Apple in Talks to Purchase Intel's German Modem Unit

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Apple is in talks to buy Intel's German modem unit, which could help Apple develop its own modem chips more quickly, reports The Information.

Intel is considering selling its modem business in pieces, and this is not the first time we've heard word that Apple's interested in a purchase. Back in April, The Wall Street Journal said that Apple had held discussions with Intel about acquiring parts of the Intel modem chip business, and apparently, those talks are ongoing.

Any deal between Apple and Intel would likely include Intel patents and products, said one person briefed on the discussions. Such an arrangement would resemble the deal Apple reached with Dialog Semiconductor, a U.K.-based company that designs chips that handle power management chores in devices. Last year, Apple and Dialog struck a $600 million deal that brought 300 Dialog employees to Apple, along with some patents.
The two companies have been in discussions since last year, but The Information warns that the talks could still fall through without a deal.

The Information estimates that a deal for Intel's German modem business could bring "hundreds" of modem engineers to Apple. Intel's chip production facilities are headquartered in Germany after a 2011 purchase of chip maker Infineon.

Intel announced in April that it was exiting the 5G smartphone modem business, sharing the news just hours after Apple and Qualcomm announced a resolution to their ongoing legal battle and established a new supply deal.

Apple had been planning to use Intel's 5G chips for its 2020 iPhones, but rumors indicated Intel wasn't able to meet design deadlines, causing the relationship between the two companies to sour. Apple is now planning to use Qualcomm's 5G modem chips in its 2020 5G iPhones, and is also working on its own modem chip development for later devices.

In the future, Apple is aiming to reduce its dependence on suppliers like Qualcomm by creating its own modem chips, but the company still has a few years to go before the technology is ready. According to The Information, Apple has been telling new modem chip hires in San Diego that it doesn't expect to release devices with its own modem chips until 2025.

Article Link: Apple in Talks to Purchase Intel's German Modem Unit
 
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Sasparilla

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Jul 6, 2012
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I believe this was speculated by some far sighted individual on these forums previously (most definitely not me).

Makes total sense, now they can take their time to get 5G nailed and kick Qualcomm to the curb when they want to (or at least keep the price down). Long term with Qualcomm getting pulled back on the monopoly legal angle - you would have thought it would make sense for Intel to hang in there and get 5G done and selling (for the long term).

I noticed that Samsung recently decided to bring the A50 mid range phones to the U.S. (wasn't doing it before). It's going to have a Samsung CPU (not the Qualcomm Sammy normally always has to put in their U.S. phones to prevent black mail by Qualcomm), perhaps because they won't have to engineer a new variant for a Qualcomm CPU? It'll be interesting if this is the start of Sammy dropping Qualcomm for CPU's (guessing the Note will still have one, but the s11 will be a good test case to wait and see on).
 
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JPack

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Makes total sense, now they can take their time to get 5G nailed and kick Qualcomm to the curb when they want to (or at least keep the price down). Long term with Qualcomm getting pulled back on the monopoly legal angle - you would have thought it would make sense for Intel to hang in there and get 5G done and selling (for the long term).
Apple expects their modem to be available in 2025, so this is more likely about staying competitive before 6G comes out.

In all likelihood, the Qualcomm decision will be reversed. Koh's decision wasn't a surprise given her background and many antitrust lawyers feel it won't stand up on appeal.
 

konqerror

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Dec 31, 2013
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There's no way Apple's acquiring anybody's fabs. Some things need to be outsourced.
The modems were manufactured by TSMC even after Intel bought the division from Infineon in 2011. It was only last year when they brought it in house.
 

Analog Kid

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Mar 4, 2003
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Man, if this happens I hope they pull it off. Their success with the A-series chips suggests they can, but it also sounds like Intel was struggling to pull it together. Does it make sense to go through the effort if the end game is a standards compliant chip with only yourself as a customer?

Not much room for differentiation or deeper integration into the software stack as far as I can tell, or am I missing something? Seems foolish if the only points of differentiation are power consumption and reception quality-- Qualcomm the existing players have a huge lead on experience in those areas. And unlike Samsung, Intel and Qualcomm, if Apple doesn't source the parts to 3rd parties they can't amortize the R&D expense across as many parts...
 
