Apple reportedly in talks to buy Intel’s 5G modem business for $1 billion

[steven36]

The Apple / Qualcomm fallout continues

 

 

Apple may be closing in on a deal to buy up Intel’s abandoned smartphone modem business for $1 billion, with The Wall Street Journal reporting today that a deal could be announced as early as next week.

 

Intel announced back in April it was exiting the 5G mobile modem business earlier this year after Apple reached a surprise settlement with Qualcomm that would see Apple once again return to using Qualcomm’s modems in its phones. Intel CEO Bob Swan went on to clarify that Intel had abandoned the modem business directly because of the Apple settlement — without Apple as a customer, the company concluded that it “just didn’t see a path” forward.

 

According to a report from Bloomberg at the time, Apple reportedly decided Intel couldn’t provide a 5G modem the iPhone in a timeframe that worked with its plans to release 5G-ready smartphones, forcing Apple to reconcile with Qualcomm after years of contentious legal disputes. Now, a deal for Apple to acquire that portion of Intel’s business, covering a portfolio of patents and staff valued at $1 billion or more, could be reached in the next week, sources tell the WSJ.

 

After the Apple / Qualcomm deal, Intel reportedly began searching for a buyer for its modem business. And Apple, it turns out, makes a lot of sense as a buyer. Prior to Apple and Qualcomm settling, Intel became the sole third-party modem provider for the 2018 models of the iPhone. And Apple has long been Intel’s only major customer for modems — nearly every other major Android phone relies on either Qualcomm or in-house solutions.

 

While Apple has a new deal with Qualcomm, the famously controlling technology company was already reportedly working on developing its own, in-house modems, similar to its existing internal CPU platform that has resulted in the iPhone and iPad’s proprietary A-series chipsets. Adding Intel’s portfolio and experience to the process — experience that includes existing work on 5G chips for iPhones — would likely only speed up that process and allow Apple to operate independent of a third party for its modems at some point in the future.

 

Source

[Infinite_Vision]

Spoiler

 

This is a good move by them.  The reason is two folds.  First, Apple have always pride themselves in producing a lot of their stuff in house.  When you produce stuff in house, you get to control the quality, the spec, etc.  Second, in the long run, they would likely save money by producing their own 5G modem because they would not have to pay Qualcomm royalty to use their patent.   In hindsight, it was a slick move by Apple to force Intel to sell them the business.  They knew Intel had no other customer besides them so they went with Qualcomm so Intel had no option but to sell because they had no other customers to buy their product.  If they didn't sell, that segment would continue to lose money and Intel was not going to let them happen.