Apple Inc. is using wireless chips from Intel Corp. in some models of the new iPhone 7, people familiar with the matter said, a widely expected breakthrough in the chip giant's multiyear quest to find a foothold in popular smartphones.

The Intel baseband modem chips are a replacement for those sold by Qualcomm Inc., a longtime Apple supplier which is expected to supply wireless chips for the remainder of the iPhone 7 handsets. Some analysts believe that Intel could wind up supplying chips for as much as half the handsets Apple is likely to sell.

Intel's milestone, following years of failures in the mobile market, isn't a surprise. One reason is that Qualcomm managers had signaled earlier in the year that they expected to lose some iPhone chip sales. Bloomberg in June reported that Intel would win a share of modem sales in the next iPhone.

But some component choices often aren't confirmed until research firms have a chance to disassemble new devices after they go on sale. Industry executives say decisions can change at the last minute as companies conduct final negotiations over pricing and other terms.

Apple provided new clues Wednesday about its decision along with specifications for the iPhone 7, which is scheduled to appear in stores Sept. 16. The company disclosed that some models don't support a cellular technology called CDMA, or code-division multiple access, which is used in some cellular networks and not others. In the U.S., the Verizon Communications Inc. and Sprint Corp. networks make use of CDMA, while AT&T Inc. and T-Mobile US. Inc. use different technology.

Qualcomm, which helped popularize CDMA, builds in support for the technology in all its baseband chips, while Intel doesn't. Consequently, analysts interpreted the non-CDMA models as powered by Intel chips and that models that work on the other networks use Qualcomm chips.

Those specifications are "the leading indicator" that Intel technology is in some handsets, said Patrick Moorhead, an analyst at Moor Insights Strategy.

Intel and Qualcomm representatives declined to comment. So did Philip Schiller, Apple's senior vice president of marketing, during an interview at the event Wednesday.

Apple, like other device makers, has an interest in establishing at least two suppliers of key components, said Timothy Arcuri, an analyst at Cowen Co. Besides providing a backup supply in case of manufacturing problems, multiple suppliers benefit a company like Apple by competing on price and features.

"The last major component that was not dual-sourced was the baseband," Mr. Arcuri said.

Write to Don Clark at don.clark@wsj.com

 

(END) Dow Jones Newswires

September 09, 2016 12:15 ET (16:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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