Apple's relationship with Qualcomm has become increasingly strained as the legal battle between the two companies intensifies. Apple believes that Qualcomm is only entitled to 'one reward' stating that they should be allowed to charge for either a patent license or a chip, but not both.
Given the strife between Qualcomm and Apple, Intel hoped to provide an even higher percentage of modems this year; however, it's the first year that Intel will be fabricating its own modem chips using its 14nm process. Apple is apparently waiting to see how well Intel fulfills orders. If the company underdelivers, Qualcomm will make up the balance on top of the 30% it's planning to provide. However, if Intel produces enough chips on time and on budget, it could get over 70%, says a source.
As of now, our source says, the modem-chip yield rates are not what Intel expected. Only just more than half of the chips being produced are keepers. The Intel engineers are confident they can work the bugs out and push up the yield rates before production ramps into high gear in June and July.
Previously, Apple has used Intel modems for AT&T and T-Mobile in the U.S. and Qualcomm modems for Verizon and Sprint which require CDMA support. Now that Intel's new 7560 modem supports both CDMA and GSM, Apple doesn't need to rely on Qualcomm.
More details in the full report linked below. Please follow iClarified on Twitter, Facebook, Google+, or RSS for updates.