Apple has notified Intel that it won’t be using its 5G chips for the 2020 iPhone models. With this Apple’s decision, Intel has reportedly paused development on a modem codenamed “Sunny Peak” and has redirected its team on other Intel efforts.
The news does not come as a surprise as in June, Bloomberg reported that Apple was looking to shift away from Intel and was planning to use MediaTek chips for its futuristic communications components.
The fact that Apple will not be using Intel chips might have wide consequences, however, Intel is now reportedly focusing on improving its product in an attempt to win Apple back for the 2022 iPhone lineup which means all hope is not yet lost for the US-based chip maker.
Of course, by 2020, Intel’s modem business may be better than ever. In February, as the legal action between Apple and Qualcomm intensified with billions of dollars at stake, a report claimed that the Cupertino-based iPhone maker will reportedly use Intel baseband chips for its devices in 2018 to reduce its reliance on Qualcomm.
Thus, it will be interesting to see what Apple plans to do come 2020. Earlier media reports said that Apple will use its own in-house chips for its PC business beginning from 2020. This will boost its financials and could make Apple save $500 million a year, said Merrill Lynch, wealth management division of Bank of America.
‘The insourcing of chips could benefit Apple by not being dependent on Intel's processor cycles, by lowering the Mac costed bill-of-materials by approx.. $40-50 and by potentially streamlining and reducing R&D spend,’ analyst Wamsi Mohan wrote in a note to clients on Monday.
Mohan said Apple can improve its product development times if it uses its own chips.
Apple and Intel have enjoyed a long partnership ever since Apple made the switch to Intel CPUs with the 2006 MacBook Pro and iMac, but recent trends have made the breakup between them inevitable.
Stagnated Intel’s chip improvements at a time when Apple’s innovation has accelerated could be a strong reason for Apple moving away from Intel.
According to media reports, iPhone systems-on-chip are outperforming laptop-class silicon from Intel’s Core line. Also, the future that Apple is aiming will be better served by its own chip designs.
Apple started designing its own iPhone chips because it wanted to reduce dependence on Qualcomm. A year ago, Apple started making its own graphics processors because it did not want to rely on Imagination Technologies. Apple acquired maker of its Touch ID system and created its own Face ID system for iPhone X.
Apple is also reported to be secretly developing its own MicroLED screens for the Apple Watch.
In February, a report by Taiwanese business group KGI securities claimed that the Cupertino-based iPhone maker will reportedly use Intel baseband chips for its devices in 2018. Apple shared baseband chip orders for iPhones 7 with Qualcomm and Intel. For 2018 devices, the company is set to rely on Intel as the exclusive supplier, which claims it can meet Cupertino-based company's technical requirements and offers more competitive prices.
However, Ming-Chi Kuo, a KGI analyst, believes that Apple would give about 30 per cent of the orders to Qualcomm because benchmarks showed that units with the Qualcomm baseband chipset performed better than the ones with Intel hardware.