Apple has today announced taking over the majority of Intel’s modem business valued at $1 billion. This means that Apple, in the future, will be able to develop its modems that will be used in their gadget ecosystem. And the good news is that the company may leverage Intel’s modem business to develop its 5G modems that will be used in their future iPhones.
The deal will be finalized in the fourth quarter of the year, although it is still subject to regulatory approvals and customary conditions. As part of the agreement, approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment, and leases. Apple, in a statement, revealed that they would own “over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation.”
The deal, if approved, will have Apple acquire more control on technologies deployed in its iPhones. Apple already makes its own in-house chips that have set the company’s smartphones and laptops stay at the top of the bar in the industry.
Apple’s new acquisition, however, does not mean Apple will be able to ditch its dependence Qualcomm’s modems in iPhones directly –the company in April signed a six-year global patent licensing to use Qualcomm’s modems in iPhones. And even if they would try and adopt more of their own, it is no secret that Intel lags behind when it comes to the modem business. As a result, Apple will need more time before becoming fully self-reliant on modems.
It is clear that Apple is making moves to cut dependence on its troublesome partner, Qualcomm. Back in April, Apple and Qualcomm reached an agreement of the yearslong running dispute over inappropriate high fees for patent royalties that Qualcomm had imposed on them. The agreement hit hard Intel’s modem business rendering it as good as dead.
Which has been the primary reason why Intel immediately announced offloading smartphone modem business to “focus on developing other 5G technologies.” Moving forward, “Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles.”