Apple Reportedly Close to Buying Intel’s Cellular Modem Division
- Multiple sources report that Apple is close to acquiring Intel’s cellular modem unit.
- The firm is expected to pay something around 1 billion USD for the infrastructure and the patents of Intel.
- Still, the next-gen iPhone will use a Qualcomm solution, and the same will most likely apply to the 2021 model.
After Intel disappointed Apple by being unable to deliver a working 5G prototype, the latter had to find a way to get around the market risks that arose from delaying the arrival of a 5G modem in its next-gen iPhone. Thus, they reached a settlement with Qualcomm and decided to get back to doing business with them, securing their market position, and ensuring that they would stay at the forefront of internet communication developments. However, Apple is still not interested in letting much water pass under the bridge, and simply don’t feel comfortable relying on Qualcomm.
Earlier in the year, Apple published job positions for senior mobile modem chip designers but starting their own unit that would develop their very own chip would be years away. So the company thought that since Intel is so disappointed by their 5G unit, and since they need a platform to be based on and get started quickly, buying Intel’s division would make perfect sense. By doing that, Apple would gain access to Intel’s knowledge, expertise, and a respectable number of patents that are associated with cellular modem technologies. According to Bloomberg, the relevant assets are valued at approximately $1 billion, and Apple is very close to paying that price.
The negotiations first came to light following a report by the Wall Street Journal, but as they are private, none of the above has been confirmed by official lips yet. However, from a business planning perspective, it all makes sense. Of course, Qualcomm is already ahead right now, and in spite of the heat dissipation issues that their 5G chips are facing in real-life situations, Apple will have a lot of catching up to do, still. With the 2020 iPhone operating on a Qualcomm modem, the 2021 iPhone will most likely be based on a similar solution, and maybe only by 2022 and onward we may see an in-house product appearing side by side with Qualcomm chips.
If the deal goes well until the end of the line, it will be a big move by Apple, and one that will increase the company’s independence. Apple is already building most of their devices’ hardware, and this very fact is the key to its OS optimization and its market advantage over other, less highly-tailored and polished products. All that said, Apple buying Intel’s modem unit is a move to the right direction for the Cupertino giant.
Do you agree with this comment, or do you believe that Apple should better just buy their modems from Qualcomm and focus/invest on other things? Let us know in the comments below, or join the discussion on our socials, on Facebook and Twitter.