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CWallace

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Not much room for differentiation or deeper integration into the software stack as far as I can tell, or am I missing something? Seems foolish if the only points of differentiation are power consumption and reception quality-- Qualcomm the existing players have a huge lead on experience in those areas.
Even if Apple only reaches parity with Qualcomm, they still control the silicon which insulates them from being dependent on third-party suppliers for a critical piece of technology.


And unlike Samsung, Intel and Qualcomm, if Apple doesn't source the parts to 3rd parties they can't amortize the R&D expense across as many parts...
Apple can earn it back via the margins they make on their iOS devices. Same as they do with their CPUs, GPUs and other silicon that is unique to the iOS family.
 

RogerWilco

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Jul 29, 2011
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5G — the newest bag of hurt. Other than FOMO, is there any rational business case for this technology?
 
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DailySlow

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Aug 5, 2015
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Apple is in talks to buy Intel's German modem unit, which could help Apple develop its own modem chips more quickly, reports The Information.

Intel is considering selling its modem business in pieces, and this is not the first time we've heard word that Apple's interested in a purchase. Back in April, The Wall Street Journal said that Apple had held discussions with Intel about acquiring parts of the Intel modem chip business, and apparently, those talks are ongoing.

The two companies have been in discussions since last year, but The Information warns that the talks could still fall through without a deal.

The Information estimates that a deal for Intel's German modem business could bring "hundreds" of modem engineers to Apple. Intel's chip production facilities are headquartered in Germany after a 2011 purchase of chip maker Infineon.

Intel announced in April that it was exiting the 5G smartphone modem business, sharing the news just hours after Apple and Qualcomm announced a resolution to their ongoing legal battle and established a new supply deal.

Apple had been planning to use Intel's 5G chips for its 2020 iPhones, but rumors indicated Intel wasn't able to meet design deadlines, causing the relationship between the two companies to sour. Apple is now planning to use Qualcomm's 5G modem chips in its 2020 5G iPhones, and is also working on its own modem chip development for later devices.

In the future, Apple is aiming to reduce its dependence on suppliers like Qualcomm by creating its own modem chips, but the company still has a few years to go before the technology is ready. According to The Information, Apple has been telling new modem chip hires in San Diego that it doesn't expect to release devices with its own modem chips until 2025.

Article Link: Apple in Talks to Purchase Intel's German Modem Unit
Hopefully modem chips won’t be laid on a ground-breaking sapphire substrate
 
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Analog Kid

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Even if Apple only reaches parity with Qualcomm, they still control the silicon which insulates them from being dependent on third-party suppliers for a critical piece of technology.

Apple can earn it back via the margins they make on their iOS devices. Same as they do with their CPUs, GPUs and other silicon that is unique to the iOS family.
I get both of these points, but why stop here? Why not make their own memory? Roll their own steel? Is the plan, in effect, to pull a reverse-Samsung?

Samsung makes commodity parts, and uses their smartphones to showcase them. Is Apple planning to showcase smartphones and simply produce the parts to build them?

And I'm not sure I'd assume they can even reach parity with Qualcomm. At some point, I'd imagine that monopoly power will degrade Qualcomm's technical dominance, but I see no sign of it yet.

The usual logic is to specialize and focus on your core competence and places where you can differentiate. If it's something that someone else can do as well or better than you, let them. Apple has been pretty disciplined in following that approach, at least in hardware. Software could be debated, I suppose.

It may be because there are too few players in the modem space for this to be a truly commodity part but, if so, someone out there missed an opportunity and Apple is taking a huge risk. You're saying they'll make it up on product margin, but they'll be paying multiples of the R&D cost per unit that the commodity players do-- it seems a strange place to spend it. It seems like it would make more sense for Apple, Samsung, and a few others to go in on a joint venture.

Who else out there is capable of making 5G chips? Qualcomm, Huawei, Samsung? Intel dropped out, obviously. Anyone else in the game?

