Intel just gave a revealing clue about how badly Apple's iPhone unit sales may have shrunk

Reuters

Tim Cook, CEO of Apple, which warned earlier this month of weak iPhone sales.

• Intel Thursday gave Apple watchers some insight into the latter's iPhone sales shortfall during the holidays.
• The chip maker announced that the revenue it saw from its cellular modems was $200 million less than expected.
• Apple is the major customer of Intel's modem chips.
• A back-of-the-envelope calculation suggests that Apple could have sold 11.8 million fewer iPhones than expected.

Intel may have just given us a better sense of how poor Apple's iPhone sales were over the holidays.

Apple may have sold as many as 11.8 million fewer smartphones than expected in the fourth quarter, based on back-of-the-envelope calculations. The calculations were derived from the shortfall Intel announced in its earnings report Thursday in its sales of modems, the communications chips smartphones use to connect to the cellular networks.

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Intel saw "dramatically weakening modem demand" in the holiday period, Bob Swan, the company's interim CEO, said on a conference call with investors. The company's modem revenue, he continued, "fell significantly below our expectations due to weaker smartphone demand."

Read this: Intel's shares plunge 8% as it misses on revenue and earnings and warns trouble in China could mean more pain to come

The chip maker said it saw $200 million less in modem revenue than it expected in the quarter. Intel didn't blame Apple, but the iPhone maker is the major customer for Intel's communications chips (we asked Intel which other smartphone makers buy its modems, but have not received a response). And Apple has already warned that its holiday iPhone sales were disappointing.

Apple pays $17 per modem for the Intel communications chips that go into the iPhone XS Max, research firm IHS Markit reported last year. Tech Insights estimated Apple pays about $23 for the modems.

$200 million buys a lot of modems

If you assume that the $200 million shortfall was all due entirely to Apple and that Intel charges around $17 a modem, the chip maker would have sold 11.8 million fewer communications chips to the iPhone maker than it expected, which likely works out to be about the same number of phones. If you use the $23 figure for modem costs, the shortfall is about 8.7 million units.

Either figure would represent a significant portion of Apple's quarterly iPhone sales. In the last four holiday quarters, Apple has sold between 74 million and 78 million smartphones. An 8.7 million shortfall would represent about 11% of typical holiday sales for the company. A 11.8 million shortfall would be about 16%.

Earlier this month, Apple CEO Tim Cook told investors that Apple's holiday revenue would be about 7.6% lower than it had previously forecast, thanks in part weak iPhone sales, particularly in China.

Just how many iPhones Apple actually sold last quarter and just how far those sales fell short of expectations may never be exactly known. The company controversially announced in November that it would discontinue disclosing the number of devices it sells.

Representatives for Apple and Intel did not respond to a request for comment.

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Get the latest Intel stock price here.