Bloomberg News

Qualcomm Displaces Intel in IPhone Baseband Chips, IHS Says

October 14, 2011

(Updates shares in seventh paragraph.)

Oct. 14 (Bloomberg) -- Qualcomm Inc., the world’s largest maker of mobile-phone chips, is displacing Intel Corp. in the latest version of Apple Inc.’s iPhone, according to IHS Inc.

Apple is using Qualcomm’s MDM6610 chip in its new iPhone 4S, IHS said in a preliminary report. Apple had previously used baseband chips from Qualcomm and Infineon Technologies AG’s wireless unit, which is now owned by Intel.

Apple will sell more than 100 million iPhones next year, predicts Wayne Lam, an IHS analyst in El Segundo, California. Apple’s decision means that Qualcomm will be supplying the main radio for more than 80 percent of those devices, he estimates. Apple will continue to sell the older models at reduced prices, and some of those will contain the Infineon-Intel chips.

The move represents a setback for Intel, which has struggled to convert its personal-computer dominance into a bigger role in mobile devices and electronics. Earlier this week, Intel said it would be pulling back from an effort to get its chips into televisions.

Baseband processors, which convert radio signals into sound and data, are among the most expensive components. Qualcomm is supplying Apple with a chip capable of working with the world’s two dominant phone standards: the global system for mobile communications and code division multiple access.

Claudine Mangano, an Intel spokeswoman, and Qualcomm’s Emily Kilpatrick declined to calls seeking comment. Steve Dowling, a spokesman for Cupertino, California-based Apple, also didn’t immediately respond to a request for comment.

Intel Shares

Shares of Santa Clara, California-based Intel rose 11 cents to $23.50. They have gained 12 percent this year. Qualcomm, based in San Diego, climbed $1.67 to $54.98, bringing this year’s advance to 11 percent.

Intel bought Infineon’s wireless operations in January for about $1.4 billion, giving it a foothold in the mobile-phone business.

Apple is projected to sell as many as 4 million units of its new iPhone 4S this weekend as customers around the world clamor for the device. The phone has received mostly positive reviews for its voice-recognition software, speedier processor and improved camera.

--Editors: Nick Turner, Tom Giles

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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