Intel sells most of its smartphone modem business to Apple for $1bn

26 Jul 2019

Intel corporate headquarters. Image: wolterke/Depositphotos

A billion-dollar deal with Intel will see Apple hold more than 17,000 wireless technology patents.

Apple is to acquire chipmaker Intel’s smartphone modem division for $1bn.

The agreement comes three months after Apple ended a long-running dispute with one of Intel’s rivals, Qualcomm, to ensure it would have the pipeline of chips it needs for future iPhones to work on ultra-fast 5G wireless networks.

The truce prompted Intel to abandon its attempts to make chips for 5G modems, effectively putting that part of the business up for grabs.

Apple takes on thousands of Intel employees

Barring any complications, the deal is expected to close some time between October and December. Once completed, Apple will take on around 2,200 Intel employees.

Combining the newly acquired patents for current and future wireless technology from Intel with Apple’s existing portfolio, Apple will now hold more than 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation.

The company said in a statement on the deal that Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet of things (IoT) devices and autonomous vehicles.

“We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users,” said Johny Srouji, SVP of hardware technologies at Apple.

Srouji noted that the company will be welcoming “excellent engineers” to its cellular technologies group through this acquisition. “They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward,” he said.

5G developments

Apple’s purchase of Intel’s smartphone modem patents and other technology could bolster its attempt to build its own line of 5G chips and lessen its dependence on Qualcomm. The iPhone maker’s licensing deal with Qualcomm expires in April 2025.

Apple is not expected to release an iPhone that works on 5G networks until September 2020, putting it behind rivals such as Huawei and Samsung, which already make handsets that work with the faster wireless technology.

Intel CEO Bob Swan said the deal will enable Intel to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology created by its team.

“We’re confident [Apple provides] 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.”

– PA Media, with additional reporting from Elaine Burke

Intel corporate headquarters. Image: wolterke/Depositphotos