Updated from 9:00 a.m. EST to provide additional analyst comments in the tenth paragraph.NEW YORK ( TheStreet) -- Rumors continue to circulate about a deal in which Intel (INTC - Get Report) will make chips for Apple's (AAPL - Get Report) iPhone and iPad. It's not what you think though.
With the PC market stagnant and in decline and Intel's mobile business not taking off like it had hoped, many have said Intel has "lost the mobile race" to other semiconductor companies, such as Qualcomm (QCOM - Get Report). Qualcomm, Broadcom (BRCM), Apple, Samsung and others all use intellectual property from ARM Holdings (ARMH), which holds a 90% market share in the smartphone market. An Intel spokesman declined to comment on the speculation. When Intel issued first-quarter guidance, it raised its capital spending budget to $13 billion, suggesting to some that it would be upping its foundry business, trying to get a piece of the Apple pie (pun intended).
JPMorgan analyst Christopher Danely said he believes it could be big business for Intel, especially if it wins 50% of Apple's business. "[W]e believe Intel has a decent chance to land some of the business over the next few years. If Intel were to win 50% of Apple's foundry business, we estimate it would add $3.6 billion (6%) in incremental sales and $0.08 EPS (4%) in 2017," Danely said in a research note.