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Intel exits 5G smartphone modem business in wake of Apple/Qualcomm settlement

By midian182 · 5 replies
Apr 17, 2019
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  1. The battle between the tech giants started two years ago when Apple sued Qualcomm for $1 billion over claims it was abusing its position as the leader in cellular technology—using Qualcomm’s chips also required customers to pay licensing fees for its patents.

    The bad blood led to multiple lawsuits in different countries, but yesterday the pair reached an agreement to end the fighting. A six-year licensing deal will now see Qualcomm provide Apple’s mobile modem chips.

    The legal spat had seen Apple move away from Qualcomm and use Intel as the sole provider of its iPhone modems last year, and Chipzilla was set to provide the 5G modems in 2020’s handsets. But while Intel was adamant its XMM 8160 would arrive in the second half of this year, Apple wasn’t convinced it could deliver on this promise. With no other supplier likely to have 5G chips ready in time, it was speculated that Apple could use an in-house solution.

    Now that Apple has settled with Qualcomm, however, it doesn’t have to worry about its 5G future. And while it might be too late for a 5G iPhone this year, expect Qualcomm’s modems to appear in 2020’s handsets.

    Soon after the announcement, Intel said it would be exiting the 5G smartphone business. “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 realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

    Intel will continue to produce 4G modems for customers, but we won’t see any 5G smartphone modems from the company. Intel refused to say if it made the decision before the Apple/Qualcomm announcement or because of it.

    The news also means Huawei’s offer to provide Apple with its 5G modems is off the table.

    Permalink to story.

  2. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,545   +1,536

    Announcements like this (and the Apple/Qualcomm deal) don't happen overnight. Clearly discussions involving all 3 companies had been ongoing for awhile and this was the result. Winner: Qualcomm, Loser: Intel.

    Does Apple win or lose? That's a lot harder to figure out. We can assume at least a short-term win as they clearly needed modems in their iPhones and Intel wasn't able to meet the demand.

    I suspect a 6-year deal with Qualcomm means the rumours of Apple going "in-house" for their modems were false (and probably planted by Apple).

    Does this mean that Apple will be forfeiting a bit of their profit margin over the next few years? Probably... but that profit margin is so obscenely high anyways that they can easily afford to.

    Qualcomm is the clear winner here, as in one stroke they regain one of their biggest clients (and for 6 years!), and as a side bonus, have all of Apple's litigations against them dropped (yes, they dropped their suits against Apple, but those were solely reactionary in the first place).

    Intel is the loser here - they lose a huge client, almost certainly due to their manufacturing issues, which are also plaguing their CPU division. Still, Intel is a "big boy" and they'll still make billions... so I'm not crying too hard for them either!
    poohbear likes this.
  3. VitalyT

    VitalyT Russ-Puss Posts: 4,476   +3,035

    Chicken s##t!

    Weaseling out of a healthy competition, just like that!
    EEatGDL likes this.
  4. Dimitrios

    Dimitrios TS Guru Posts: 463   +345

    With INTEL's actions lately, I swear Steve Ballmer must be secretly working at INTEL.
  5. Cubi Dorf

    Cubi Dorf TS Booster Posts: 144   +51

    Agree. Also Winner is Apple customer because intel modem are not as good. apple customer getting better product.

  6. Puiu

    Puiu TS Evangelist Posts: 3,435   +1,894

    They most likely were forced to stop making 5G modems.

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