Intel Working to Chip Away at Qualcomm's Lead to Get Into iPhone

NEW YORK (TheStreet) -- As Intel (INTC - Get Report) prepares to wrap up its annual developers' forum Thursday, the semiconductor giant is banking much of its future on smart and connected personal technology products, or what the company, CEO Brian Krzanich and so many others have dubbed the Internet of Things.

Whether that includes Apple (AAPL - Get Report) iPhones using Intel's communication modem chips, still remains a mystery.
Kirk Skaugen, Intel's senior vice president and general manager of client computing, said in an interview at Intel's 2015 developer conference the company was "starting from scratch and from a low position" in the smartphone modem market. However, Skaugen said Intel believes it can make a dent in Qualcomm's (QCOM - Get Report) dominance.

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"It's [smartphone modems] very competitive, "But people are looking for a choice and we can lead in communications as well as computing."
Getting its chips into the iPhone, and taking some business away from rival Qualcomm (QCOM - Get Report), will be crucial for Intel's plans for its modem technology to lead future growth, according to analysts and semiconductor industry officials.
In a way, Intel isn't a stranger to the smartphone modem chip industry. The company acquired Infineon back in 2011, which supplied communications baseband chips for the iPhone 3G. However, Qualcomm soon gained Apple's business and grabbed a lead in the industry that it hasn't released since.
Apple is expected to debut the next version of the iPhone at a company event in September, and it's often tight-lipped about who supplies the products for its devices. Usually, it's outsiders, such as the website iFixit, who tear-down the iPhone who reveal what chips are powering the products.
"Everybody has lagged Qualcomm," said Cody Acree, who covers Intel for Ascendiant Capital Markets. "Intel's [current] modem is just getting there. Its integrated chip is just reaching prime time at the end of this year."
According to research firm IDC, Qualcomm claimed more than 80% of the worldwide market for 4G mobile-phone chips in 2014, while Intel didn't reach 1% of the market. Intel, itself, has acknowledged it trails Qualcomm by a wide margin in the market for 4G mobile phone chips.

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