As rumored, Apple today announced that it has signed an agreement with Intel that will see Apple purchasing the majority of Intel's smartphone modem business.
Approximately 2,200 Intel employees will be joining Apple, and Apple will also take over Intel's related intellectual property, equipment, and leases, in a transaction that's valued at $1 billion. At $1 billion, this is Apple's second largest known acquisition after Beats.
Combined with Apple's existing wireless technology patents, the Intel acquisition will give Apple more than 17,000 wireless technology patents in total, ranging from "protocols for cellular standards to modem architecture and operation." Apple says that Intel will continue to develop modems for non-smartphone applications, such as PCs, internet-of-things devices, and autonomous vehicles.
Apple's VP of Hardware Technologies Johny Srouji said that Apple is excited to gain new engineers with expertise in modem development, with the Intel team set to join Apple's cellular technologies group.
The acquisition, says Srouji, will allow Apple to expedite its development on future products, which likely includes the Apple-designed modem chip that's in the works. To reduce its reliance on Qualcomm and other modem chip suppliers, Apple has been working on developing its own modem chip. That technology won't be ready for another few years, but the acquisition of Intel's modem chip business could allow Apple to significantly speed up its modem chip development.
Intel CEO Bob Swan said that selling Intel's smartphone modem chip business to Apple will allow Intel to putting its 5G efforts into other areas.
Rumors earlier this week suggested Apple was in advanced talks with Intel and that a deal could be announced in the near future. Apple and Intel have been having discussions about an Apple acquisition of its smartphone modem business since last year.
The talks paused temporarily when Qualcomm and Apple settled their legal differences and reached a new supply agreement, but resumed not too long afterwards. Intel announced back in April that it was planning to exit the 5G smartphone business, sharing the new shortly after the new Qualcomm/Apple deal was announced.
Apple was planning to use Intel's 5G chips in its 2020 iPhones because of its legal battle with Qualcomm, but rumors suggested Intel wasn't able to meet design deadlines, souring the relationship between the two companies. Apple mended ties with Qualcomm and will now use Qualcomm's 5G chips in its 2020 iPhones.
Apple has established a deal with Qualcomm for chips for future devices as well, and will likely rely on Qualcomm until its own modem chips are ready to be deployed.
Apple says that it expects the purchase of Intel's smartphone modem chip business to be completed in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions.
Article Link: Apple Acquiring the Majority of Intel's Smartphone Modem Business
