Intel says it sold its cellular modem business to Apple at "a multi-billion dollar loss"

nanoguy

TS Addict
Staff member

Earlier this year, Apple poached Intel's lead 5G phone modem developer, which is widely believed to have prompted the latter's exit from that market. In July, news broke that Intel had signed an agreement with the Cupertino giant to hand over its 5G modem division for $1 billion.

It looks like Intel thinks the deal was grossly undervalued. The company describes it as a "multi-billion dollar loss," and alleges that rival chipmaker Qualcomm essentially created conditions that forced it out of the market.

At the time of the announcement, Intel was quite open about its reasons, noting that "it has become apparent that there is no clear path to profitability and positive returns." Now it's clear they were talking about Qualcomm, which is currently embroiled in an FTC antitrust probe.

Qualcomm has been trying to overturn the most recent ruling, so Intel filed a brief at the 9th US Circuit Court of Appeals that supports the FTC's decision. In it, the company explains that Qualcomm has crafted its licensing arrangements for its CDMA and LTE intellectual property in a way that chokes out potential competitors.

Specifically, Qualcomm implemented a "no license, no chips" policy that prevents OEMs from buying its chips unless they agree to a patent deal that made it expensive to enter supply agreements with rival chipmakers.

Image credit: Brent Lewin via Bloomberg

In a blog post accompanying the filing, Intel's General Counsel Seven Rodgers notes that "Intel suffered the brunt of Qualcomm's anticompetitive behavior, was denied opportunities in the modem market, was prevented from making sales to customers, and was forced to sell at prices artificially skewed by Qualcomm."

The silicon giant says it "invested billions, hired thousands, acquired two companies and built innovative world-class products that eventually made their way into Apple's industry-leading iPhones, including the most recently released iPhone 11."

In the end, that wasn't enough to make a difference, especially after Qualcomm settled all litigation with Apple in exchange for gaining the privilege of being the supplier of modems for the iPhone maker for the next six years.

Intel also pointed at Qualcomm's antitrust fines of $1 billion in China, $850 million in Korea, $1.2 billion in the EU, and $773 million in Taiwan, which it managed to reduce to $93 million. Then there's the infamous case of predatory pricing on 3G modems that killed some of its competitors and only resulted in a $272 million fine that arrived too late to save any of them from being shuttered.

In any case, Intel will still continue to sell its 4G modems in PCs, but the chipmaker is effectively abandoning the modem business in the near future. A sign of this is the recent deal with Mediatek to integrate its 5G modems on Intel-based laptops.

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Bullwinkle M

TS Addict
I mentioned in a previous article that I'd rather sit on Intels Modem tech and take the loss rather than sell it to Apple, after what Apple did to Intel with it's shenanigans and double dealings with Qualcomm

So, instead of keeping the tech inhouse and taking a loss, they sold it to Apple and lost much more than they would have by keeping it and not using it ! ? ! ??

Now, they are outsourcing CPU production to Samsung ????

I guess you really can't fix stupid!
 
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Porkous

TS Rookie
Its disappointing. In the future there might opportunities for an intel chip, modem + cpu/gpu, for example in a phablet or folded phone. Lot's of pc enthusiasts would like an intel cpu in their newest devices. Intel CPU's were too expensive and power hungry for tablets, so eventually that didn't work out for them either, to stay afloat in the market having a modem for themselves.
 

quadibloc

TS Addict
I hope this leads to Intel taking a leadership position in the fight against anticompetitive behavior. After all, AMD needs a fair chance to sell a few of its new Ryzen CPUs.
 
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negroplasty

TS Guru
"Qualcomm created conditions that forced it out of the market."

They sure did, it's called a better product and better (albeit a little shady) strategy. If Intel made a better product we wouldn't be here right now.

I don't feel sorry for Intel one bit... they deserve it. Company can't compete anymore, so instead of investing in its businesses and doing so (which it could if it had competent leadership) it makes boneheaded decisions like this.
 

EEatGDL

TS Evangelist
"Qualcomm created conditions that forced it out of the market."

They sure did, it's called a better product and better (albeit a little shady) strategy. If Intel made a better product we wouldn't be here right now.

I don't feel sorry for Intel one bit... they deserve it. Company can't compete anymore, so instead of investing in its businesses and doing so (which it could if it had competent leadership) it makes boneheaded decisions like this.
Oh no, I completely agree. This is karma: Intel is crying for suffering Intel-esque practices, a taste of its own soup.
 

