Apple is set to acquire Intel's smartphone modem division in a deal valued at around $1 billion. The announcement has arrived three months after Apple put an end to a long-running dispute with chipmaker Qualcomm.
First things first, it means Apple now has everything it needs to adopt 5G technology for future iPhones. Secondly, the settlement between Apple and Qualcomm prompted Intel to abandon its attempts to make chips for 5G modems, effectively putting that part of its business up for grabs.
Once the deal is completed later this year, Apple will be picking up about 2,200 Intel employees and 17,000 wireless technology patents. Barring any complications, the deal is expected to close sometime between October and December.
“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan. "We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.”
“We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies.
The Intel is likely to bolster Apple's attempt to build its line 5G chips and lessen its dependence on Qualcomm. Apple has hammered out a licensing agreement with Qualcomm that carries through April 2025, with an option to extend for an additional two years after that.
It could also spur speculation that Apple may be more open to making big acquisitions as it looks for new avenues for growth amid slowing demand for the iPhone, its main moneymaker for the past decade.
Intel has already so much trying to make inroads in the business of making chips for smartphone modems, with its big move coming in 2011 when it bought Infineon Technologies’ smartphone modem division for $1.4 billion.
(With inputs from AP)