Apple is close to acquiring Intel's 5G modem business for $1 billion
One company's garbage is another company's treasureBy Adrian Potoroaca
The big picture: Intel's push to develop 5G modems may have come to an end, but it looks like Apple is keen on picking up where the chipmaker left off. This likely means Qualcomm only won a small battle in its legal spat with the iPhone maker, who wants to avoid such headaches in the future by acquiring as much control as it can over the components that go inside its products.
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.