Evernessince

地獄らしい人間動物園
I hope this leads to Intel taking a leadership position in the fight against anticompetitive behavior. After all, AMD needs a fair chance to sell a few of its new Ryzen CPUs.
Given the "principled technologies" debacle and the misleading and sometimes downright hilarious marketing slides, I'd say Intel is still Intel. Intel in fact still uses dirty tricks with it's compilers as well: https://www.reddit.com/r/matlab/comments/dxn38s
Many people are reporting twice the performance simply by allowing the program to use AVX2 on AMD, not just Intel. Of course, you shouldn't have to hack the program to get this, clearly the AMD CPUs are capable of much better performance simply by allowing them to use an instruction set.

If Intel's claims about qualcomm are true, that needs to be investigated.
 

yeeeeman

TS Maniac
I mentioned in a previous article that I'd rather sit on Intels Modem tech and take the loss rather than sell it to Apple, after what Apple did to Intel with it's shenanigans and double dealings with Qualcomm

So, instead of keeping the tech inhouse and taking a loss, they sold it to Apple and lost much more than they would have by keeping it and not using it ! ? ! ??

Now, they are outsourcing CPU production to Samsung ????

I guess you really can't fix stupid!
I agree. They are really lacking visionary people. 5g with its huge adoption would have brought huge revenues to Intel even if they would have lost the contract with apple.
 

Irata

TS Addict
This is a case of Vantablack calling the kettle black.

And in this case, Intel did not even have the better tech. I guess they just expected - as usually - to make up for that in incentive payments but that did not work against QC's business model and tech, so now they are crying foul.
 
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wiyosaya

TS Evangelist
Considering some of the information that is now coming out about 5G, they could end up being the big winner .....
Given sIntel's past behavior, I would not be surprised if they did this to deliberately make themselves look like the victim while knowing all along that 5G might not turn out to be a bed of roses.

TS for sIntel. I doubt that they will learn a lesson from this. Time and again, sIntel has proven that profit, or how much they can screw their customers, is the only thing that matters to them.

I find it kind of interesting that they tried to deal with crApple - another tech company only interested in addicting followers to their ecosystem, IMO.
 

wiyosaya

TS Evangelist
Given the "principled technologies" debacle and the misleading and sometimes downright hilarious marketing slides, I'd say Intel is still Intel. Intel in fact still uses dirty tricks with it's compilers as well: https://www.reddit.com/r/matlab/comments/dxn38s
Many people are reporting twice the performance simply by allowing the program to use AVX2 on AMD, not just Intel. Of course, you shouldn't have to hack the program to get this, clearly the AMD CPUs are capable of much better performance simply by allowing them to use an instruction set.

If Intel's claims about qualcomm are true, that needs to be investigated.
As a user of sIntel's FORTRAN compiler, I would not be surprised if this works for other software compiled with sIntel's compilers. Their FORTRAN and C++ compilers are essentially the same thing as their FORTRAN compiler translates everything to C++ then compiles. Unfortunately, I do not have access to an AMD machine on which to try this out - though the code is conditionally compiled to target AVX capable CPUs - if the CPU has it available.
 

wiyosaya

TS Evangelist
A serious change in leadership at Intel in the near future would not surprise me.
One aspect of this, and I am not really going to defending sIntel in what I say, is shareholders demanding profits. There are modern CEOs that let shareholder demands drive their actions, and shareholders, or more correctly put, the economic system that allows this relationship to exist, want to see big returns on their investments.

That, however, does not excuse sIntel's past, and likely present, anti-competitive behavior. Violating laws is not, IMO, a valid way to please your shareholders. Unfortunately, the way that modern capitalism works is that even when you are at the top, there is no room for any other company at that same top.

Maybe, just maybe, your prediction will play out since CEOs are beholden to shareholders.
 

systemBuilder22

TS Rookie
I hope this leads to Intel taking a leadership position in the fight against anticompetitive behavior. After all, AMD needs a fair chance to sell a few of its new Ryzen CPUs.
Ru kidding me Fat lazy stupid Intel INVENTED the IC anti-trust law violation! Search "Intel history anti-trust" on YouTube to expand your mind!
 

ShadowDeath

TS Addict
I hope this leads to Intel taking a leadership position in the fight against anticompetitive behavior. After all, AMD needs a fair chance to sell a few of its new Ryzen CPUs.
I doubt it. Intel used to be the front runner in anti-competitive practices. They paid Dell bonuses to not use AMD CPUs. There is a long list of things like that in their history. They're just upset that it happened to themselves for once.
 
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Paulos7

TS Booster
It's not a total loss. Intel will undoubtedly claim this huge loss when they file their taxes. How convenient.
 

cuerdc

TS Booster
They were daft enough to sell it, but agree on legal aggrements/patents etc destroy innovation and equal competition only thing that should be enforced is brand name all tech advancements should be shared worldwide
 

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