Is Apple interested in Intel’s 5G modem business?
Intel (INTC) exited the 5G smartphone modem business because the business lost its potential to earn significant profits after its major modem chip customer, Apple (AAPL), settled a lawsuit with Qualcomm (QCOM).
Qualcomm is ahead of Intel in the 5G modem space, and the settlement means that Apple will use Qualcomm’s 5G modems in its future iPhones. However, Intel stated that it will fulfill its 4G commitments, hinting that some portion of the 2019 iPhone models might feature Intel’s modem chips.
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Intel’s CEO, Bob Swan, stated during the company’s first-quarter earnings release that the company was evaluating the best alternative for its 5G modem IP (intellectual property). A day after Intel’s earnings release, the Wall Street Journal, citing people familiar with the matter, stated that Apple was eyeing Intel’s 5G modem IP to accelerate its efforts to develop a 5G modem in-house.
In the past, several media reports stated that Apple had opened a facility in San Diego and had hired talent from Qualcomm and Intel’s modem business to develop its own modem. If Intel ends up selling its 5G modem business, it will be a multibillion-dollar deal and will include staff, patents, and modem designs related to multiple generations of wireless technology.
Other contenders for Intel’s 5G modem business
If Apple doesn’t buy Intel’s 5G modem business, there are other contenders, including Samsung (SSNLF) and Broadcom (AVGO). Last year, Broadcom tried to acquire Qualcomm because of its 5G advantage but failed after the deal was blocked by US President Donald Trump. Time is of the essence for Intel, as it has stalled its 5G modem development, meaning that the value of its IP will reduce with time.