Apple to Acquire Intel's Modem Business

May 29, 2019 | Monday

Technology

   

While Apple might lose the battle for 5g to Qualcomm, but the firm positioned to win the war. On Thursday, Apple announced to buy the smartphone modem business of Intel. Also, this will include some patents and 2,000 Intel employees. All of these for $1 billion.

Also, it's always been the goal of Apple to develop its modems for the iPhone. So, buying all Intel IP puts up in a place to have one ready by the time its deal with Qualcomm runs out.

After the tech giant settled its royalty spat with Qualcomm in April, it had four not-so-good options for its 5g plans. The first one is to resolve with Qualcomm and get its 5g chips into iPhones by 2020. Second, the company can wait until Intel catches up with its 5g modems, which is running behind schedule. Third, go to 5g modems of Huawei. But it will be ought due to trade tensions and cybersecurity matters. And fourth, create its own 5g chips. However, this might take years, and Apple will definitely be behind its competitors.

The Decision of Apple

So Apple decided to go with settling with Qualcomm and placed the groundwork for a long-term plan to improve its modems. On the other hand, Intel has no choice but to back out of its 5g modem plans after Apple and Qualcomm signed the deal. Also, its assets were relatively cheap and alluring for Apple to scoop up and get a head start on its chips.

In the settlement in April, Apple agreed to use Qualcomm modems in the next six years. And they can extend this for a year or two. As a result, Apple has at least eight years to complete the smartphone modems Intel was having a hard time. And to get them up to par with the technology of Qualcomm.

   

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