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Home / Apple / Apple buys Intel's $ 1 billion modem business: Here's why

Apple buys Intel's $ 1 billion modem business: Here's why



So many stories in the technology world are of the variety you can't predict, but not the news that Apple is spending $ 1 billion on buying Intel's mobile modem business. In the wake of Apple leaving Intel for Qualcomm and Intel announcing the plan to get out of the modem business, this move felt almost inevitable since rumors of a deal appeared earlier this week.

  Unlike the iPhone XS that was introduced last fall, future iPhones could include Apple built-in modems.

Unlike the iPhone XS that was introduced last fall, future iPhones can have Apple built-in modems.

(Bildekreditt: Apple) [1

9659005] Apple's agreement to take on Intel's intellectual property and 2,200 employees has its roots in the late 90s and Steve Jobs & # 39; return to Apple. It goes to the core of everything that makes Apple such a formidable force today.

Apple's near-death experience

In the late 1990s, Apple almost came out of service. When Jobs returned to the company, he made a series of bold decisions that left Apple back on his feet. On the Mac page, the company embraced a Windows-focused world and just dropped peripheral and networking standards for Mac while leaving USB. IMac (and a Microsoft agreement to continue making Office for Mac) helped stabilize Apple's business and set the stage for iPod, iPhone and iPad.

But Jobs learned a lot of learning along the way to save Apple. Microsoft's software support for Mac may have helped the computer line survive, but otherwise kept the Microsoft Mac back. Most comparisons of Mac versus Windows in the early days of web focusing on Internet browsing, and Internet Explorer – the default browser on both Mac and Windows – were superior to Windows. The Mac was viewed as a child platform, largely because of software that Apple could not control.

This struck a chord with Jobs. Apple's fate was related to something the company couldn't control: Microsoft's software. What happened next would be written into Apple's core culture over the next decade: Apple created a software team to create a new Mac browser of its own, one with focus on speed and winning all comparisons with the Windows competition. The result was Safari, now Apple's browser on both macOS and iOS devices. Apple was no longer dependent on Microsoft for a key part of product success.

Yes, invented here

During the following decades, Apple has repeatedly taken strategic decisions that give it full control over the key aspects of the products. A small example: Frustrated by the USB constraints, the Apple Lightning connector designed to solve the same problems that the USB consortium finally solved with USB-C. Who designs their own contact standard? Apple, that's who.

But then it's the big one: silicon. For years, Apple has sprung from chipmaker to chipmaker to deliver the company's devices – which is, of course, quite normal because companies that make computers are not chip makers . Early in Job's second term at Apple, he was burned by IBM, promising the future of the PowerPC processor that Big Blue could not deliver. As a result, Apple Mac moved to Intel processors.

All of this led to perhaps Apple's biggest strategic feature of this century, the company's purchase of chip designer P.A. Semi in 2008. From the beginning of the acquisition, Apple has expanded the chip capabilities. Eleven years later, Apple makes some of the world's best mobile processors, giving iOS devices an advantage over the smartphone competition. Apple-designed processors make Apple Watch possible. They run Apple TV, AirPods and security and system control on modern Macs. On newer iPhones and iPads, Apple has also taken control of graphics processing.

Eleven years ago, it would seem like madness to argue that Apple could switch Macs from Intel processors to those designed by Apple itself, but here we are. These days it seems like it's just a matter of time for Apple-designed chips to be inside the Mac, and iPad Pro already turns the speed of most laptops out there.

Who brings us to Intel's modem business.

The owner of the modem

Even before Apple's cohabitation with Intel over modems, all the rumors pointed out that Apple was going to make its own modem chip. As a manufacturer of iPhones and iPads, Apple knows that mobile modems are an important part of the products – and the modem is a part Apple does not currently control. Intel's delays in building a 5G modem and Apple's patent conflicts with Qualcomm only underscored the Lesson Learned Long ago lesson when they were disappointed by IBM and Microsoft: Don't trust others for the most important things.

  Apple's modem gestures are about getting these LTE speeds to 5G.

Apple's modem gestures are about getting these LTE speeds to 5G.

(Bill Credit: Tom's Guide)

Suddenly, Apple faced the possibility that it would be years behind the competition in 5G Network . It may be OK for a year or two but in the long run it would hurt Apple's core business. Of course, Apple should start giving up its own modem design business. This is what Apple does when it gets a corner.

The recently announced transaction with Intel is just the other shoe that drops. Intel's new CEO clearly stated that the company would not be in this industry, which meant that a lot of modem engineers would be out of work and a lot of intellectual property would be brought. Meanwhile, Apple is setting up a store in San Diego near Qualcomm's headquarters, getting ready to build chips – and probably seeking some patent protection to use in future licensing with Qualcomm.

Buying Intel's business lets Apple speed up its own efforts to control its own destiny in cellular technology. (I wouldn't be surprised to see that technology manifests itself not only in iPhones, iPads, and Apple Watches, but also in Macs, AirPods, and a whole new generation of portable technology not yet born.) Jobs learned the lesson, and Tim Cook listened well. If you need something done right, do it yourself.


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