Apple Inc. (NASDAQ:AAPL) Modem Contract May Be At Risk As Intel Corporation (NASDAQ:INTC) Blows Keep Coming


Wenedsay was another day of bad news for Intel Corporation (NASDAQ:INTC) because according to a note from Northland analyst Gus Richard, a new data point demonstrate that it may lose Apple Inc. (NASDAQ:AAPL)’s modem business.

Gus Richard, who rates the stock ‘sell,’ reported that MediaTek Inc., which manufactures modems, might replace Intel for the product at Apple, which he says has been rumored to be functioning on their own modem. Individuals familiar with Apple’s plans said Apple is already planning to phase out Intel chips in Mac computers as soon as 2020.

Intel’s stock and share distribution

The new wrinkle follows a Goldman Sachs note today detailing its souring outlook on Intel, after analysts met with more than 25 firms in the technology supply chain last week. Toshiya Hari and Mark Delaney, despite positive trends, wrote that Intel could stand to lose market share in the server CPU market, which it now dominates. Earlier this week, analysts at Bernstein downgraded the shares following the CEO transition and what they saw as limited upside.

Intel’s losses within the year

Within the past 7 days, Intel lost $13 billion in market worth, the CEO resigned after a relationship with a staffer and it was downgraded by two analysts. It’s been a stark momentum change for the Santa Clara, Ca.-based computer component developer, which had eyed its shares increase over the course of the year as then CEO, Brian Krzanich’s efforts to expand into new markets took hold. Intel shares, after increasing 24% in the current year through the beginning of June, have now given up much of the benefits.


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Argus Research’s, Jim Kelleher who rates Intel’s stock as buy reported that Intel faces the usual array of rival risks, but is the clear leader in microprocessors. Given the firm’s history of technology leadership, people do not expect any meaningful market share losses moving ahead.

Analysts are still downgrading the semiconductor guru.


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