Two days after a report claimed that Apple is going to buy Intel’s smartphone modem business, the Cupertino-based giant has confirmed the development and provided more clarity on the deal. Apple and Intel have signed an agreement for Apple to acquire “the majority” of Intel’s smartphone modem business. The deal, which is valued at $1 billion, is expected to be closed in the fourth quarter of 2019, Apple said. The transaction, however, is subject to regulatory approvals and other customary conditions, including works council and other relevant consultations in certain jurisdictions.
As a part of the deal, about 2,200 Intel employees will join the iPhone-maker, along with intellectual property, equipment, and leases. Apple also highlighted that by combining the acquired patents for the current and future wireless technology with the company’s existing portfolio, it will hold over 17,000 wireless technology patents. These patents range from protocols for cellular standards to modem architecture and modem operation. Intel, however, will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things 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. Apple is excited to have so many excellent engineers to join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. 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,” said Johny Srouji, Apple’s Senior Vice President of Hardware Technologies.
Intel CEO Bob Swan added that the agreement will enable the company to focus on developing technology for the 5G network. “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,” Swan noted.
Previously, Apple depended on Qualcomm for smartphone modems, but Intel and Apple partnered for 5G modems for future iPhones when the Tim Cook-led company’s relationship with Qualcomm jeopardised by a patent lawsuit. In December, it was reported that Apple’s relationship with Qualcomm soured over time and, since Intel was facing a problem of heat dissipation caused by the 8060 modem chip, Apple decided to take the matter into its own hands, and posted a job listing for a cellular modem systems architect.
It is implied that the company’s plans didn’t come out as it wanted to, and after a two-year long feud, a surprise agreement was reached between Apple and Qualcomm in April. Hours after the development made headlines, Intel announced that it was dropping out of the 5G smartphone modem business. If we are to believe the analysts’ expectations and rumours, Apple will launch a 5G phone in 2020.