Pivot Away From Intel For 5G Tech

Reports surfaced earlier this week that Apple Inc. (NASDAQ: AAPL) is no longer interested in using Intel Corporation (NASDAQ: INTC)'s Sunny Peak wireless chip for the line of iPhones due to hit stores in 2020. The chip, intended to provide Bluetooth and Wi-Fi connectivity, was supposed to be a central component of the new iPhones; Intel has halted its development since the announcement.

Analyst: Intel Still Strongly Positioned

The Israeli publication Calcalist's initial report that Apple is no longer pursuing the inclusion of Intel chips in its first 5G phone was later corrected, as the chip in question is not a 5G modem.

"The idea that Apple would abandon its partnership with Intel to pursue a baseband of its own design is nonsensical," Charter Equity Research's Edward Snyder said in a Tuesday note.

Intel addressed the issue in a statement issued shortly after the Calcalist article was published. "Intel's 5G customer engagements and roadmap have not changed for 2018 through 2020. We remain committed to our 5G plans and projects," the company said.

As 5G is expected to proliferate rapidly in the near future, this is a welcome piece of information for Intel investors.

Apple's Alternatives

Apple could be moving chip development in-house; the company was expected to rely heavily on Intel after its recent fallout with former chip manufacturer QUALCOMM, Inc. (NASDAQ: QCOM).

Northland analyst Gus Richard recently predicted that Intel would be supplanted by Taiwanese manufacturer MediaTek, with current Apple supplier Broadcom Inc (NASDAQ: AVGO) still in the mix.

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Photo courtesy of Apple. 

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