Qualcomm shares fall as report says Apple will dump chips

(Reuters) - Qualcomm Inc shares fell 2 percent on Monday after KGI Securities said Apple Inc might drop the chipmaker in favor of Intel Corp as the supplier for modem chips in its next generation of iPhones.

Qualcomm has been a supplier of components to Apple for years but the relationship took a bad turn last year when Apple accused Qualcomm of overcharging for chips and refusing to pay some $1 billion in promised rebates.

"There is speculation that Apple might drop Qualcomm altogether for its next generation phones and I think that's part of the reason the stock is down today," said Angelo Zino, an analyst from CFRA Research.

The report from KGI came as Broadcom Ltd sweetened its bid to buy Qualcomm to more than $121 billion from an earlier $103 billion.

According to technology news website 9TO5MAC, KGI said that Intel could meet Apple's technical requirements and offer more competitive prices.

Reuters has not seen the note from KGI, whose Ming-Chi Kuo is among the financial world's best known Apple analysts.

Intel shares were up 1 percent at $46.66.

Apple could not immediately be reached for comment.

(Reporting by Supantha Mukherjee and Laharee Chatterjee in Bengaluru)