The smartphone years have not been kind to Intel. The company ignored the transition to mobile early on, allowing ARM-based processors to take an early, decisive lead. Intel’s presence in pocket computers hasn’t just been minimal, it’s been practically nonexistent. That is, until the iPhone 7.
Bloomberg first reported that Intel had worked out a deal with Apple in June, but now that the iPhone 7 has shipped, we have actual confirmation, thanks to a teardown from Chipworks. Apple may make its own processors now, but Intel’s providing an entire mobile cellular platform to the Cupertino company, the transceivers and modem that help put the “phone” in smartphone. For the first time, a flagship mobile device has Intel inside. Better late than never.
Intel’s made it into a handful of smartphones before, but this really is the first component placement at anything that could be considered serious scale. “Intel has been working eight, nine years for something like this to happen,” says Patrick Moorhead, founder of Moor Insights & Strategy. “You have the premiere smartphone brand in Apple, who has incredibly high quality and experience metrics.”
Being in the iPhone, in other words, isn’t important simply for sales. It gives Intel components Apple’s imprimatur, a potential signal to other companies that it’s ready to play in the big leagues.
Inclusion in the iPhone 7 also, counterintuitively, highlights some of Intel’s drawbacks. Intel components won’t be in every model, in large part because they don’t support the CDMA networks deployed by Verizon and Sprint. Moorhead notes that they’re also not as future-proof as Qualcomm’s high-end equivalents: Intel’s guts don’t play nice with brand-new tech that will allow for faster download speeds, whenever carriers get around to leveling up. Since people are holding onto their devices longer than ever now, some iPhone 7 owners could potentially end up feeling left out.
And however many iPhones Intel ends up in, it’s unlikely to impact the company’s bottom line much. That’s partly, Moorhead says, because Intel likely had to set a very competitive price to win Apple’s business. Mostly, though, it’s just a function of the company’s evolving business model.
“Intel’s such a big company, with such high margins, particularly on the data center but also on the PC side, that I don’t see this making a material financial impact,” says Moorhead. Intel is, after all, a cloud company. It may have missed mobile, but it dominates in servers.
That doesn’t mean that its iPhone win is just a moral victory. Its real importance? Setting Intel up for the next mobile revolution.
When Intel’s Aicha Evans took the stage at this year’s Mobile World Congress in February, she spent an hour focused not on current smartphone ambitions, but about a future cellular network standard: 5G.
We could spend a few thousand words outlining 5G in detail, but the short version should work for now. Remember the transition from 3G to 4G, how the Internet on your phone was suddenly much, much faster? It was the difference between clacking up a roller coaster’s first incline and barreling down the other side. That’s what 5G will feel like next to 4G, with some smart home and wearables support thrown in as a bonus.
Qualcomm won 4G, no question. It wasn’t even close. We’re still far enough from 5G cohering as an actual thing, though, that any of a handful of companies could position themselves as the dominant force of the next generation of mobile. One of those companies (surprise!) is Intel. “the big prize here is 5G,” says Moorhead. “But if you’re not successful in 4G, there’s no way for you to be successful in 5G.” Intel can talk all it wants about its prominent role in the future of mobile, but it’ll have a lot harder time actualizing that if it can’t prove it can handle the present. If someone can’t make a layup, you wouldn’t bet on them to dunk.
Intel declined to comment on its role in the new iPhone. Because of course it did. If you want everyone to think you’re a winner, you act like you’ve been there before.