As rumored, Apple has acquired the majority of Intel’s smartphone modem business. The acquisition will see Apple paying Intel $1 billion and will see 2,200 Intel employees join Apple along with the transfer of IP, equipment, and leases.
The announcement comes after weeks of rumors that Apple was interested in Intel’s modem business.
Acquiring Intel’s modem business will provide Apple will over 17,000 wireless patents related to modem architecture and operation. Intel is only selling its smartphone modem business here, with the company still having the ability to create modem for non-smartphone devices like PCs, autonomous vehicles etc.
“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan. “We have long respected Apple and we’re confident they provide the right environment for this talented team and these important assets moving forward. We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.”
By offloading its loss-making smartphone modem business to Apple, Intel would be able to focus its 5G efforts in other areas. Apple and Intel expect the acquisition to complete by the end of this year pending all regulatory approvals.
Intel started supplying modem to Apple with the iPhone 7 in 2016. Before that, Apple had long relied on Qualcomm for its baseband requirements but licensing issues with the San Diego company forced it to look for alternatives. While Intel was able to break into Apple’s supply chain, its modem underperformed when compared to that of Qualcomm. With the 2018 iPhone lineup, Apple entirely switched over to Intel for its modem requirements as its tussle with Qualcomm intensified which saw both companies sue each other in a number of countries.
Ultimately, right before the court proceedings were about to start in the United States, Apple and Qualcomm settled the matter outside of court with a multi-billion dollar agreement. Among other reasons, Apple was forced to settle with Qualcomm because Intel was not able to stick to its promised 5G modem development timeline which put Apple’s plan to launch a 5G iPhone in 2020 in jeopardy. The settlement between Qualcomm and Apple led Intel to announce that it is exiting the smartphone modem business entirely.Also Read:Music maker app for android
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[Via Apple]
