Following Apple and Qualcomm ending litigation, Intel exited 5G modem business
As first reported by the Wall Street Journal yesterday, Apple is in “advanced talks” to buy Intel’s cellular modem business, including patents and personnel. Citing “people familiar with the matter,” the Wall Street Journal reported the value of the potential deal at approximately $1 billion.
“I predicted this,” Avi Greengart of Techsponential, previously of GlobalData and Current Analysis, mused on Twitter. “Then again, so did a lot of people…”
Back in April, Qualcomm and Apple ended all ongoing litigation related to allegations from Apple that Qualcomm took a monopolistic stance with a “no license, no chips” policy related to Qualcomm’s extensive standard essential patent portfolio and pole position in the cellular modem market.
Qualcomm previously provided modems for Apple’s iPhones but the Cupertino firm and its contract manufacturers cut off royalty payments. Apple then switched over to Intel modems. As it relates to 5G, Qualcomm has modems, RF front end components and other key technologies in-market today, while Intel never shipped a 5G modem. Following the end of the litigation, Intel announced it was exiting the 5G modem business with CEO Bob Swan saying, “It has become apparent there is no clear path to profitability and positive returns.”
Instead, he said, Intel is focusing its 5G-related efforts on cloud computing infrastructure. At the time, Swan said, “Our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”
Just like how it has internally developed CPUs for its devices, Apple apparently has ambitions to eventually build its own modems. In fact, as the court battle was still playing out, Apple was recruiting modem specialists in Qualcomm’s hometown of San Diego.
“Apple believes it can lower costs and have more control by creating its own modem,” Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told Silicon Angle News. “What Apple also needs to consider is that it only gets that control if it also has radio frequency intellectual property. If Apple does buy these assets, it could shave off a few years, but I still think it takes best case five years to get competitive.”
According to The Information, Apple is specifically focused on Intel’s modem operations in Germany. Intel bought Germany chip maker Infineon in 2011; The Information’s Aaron Tilley wrote, “While Intel’s modem group is spread across the world, its foundation is in Germany.”
