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Intel and Apple Working Out a Deal

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Apple wants Intel’s German modem business

Apple is in talks with Intel (INTC) about purchasing the chip company’s smartphone modem business, according to a report from The Information citing people familiar with the matter. Intel said in April that it would exit the smartphone modem business, and it later announced its intention to sell the business. Apple is reportedly interested in purchasing Intel’s smartphone modem operation in Germany.

Without disclosing the discussions with Apple, Intel told CNET that its smartphone modem business has attracted significant buyout interest and that it is working with advisors to assess strategic options for the business.

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What Intel would charge Apple for its German smartphone modem business is currently unknown. But Apple has a fat bank account. The company finished the March quarter with $225 billion in cash reserves, a far larger war chest than Microsoft’s (MSFT) $131.6 billion and Alphabet’s (GOOGL) $113.5 billion.

Samsung viewed as another potential buyer

The decision by Intel to exit the smartphone modem business came shortly after Apple and Qualcomm (QCOM) settled their differences and went on to sign multiyear chip supply and technology license agreements. As the dispute with Qualcomm escalated, Apple dropped Qualcomm as its supplier of iPhone modem chips and instead turned to using modem chips from Intel.

Since Intel is selling its smartphone modem business in pieces, it may end up transacting with multiple buyers. Samsung (SSNLF), which plans to invest $116 billion over the next decade to expand and diversify its chip business, is also viewed as a potential buyer of the modem business that Intel has put up for sale.

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