Why Apple acquired Intel smartphone modem business

by July 31, 2019 0 comments

Tech giant Apple recently signed an agreement with Intel, wherein the iPhone maker has acquired the majority of Intel’s smartphone modem business. The deal valued at $1 billion will close in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions, including works council and other relevant consultations in certain jurisdictions.

Earlier this year, chipmaker Intel announced to exit the 5G mobile division after Apple surprisingly settled with Qualcomm, after legally fighting for years. Just a couple of days after the Apple, Qualcomm settlement, Intel CEO Bob Swan announced that Intel is exiting the modem business and the company is not a pathway forward.

Apple had planned to use Intel’s 5G chips for its upcoming generation of iPhones, but the chipmaker missed deadlines and was not able to manufacture modem chips in the timeframe given by Apple. According to the media reports, Intel’s inability to develop chips in the expected time frame, kind of forced Apple to legally end the dispute with Qualcomm. Before the settlement, Intel supplied modems for 2018 iPhone models.

According to the Apple, Intel agreement, approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment, and leases.

Apple’s senior vice president of Hardware Technologies Johny Srouji said that Apple and Intel have worked for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users. Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment.

After the acquisition, Apple will have over 17,000 wireless technology patents (including Apple’s current portfolio), ranging from protocols for cellular standards to modem architecture and modem operation. As part of the agreement, Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles.

‘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,’ added Intel CEO, Bob Swan.

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