Analysts: Low-cost Apple iPhone to be powered by Qualcomm Snapdragon processor

Analysts at investment house Detwiler Fenton are doing their checks with suppliers and have found that Apple is working on a new product for the low end of the market that uses a Qualcomm Snapdragon processor. Detwiler Fenton's note to clients says that if this product is a low-cost version of the Apple iPhone, it would make sense for the gang at Cupertino to look to differentiate the premium version of its smartphone by not letting the lower priced model offer the same quality graphics, video and processing power that would be available on the higher priced model. In addition, using the Qualcomm processor could help Apple keep gross margins at a decent level. We know what can happen to Apple if margins contract.

Apple could save money by integrating three chips used in the current Apple iPhone 5 (Qualcomm modem, application processor and the Broadcom WiFi/Bluetooth chip) into one single chip which would save Apple some money. When dealing with a low-cost model, every penny saved in procuring parts adds up on the bottom line.

For Qualcomm, the use of a Snapdragon processor for a cheaper iPhone variant would be a big win for the company considering that its contribution to Apple's iconic smartphone has been limited to parts for the modem. The investment house says that an integrated chip for a low-cost Apple iPhone could mean $15 per unit into Qualcomm's coffers. That might considered found money by the chip maker considering that most Android and Windows Phone models are powered by a Qualcomm Snapdragon processor.

source: Forbes