Update: An Intel spokesperson has contacted wfoojjaec with the following comment: ““Intel’s 5G customer engagements and roadmap have not changed for 2018 through 2020. We remain committed to our 5G plans and projects.”
Over the last few years, Intel’s mobile communication business has enjoyed significantly higher visibility and revenue thanks to one major customer win in particular: Apple. From the iPhone 7 forward, Intel has provided some of the modems for Apple’s devices, with Qualcomm handling the rest. Apple even goes so far as to disable certain modem features across both device families to keep features equal between them. But now, there’s rumor that this deal isn’t going so well. Apple has reportedly dropped Intel from its 2020 device lineup, and the company’s upcoming modem codenamed Sunny Peak no longer has a home.
The report, from Calcalistech, claims to be based on internal Intel documentation, and the document supposedly claims that Apple was the primary driver for Intel’s 5G development efforts. Sunny Peak was a combined Wi-Fi, and Bluetooth device and the same documents claim Intel will attempt to rework Sunny Peak for inclusion with Apple’s 2022 device family. At least some of the team that was handling primary work on Sunny Peak, however, will be redirected to other efforts.
Sunny Peak is not the XMM 8060 that Intel announced some months back, and therefore doesn’t represent the company’s first 5G silicon.
While we weren’t able to directly confirm this rumor, there have been murmurs of trouble between Intel and Apple before this. In late June, Northland analyst Gus Richard wrote that Apple might try to replace Intel modems with Mediatek devices while it also works on its own 5G solution. And, of course, there are still rumors that Apple wants to replace Intel in its PCs by 2020, though the difference between replacing Intel modems in its phones and the Intel CPUs it uses in its desktop and laptops is significant and should not be trivialized.
Still, these rumors land at a particularly poor time for Intel. The company is reeling following the dismissal of former CEO Brian Krzanich and the delay of its 10nm process into 2019, and possibly the back half of 2019 at that. Officially, Krzanich was dismissed for a consensual affair with a staffer. Unofficially, smart money is on the 10nm delay. Intel’s entire integration model has come under fire in recent days as well, though it’s far from the first time we’ve seen pundits argue that the company should transition to a pure-play foundry model with no real explanation of how that would work (at a minimum, it would seem to require Intel to spin off its foundry business, as AMD has done).
The larger question here is how much damage losing Apple in 2020 will do to Intel’s modem business and overall plans. If the company can make up the product volume or continue hauling in licensing wins elsewhere, it should be able to make up the difference. But if the Apple modem win was expected to provide critical momentum or licensing revenue for a major fight with companies like Qualcomm, Mediatek, and Samsung for communications revenue and market share as that industry heats up, Intel may have a larger problem on its hands.
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