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Home / Apple / Apple buys Intel's 5G smartphone modem business for $ 1 billion

Apple buys Intel's 5G smartphone modem business for $ 1 billion



  iPhone 8, iPhone XS, iPhone XR, and iPhone XS Max.
Enlarge / From left to right: iPhone 8, iPhone XS, iPhone XR, and iPhone XS Max.

Samuel Axon

Apple today announced that it will acquire the bulk of Intel's smartphone modem business for $ 1

billion. The acquisition will bring 2,200 Intel employees under Apple's umbrella, along with various intellectual properties, leases and equipment. After the move, Apple will have more than 17,000 wireless technology patents, and Intel will continue to develop modems for PCs, vehicles, IoTs, and other non-smartphones.

The confirmation of the sale comes after a number of reports over and over-again and rumors that the deal goes back several months. A report from the Wall Street Journal earlier this week made it seem quite but certain that the conclusion of the deal was just around the corner.

Intel built its wireless modem out of an acquisition of Infineon's wireless business nearly a decade ago. The company aimed to compete directly with industry leader Qualcomm, which today dominates the modems of smartphones and many other devices. However, Intel never managed to overcome his rival on the smartphone area. Apple has historically used Qualcomm modems on the iPhone, but it has recently suffered a painful and legal relationship with Qualcomm.

Apple began sending iPhones with Intel modems, and Qualcomm sued for patent infringement. The lawsuit was filed in April, causing Intel to say it would leave the 5G smartphone modem business; Apple's make-up with Qualcomm believed that the Cupertino company would no longer rely on Intel, which raised questions about the viability of Intel's business.

By acquiring this business, Apple is looking to go its own way into the 5G time for future iPhones. Apple has also tried to reduce the dependence on third-party vendors and partners by building its own chips and other components.

Over the years, the company has undertaken to design more and more parts of the iPhone itself. This is in line with Apple's longstanding, deeply held philosophy of integrating from all sides into a product. The company's management believes this approach makes it possible to provide superior user experiences in many cases, define their own road map and improve the profit margins of each unit.

Here are the official statements of Intel and Apple spokespersons. First Intel CEO Bob Swan:

This agreement allows us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology created by our team. We've long respected Apple, and we're confident that they will provide the right environment for this talented team and these key assets ahead. We look forward to putting our full effort into the 5G where it more closely matches the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.

And Apple's Senior VP of Hardware Technologies, Johny Srouji:

We've been working with Intel for many years and know that this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users. Apple is excited to have so many great engineers joining our growing group of mobile phones and know they will enjoy Apple's creative and dynamic environment. They, along with our significant acquisition of innovative IP, will help accelerate the development of future products and allow Apple to further distinguish ahead.

Apple says the acquisition will be completed in the fourth quarter of 2019, pending government approval. [19659011]
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