The USA chip giant Intel and Apple has jointly announced that they have signed an agreement. Apple will acquire most of Intel’s smartphone modem business, including related intellectual property, equipment, and 2,200 Intel employees, that will join Apple soon. The deal is worth $1 billion and is expected to be completed in the fourth quarter of 2019.
However, Intel won’t be completely out of its business. They will keep developing modems for non-smartphone applications, such as PCs, IoT devices and self-driving cars. Needless to say, The baseband chip is responsible for the communication function of any mobile phone.
Bob Swan, CEO of Intel Corporation, said:
This agreement allows us to focus on developing 5G network technology while retaining the key intellectual property and modem technologies created by our team. We have always respected Apple, we believe them. We will provide a suitable environment for this talented team and these important assets.
We look forward to working hard at 5G to best meet the needs of our global customer base, including network operators, telecom equipment manufacturers and cloud service providers.
Johny Srouji, senior vice president of Apple hardware technologies, said:
We have been working with Intel for many years and know that this team, like Apple, is passionate about technology design and is committed to developing the best experience in the world for 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. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward.
After acquiring the Intel business, Apple’s current and future wireless technology patents, combined with its existing patent portfolio, will have more than 17,000 wireless technology patents, ranging from cellular standard protocols to modem architecture and modem operation. Moreover, the acquisition will help Apple to decrease its reliance on Qualcomm. But a big concern for Apple is that real-world performance of Intel’s modem has been not that great when it compared to Qualcomm.
Earlier, Qualcomm was the supplier of Apple’s iPhone baseband chips. Since 2017, Apple and Qualcomm have launched intellectual property litigation wars around the world. Apple had abandoned its cooperation with Qualcomm after trying hard to sort out the issue and switched to Intel chips. Apple further claimed that they have tried to use Qualcomm’s modems, but the Qualcomm refused to sell them to Apple.
According to previous media reports, the repeated negotiations between Intel and Apple have been going on for a year, starting in the summer of 2018. The last time the negotiations were suspended due to the settlement agreement between Apple and Qualcomm in April 2019. Finally, the deal is officially confirmed and Apple will be hoping to extend its modem business to fulfill its own needs.