Tame Apple Press becomes Intel friendly

Opinion: Talking up this modem deal is absurd

If you believe the Tame Apple Press, Apple has saved Intel and now that it is supplying modems to the fruity cargo cult’s iPhone 7, it has nothing to worry about its falling PC sales.

This is one of the reasons Fudzilla tends to rant about a Tame Apple Press and how it is really stuffing up technology news by filling people’s heads with rubbish. This morning we had this in the Technology pages of Investors It claims without a trace of irony that now Intel is supplying modems to the iPhone 7 everything is right in the Intel camp.

“No. 1 chipmaker Intel will breeze through the PC doldrums thanks to Apple’s (AAPL) iPhone 7, but rival Advanced Micro Devices’ (AMD) three quarters of better-than-expected sales will likely “crack,” forcing shares to tumble from four-year highs,” it reported.

None of this makes sense. If all goes to plan Intel modems will be only in a third to a half of iPhone 7s. On a good day this could mean that Intel could add $ 300 million to $ 500 million in incremental sales in the second half of 2016. While this sounds great, the numbers are a drop in the ocean of Intel’s money making activity, and hardly going to make a difference to Chipzilla’s ample bottom line.

However, there are signs that the iPhone 7 will be “at best” a holding product for Jobs’ Mob. It has little new in the way of technology or design. Its only feature will be an annoying wi-fi headphone which will mean users will have to scrap their old ones. At worst the iPhone 7 will be a disaster for Apple. Users will look at the fact it is behind its rivals and offer them little and decide that it is better spending their money on something which is more value for money. If it sells less this is bad news for Intel.

The Tame Apple Press’s new love of Intel is actually part of Apple’s attempts to rein in its suppliers. Qualcomm has been supplying Apple with modems for ages, but Jobs’ Mob has been leaning on its suppliers for price cuts. The rational is that if Apple is going to sell less phones it wants to make sure that its whopping margins are expanded to meet the shortfall.

We have seen this taking place as Apple has been demanding price cuts from its Asian suppliers. However, putting the fear of Jobs into Qualcomm is a trickier proposition. For a start Apple needs Qualcomm more than it needs Apple. Intel modems might not be bad, but they have not got the same track record or flexibility as Qualcomm’s. In fact they can only be used in markets where the carriers can support them.  Qualcomm has more experience in making modems and that it can support more markets and territories too. China, EU and US are all using different LTE / 4G standards and frequencies. Qualcomm can get into all them, Intel cannot.It also lacks the manufacturing experience of making millions of modems. Its previous experience has been making modems mostly for Asus which is not a bulging CV.

Apple is hoping that it can bluff Qualcomm to cutting its prices by moving to Intel.

Although we can’t be certain, given its history, Intel has probably already cut its prices so that it can hop into bed with Apple. None of this should really pressure Qualcomm to move at all, unless Intel can improve its modems to the point where they will run anywhere and at the same speeds.

Talking up Intel in this situation only helps Apple while acting as a smokescreen for its desperate price cutting action.