In brief: Apple just closed the billion dollar deal to pick up Intel's cellular modem business. Now the company has yet one more component in its iPhone supply chain under its belt. Intel is still feeling stung at being forced out of the market by Qualcomm.
Just days after calling it a "multi-billion dollar loss," Intel has completed offloading its cellular modem division to Apple in a $1 billion deal. The acquisition, initially announced in July, was completed Monday.
Intel stated that the transaction gives Apple the “majority” of its mobile modem business, while the chipmaker retains the option to continue developing modem technology for computers, IoT devices, and autonomous vehicles.
"This transaction, valued at $1 billion, was announced on July 25, 2019. As previously disclosed, this transaction enables Intel to focus on developing technology for 5G networks while retaining the option to develop modems for non-smartphone applications, such as PCs, internet of things devices and autonomous vehicles."
Last week, Intel stated in no uncertain terms that it was being forced to sell out its mobile modem division due to Qualcomm’s anti-competitive practices in the market. The firm claims its rival chipmaker created patent licensing deals that made it impossible to compete. The Federal Trade Commission is currently conducting a probe into the allegations.
The real winner is Apple, which will now own and control the manufacturing of one of the most crucial components of its iPhone. Over the last few years, Cupertino has been ditching third-party vendors wherever possible. It stopped relying on Samsung’s CPUs in 2012 with the introduction of the A6 processor in the iPhone 5.
More recently, the tech giant has been making moves to ween itself from Intel chips in its MacBook line. Since at least early 2017, Apple has indicated several times that it intends to switch to ARM-based processors in future laptop models. So, the closure of the modem deal with Intel may not be the last time it loses a “multi-billion dollar” deal to the Cupertino powerhouse.
Image credit: James Mattil via Shutterstock