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Apple is close to acquiring Intel's 5G modem business for $1 billion

By nanoguy ยท 4 replies
Jul 23, 2019
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  1. The Cupertino giant may be looking at purchasing Intel's modem business as a way to decrease its reliance on others for crucial components needed in its devices. A new report from the Wall Street Journal says the company has been negotiating with the chipmaker and is close to signing a deal, which could be made official as early as next week if all goes well. Apple is willing to pay $1 billion or more for a bundle of key patents and engineering talent, in a move that could see the company in a much better position to make its own wireless chips, and Intel shedding some fat to focus on data infrastructure.

    Back in April, Intel pulled out of the 5G modem business, after years of heavy investments that needed a sensible reason to continue. Apple had been using the company's baseband chips in its products as leverage in a Qualcomm dispute over pricing, but the two companies ended up dropping all litigation worldwide. Then Intel CEO Bob Swan sought to clarify the company's retreat, saying that it made little sense to keep pushing in a difficult market if it lost its largest customer, and thus any chance at making a profit. From Apple's perspective, Chipzilla wasn't likely to deliver its 5G wonder chips soon enough for its own plans, and so it was forced to return to Qualcomm or risk lagging too far behind the rest of the industry.

    Interestingly enough, Intel's negotiations with Apple started almost a year ago, when the legal skirmish with Qualcomm was still ongoing. The back and forth came to a standstill as a result of the truce earlier this year, but since Cupertino managed to poach Intel's 5G engineering lead, it only makes sense to bring his entire division over. The timing of the report is also interesting, as it aligns perfectly with an earlier report this month that Chipzilla paused the sale of its modem patent portfolio as a result of an "unnamed bidder" expressing special interest in the assets.

    Apple does have a new deal with Qualcomm to use its chips for the next six years, and possibly even Samsung's. However, the company has shown a clear interest in having its own dream team to develop modems in-house and is also keen on moving every one of its products to custom architectures of its own, including the Mac.

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  2. Puiu

    Puiu TS Evangelist Posts: 3,572   +2,054

    After they gave Intel stolen IP :D
     
  3. Bullwinkle M

    Bullwinkle M TS Booster Posts: 155   +80

    I wouldn't sell Intel Modem tech to Apple at any price after what they did

    Hey, lets string Intel along for a few years and waste all their time thinking they are going to get a great modem contract from Apple just to screw over Qualcomm, then at the last minute, tell Intel to get screwed and make a deal with Qualcomm instead

    I'd rather mothball the modem devision and tell Apple to get screwed instead
     
    Dimitrios likes this.
  4. Dimitrios

    Dimitrios TS Guru Posts: 528   +393

    I like that mothball part. I gotta use that term sometime.
     
  5. Wessell Urdata

    Wessell Urdata TS Booster Posts: 53   +92

    Apple's strategy:

    1. Use a company's product, the company's value rises

    2. Suddenly stops using that company's product, making the company's stock value drop to oblivion

    3. Acquire the company at a cheap price
     

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