SAN JOSE, Calif. – Intel Corp. could move into third place as a provider of smartphone modems if a growing number of reports are accurate it has won a substantial portion of sockets for LTE baseband chips in Apple’s iPhone 7. Such a deal would be a significant shot in the arm for Intel’s wireless business which took cuts in applications processors in the wake of a massive reorgannounced in April.

Intel will provide more than 20 million LTE chips for iPhone 7 handsets for AT&T, according to a report from Bloomberg citing an unnamed source and Wall Street analysts. Such a deal could propel Intel into third place in smartphone modems next year from its 2015 position of a three-way tie for sixth place, according to Will Strauss, principal of market watcher Forward Concepts (Tempe, Ariz.).

Qualcomm dominated the 1.3-billion unit smartphone baseband market last year with a 57% share, followed by Mediatek at 25% and Spreadtrum at 6%, according to Strauss. Samsung was in fourth place at 3% and Huawei’s had a 2% share with a chip from its HiSilicon division used only in its own phones and not for sale in the merchant market. Intel shared last place at 1% with Leadcore and Marvell.

Given signs from Qualcomm, the supply chain in Asia and analysts, the Apple/Intel deal is “a virtual certainty” according to Strauss. “Intel will probably displace Spreadtrum next year for the number three spot in units and possibly the number two spot in revenue” given the generally high average selling prices of leading-edge LTE chips, he said.

Speculation surrounds the portion of iPhones Apple sells to AT&T because, unlike Verizon, AT&T does not support CDMA on its networks. Intel’s processors do not support CDMA, a technology pioneered by Qualcomm.

Apple is one of many OEMs well known for second sourcing chips, in part to negotiate between competitors for the lowest price. For example, Apple used both Samsung and TSMC’s foundry servicesto make its latest generation iPhone A-series applications processors.

Qualcomm’s chief executive told investors earlier this year it would have to split with a competitor its baseband chip business at a major customer. “It will hurt Qualcomm, but they are going into a lot of other markets including automotive because they have realized the smartphone market is slowing in the West,” said Strauss.

The deal would not impact the China smartphone market, the world’s largest at 28% in 2015 followed by North America at 17%, according to Forward Concepts. In the high-end LTE baseband business, Qualcomm’s share last year was a commanding 79% followed by Mediatek at just 6%, it reported.

Intel baseband chips come from its acquisition of Infineon’s wireless group in 2010 which had design wins in the early Apple iPhones. However, Intel lost those sockets to Qualcomm in the transition to LTE.

 ----Form EE Times