Intel shock decision raises doubts about whether 5G can revive smartphones

17 Apr 20191.12k Views

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Bob Swan, Intel’s chief executive officer, at Mobile World Congress 2019. Image: Intel Corporation

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The smartphone industry is in its third year of decline, but 5G may not be the antidote it needs.

California chip giant Intel said it is exiting the 5G smartphone business and will instead focus on opportunities for 4G and 5G modems in personal computers, internet of things (IoT) devices and other data-centric systems such as cars.

The decision came hours after smartphone and computer giant Apple announced a settlement with Qualcomm, ending two years of bitter litigation as the two companies agreed to a six-year licence agreement and a multiyear chipset supply agreement.

‘5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property’
– BOB SWAN

The decision by Intel to leave the smartphone 5G market raises questions over whether 5G can actually revive the flagging smartphone business, which is now in its third year of decline.

It has been reported that Apple had been concerned about having Intel as a sole supplier of 5G chips, and questions about whether it could meet its 5G schedule may have prompted the settlement with Qualcomm.

The cloudification of the network

Intel said that it will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020.

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” said Intel CEO Bob Swan.

“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property.

“We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com