Apple had sourced cellular modems from Qualcomm for the iPhone models that launched between 2011 and 2015, but added Intel as a second source with the release of the iPhone 7 series in 2016. Apple continued its practice of dual-sourcing cellular modems with the 2017 iPhone models. As it is becoming clear that world is moving towards 5G, What will be the company’s strategy?

What was Intel’s Sunny Peak Project?

Intel had been working on a chipset called “Sunny Peak”, a combination of Wi-Fi and Bluetooth radios, which Intel was producing with Apple in mind. Their executives apparently expected Apple would be the “main volume driver” for the part and following Apple’s notification, they redirected the team’s focus to other 5G-related projects.

On July 4, Israeli financial daily, Calcalist, published details of leaked internal Intel documents on its tech blog which stated that Apple is leaving behind Intel’s 5G cellular modem chips for iPhone models to be released in 2020. This sent shock waves through the industry.

However, within the following two days, it emerged the Israeli bloggers wrongly thought Sunny Peak as a combination of 5G, Bluetooth and WIFI. That misunderstanding prompted Intel to clarify, via its spokespeople that “the Intel 5G modem part of the story is inaccurate”–thereby confirming that Apple is not interested in the Bluetooth and Wi-Fi connectivity.

Calcalist has now updated its article to say Intel’s Bluetooth and Wi-Fi chip had been dropped due to a lack of interest from Apple, and not necessarily its 5G modem chipsets.

Why Apple ditched Sunny Peak?

It is unclear why Apple opted not to use Sunny Peak, but the internal documents speculate that it resulted from many factors. The introduction of the WiGig Wi-Fi standard, which would have formed part of Sunny Peak, is said by executives to bring “new and unanticipated challenges” to mobile devices, and could have contributed to its downfall.

While the report concerns the Sunny Peak project, it does not indicate that Intel is being cut out of the supply chain completely. They are currently providing modems to Apple alongside Qualcomm, but reports suggest Apple is altering the split of supply to 70:30 in favor of Intel and aims to move away from Qualcomm modems completely by 2019.

Intel and Apple split?

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 ones. There are still rumors that the company wants to replace Intel processors in its PC’s by 2020. It is worth to be noted that there is a significant difference between deviating away from using Intel modems in phones and deciding to ditch the Intel processors in Macs.

Apple used approximately half Intel modem chips and the other half came from Qualcomm for iPhone and iPad models in 2016 and 2017. The Wall Street Journal reported that the company is designing its 2018 mobile devices to work excluding Qualcomm chips. According to the paper, Cupertino giant made the decision after the later withheld software needed to test the chips in prototype devices.

Qualcomm powered iPhone X are also performing well than their counterparts (Intel). However, the ongoing legal spat between Apple and Qualcomm (and rising licensing fees) is ultimately what drove the former to Intel’s doorstep in the first place.

In a nutshell, Apple may still use the Intel’s 5G cellular modems in future iPhones and other gadgets—just not its Wi-Fi and Bluetooth offering.