iPhones’ data speed could be slower than rivals’

Verizon, AT&T and the rest of the U.S. wireless industry have a big boast for this year's crop of smartphones. Thanks to network upgrades, devices will be able to download as much as a gigabit of data in a single second - speeds 100 times faster than before.

But that won't be the case for Apple Inc.'s newest iPhones, devices to go on sale later this year, leaving the company's most important product potentially lagging behind the data performance of rival smartphones.

The reason stems from the delicate and sometimes complicated way Apple manages the supply of the components embedded in its flagship device - in this case, the modems, which handle the connection between a phone and the cellular network.

One of Apple's suppliers, Qualcomm Inc., sells a modem capable of the 1 gigabit download speeds. Another supplier, Intel Corp., is working on a modem with the same capability, but it won't be ready for the iPhone's introduction, according to people familiar with Apple's decision.

The shares fell as much as 1.6 percent, to $152.56, in New York on Friday, the biggest intraday drop since May 17.

Apple in theory could use Qualcomm's chips. But it has an aversion to being dependent on a single supplier, and its relationship with San Diego-based Qualcomm is particularly thorny.

Apple is embroiled in a bitter legal fight with the chipmaker, accusing the supplier of maintaining an illegal monopoly, and it's seeking to loosen Qualcomm's grip on the market for high-end smartphone modems. That's why Apple will stick with Qualcomm modems for some of its new iPhones while relying on Intel for others.

Until Intel is able to offer its chips with matching features, Apple won't enable some of capabilities of the phones running with Qualcomm modems, said the people, who asked not to be identified because the plan isn't public. Apple, Qualcomm and Intel declined to comment.

Apple's decision clashes with the marketing plans of a cellular industry desperate to show off faster network speeds to grab market share. The top U.S. wireless carriers - Verizon AT&T, T-Mobile US Inc. and Sprint Corp. - have declared 2017 the year of 1 gigabit speeds.