On Friday, shares of Apple Inc. (NASDAQ:AAPL) dipped nearly 4% on worries about the company’s soon-to-be-released iPhone 8. The concerns were specifically related to the modem chips slated to be used in the iPhone 8, which will have slower download speeds than Android phones from rival Alphabet Inc. (NASDAQ:GOOG).
A report from Bloomberg highlighted the new modem chips expected to be used in the iPhone 8, citing unnamed sources. The report signaled that Apple is expected to use chips from both Qualcomm Inc. (NASDAQ:QCOM) and Intel Corporation (NASDAQ:INTC); the problem, however, is that the download speeds of each modem chip vary, which would make phones with Qualcomm chips faster than those with Intel. Qualcomm’s modem chips have cutting-edge technology allowing for increased data download speeds up to 1GB, while Intel’s chips do not have the capacity.
Apple’s policy of having more than one supplier for most integral iPhone parts has led the company to use both chips, and reduce the operating capability of the Qualcomm chips to keep all phones running at the same speeds. This reduction of quality has not been viewed positively by the market, with many investors now questioning the quality of the basket of technologies used for the new iPhone. The success of the new release (on the 10th anniversary of the first iPhone) is expected to be a function of the new technologies released by Apple – this is not a good first step.
