Apple acquires the majority stake in Intel’s 5G smartphone modem business in a deal that is reported to be worth $1 billion. With the new scheme of things, Apple would be spearheading the 5G smartphone modem efforts so far being pursued by Intel.
The deal also includes the transfer of Intel’s physical assets as well as intellectual property rights to Apple. These apart, about 2,200 employees who have been working in Intel facilities so far will henceforth be joining Apple. The deal is expected to be completed by the end of the year itself.
Apple had already evinced interest in Intel’s smartphone modem business even though it has also been working towards developing its own modem for fitment on its devices. Now with the acquisition of Intel’s business, Apple’s own efforts is no doubt set to receive a major boost even though analysts claim the first Apple device with its own modem should take at least three more years to fructify.
Intel meanwhile has said it isn’t exiting the modem business as a whole and will continue to make chips for everything except smartphones. The company also expressed satisfaction post the deal which it said will help them focus on its core business areas. That includes making modems for fitment on autonomous vehicles, IoT and such apart from its traditional stronghold, the PCs.
Intel had earlier announced its decision to quit the 5G smartphone modem business the moment Apple announced settlement of all outstanding disputes with Qualcomm, the dominant player in the smartphone modem business. Intel’s chips have also been slower in performance compared to Qualcomm chips.
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Apple too has a lot to gain from its deal with Intel as it would help them to customize the modem exactly as per their requirement. This should help getting the maximum performance gain with the chips while also saving a lot of money that they would otherwise have to shell out to Qualcomm, a company with whom the iPhone maker has had a frosty relation often on.