Apple has agreed to buy the majority of Intel’s smartphone modem business for $1 billion, confirming widespread market rumours in recent weeks. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases.
The agreement comes three months after Apple and its 5G modem provider Qualcomm settled all global litigation and agreed a fresh six year supply deal. Intel announced its plans to cancel 5G modem production within hours of that decision being reached.
Apple is believed to have a team up to 2,000-strong working on modem chips for future iPhones. Prior to settling with Qualcomm, it was restricted in options for the latest silicon to Intel, whose XMM 8160 5G modem was facing delays. The chip, which had been promised for H2, 2019, will support peak speeds up to 6 gigabits per second.
The agreement is expected to close in Q4.
Things to keep in mind regarding Apple's 5G modem acquisition from Intel:
-it's no longer a modem game, it's a 5G modem+RF game
-it took Samsung & Huawei 8 years to field comp. modem and they do the network
-Intel was behind 18-24 months; how much $ and how long to catch up?
— Patrick Moorhead (@PatrickMoorhead) July 25, 2019
See also: Apple and Qualcomm Agree to Dismiss “All Global Litigation”, Clinch Chipset Supply, Licence Deal
Apple will hold over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation, when it combines Intel’s IP for current and future wireless technology with Apple’s existing portfolio,
Intel will retain the option to develop modems for non-smartphone applications, such as PCs, internet of things devices and autonomous vehicles, the two said.
“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.”
It is not clear how much work remains on Intel’s hardware to get it to the point at which it can compete with Qualcomm’s products and be viable in Apple’s next-gen phones.
Johny Srouji, Apple’s senior vice president of Hardware Technologies said: “Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment… they will help expedite our development on future products and allow Apple to further differentiate moving forward.”