As it has in the past, Apple is using Qualcomm modem chips in some of its next generation iPhones, and Intel Corp.'s (INTC) modems in others. But Apple is throttling the performance of the Qualcomm modems, or turning off features of the modem that make them more advanced than Intel's, in order to maintain consistent performance across all of its devices.
Apple has traditionally opted not to rely on a single supplier for components, so the likelihood of it moving to all-Qualcomm powered iPhones is unlikely, and that's particularly the case given the two companies' ongoing dispute. Earlier this year, Apple sued the company for $1 billion and claimed that Qualcomm was charging unfair prices for licensing its chips and has maintained an illegal monopoly over the market. In turn, Qualcomm has sought to have the U.S. International Trade Commission ban imports of some iPhones on the grounds of patent infringement.
Apple likely chose to keep using Qualcomm's modem chips because, for now, it is the only firm that makes chips capable of working on Verizon (VZ) and Sprint's (S) evolution-data optimized (EVDO)/code-division multiple access (CDMA) networks.
"Last year, Qualcomm supplied the baseband to CDMA versions of iPhone and Intel supplies basebands to global system for mobile communications (GSM) versions, and based on information available at launch, that doesn't appear to change this year," said Raymond James analyst Chris Caso. "Intel's baseband does not currently support CDMA -- therefore the GSM versions of iPhone still won't work on CDMA networks such as Verizon, Sprint, at Japanese carriers, or at China Telecom."