Cook is an operations guy, I'm sure he's thought this through, but it still seems an odd move.
 

bsimpsen

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Sep 18, 2012
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Man, if this happens I hope they pull it off. Their success with the A-series chips suggests they can, but it also sounds like Intel was struggling to pull it together. Does it make sense to go through the effort if the end game is a standards compliant chip with only yourself as a customer?
If it makes sense for A-series chips, why wouldn't it make sense for 5G?
 
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Analog Kid

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If it makes sense for A-series chips, why wouldn't it make sense for 5G?
Because you can differentiate your products with the processor design. I'm not sure how you do that with the modem-- it has to talk to the tower, so it has to be standards compliant. If it's standards compliant, then it's not functionally different from any other standards compliant modem.

Maybe I'm thinking about the wrong device. Maybe I shouldn't be thinking about the phone, but the watch. There might be more room to innovate there?
 

Costino1

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Oct 1, 2012
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If it makes sense for A-series chips, why wouldn't it make sense for 5G?
I guess the point some people, including myself, is trying to make is where does it end? It was nice they made the A series chips and they were a success, but what is next? Where does it end with doing production in house?
 

bsimpsen

macrumors member
Sep 18, 2012
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I guess the point some people, including myself, is trying to make is where does it end? It was nice they made the A series chips and they were a success, but what is next? Where does it end with doing production in house?
They don't do production of A-series chips in-house. Those are fabricated by TSMC, just as the cellular chip would be. Do you think it preferable for Apple to rely on the design work of other companies, and pay them margin dollars they could keep themselves? I don't.

Apple owns the designs for the Touch ID hardware, the A-series GPUs, the NAND flash controllers, Secure Enclave, significant enhancements to the ARM CPU and much of their power management circuitry. They are a first class chip design house and that's going to be a long term differentiator for them.

Add: "People who are really serious about software should make their own hardware." - Alan Kay (Apple Fellow)
 
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JetTester

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Feb 12, 2014
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I think it is a great move, giving them the ability to design the chips in-house and produce them under contract, probably to TSMC. Once they are on par with Qualcomm, they will then control their own destiny for the technology. Strong move!
 

Degerz

macrumors newbie
Apr 16, 2019
23
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Let me get this straight. Apple are trying to acquire the same baseband processor design team that failed to meet their own originally specified deadline ?

On the bright side, if Apple are ever finished with their modem design they won't need to implement CDMA technology since most CDMA networks currently operating would've shut down by then ...
 

chatin

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May 27, 2005
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Let me get this straight. Apple are trying to acquire the same baseband processor design team that failed to meet their own originally specified deadline ?
The purchase makes no sense and is a waste. Cook would have to convince the Germans to work for him and do something they have been weak at. Designing chips.
 
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apolloa

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Oct 21, 2008
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Time, because it rules EVERYTHING!
Hmm not sure this would be good, Qualcomm make the best modems out of anyone, so Apple will ditch them for profit.. seems a sad capitalist decision to me, great if Apple pulls it off but so far in the evidence seen of Intels designs its profit first, customer a far back lonely second.
They would have to at least match Qualcomm’s performance and I just can’t see them doing that if they go down this route.

Plus we ha e Qualcomm who proved that I tel stole some of its designs.. who’s to say they won’t continue to do so and it goes round the courts again, only with Apple again being forced to change things so we the customer suffer with poor performance again...

Yeah if it was me I’d leave it to the Qualcomm experts.
 

szw-mapple fan

macrumors 68000
Jul 28, 2012
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Man, if this happens I hope they pull it off. Their success with the A-series chips suggests they can, but it also sounds like Intel was struggling to pull it together. Does it make sense to go through the effort if the end game is a standards compliant chip with only yourself as a customer?

Not much room for differentiation or deeper integration into the software stack as far as I can tell, or am I missing something? Seems foolish if the only points of differentiation are power consumption and reception quality-- Qualcomm the existing players have a huge lead on experience in those areas. And unlike Samsung, Intel and Qualcomm, if Apple doesn't source the parts to 3rd parties they can't amortize the R&D expense across as many parts...
I would imagine the money saved from not paying Qualcomm's profit margins alone would make it worth it for Apple. If they can make a chip that is on par or better, it makes absolute sense for Apple.
 
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