Intel's about to make over $1 billion thanks to Apple
AP
The report says Intel may capture half of all modem chips powering the upcoming iPhones, which could amount to as much $1.25 billion in additional revenue. It writes:
"Apple has been evaluating Intel's model for a while. We now believe that Intel will capture roughly 50% of Apple's modem business in the upcoming iPhones due to launch September 9th. Further, assuming a 50% share of modem business in the new iPhones we estimate that this win could represent $750M to $1.25B in revenue for Intel in CY16. This is a marque win for Intel and would go a long way to reducing the mobile business losses."
A little over $1 billion in additional revenue for the whole year isn't big enough to move the needle at Intel, a $140 billion chipmaker that made over $13 billion in sales last quarter alone.
But Intel has been struggling in the mobile business for years, and signing up Apple as a major customer would mean a lot to them. Intel's been looking for ways to get back in the mobile game for a while, as Intel Chairman Andy Bryant said at the annual investors meeting last year, "We will not continue to accept a business with multi-billion dollar losses. But this is the price you pay to get back in and we will get back in."
Perhaps in a way to hide its loss in its mobile business, Intel combined its PC and mobile chip groups into a single unit called the Client Computing Group this year. Last quarter, the Client Computing Group made about $1.6 billion, down roughly 38% from the same period of last year.
Apple has used Qualcomm's modem for years, according to VentureBeat, who reported in March that Apple and Qualcomm have an "uneasy relationship" now. Qualcomm saw its revenue drop 14% last quarter from the previous year, and has announced plans to cut 15% of its workforce.
Intel and Apple were not immediately available for comment on this story.
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