Apple in Talks to Purchase Intel's German Modem Unit

Discussion in ' News Discussion' started by MacRumors, Jun 11, 2019 at 4:05 PM.

  1. MacRumors macrumors bot


    Apr 12, 2001

    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
  2. weup togo macrumors 6502

    May 6, 2016
    There's no way Apple's acquiring anybody's fabs. Some things need to be outsourced.
  3. Sasparilla, Jun 11, 2019 at 4:17 PM
    Last edited: Jun 11, 2019 at 4:26 PM

    Sasparilla macrumors 65816

    Jul 6, 2012
    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).
  4. EvilEvil macrumors 6502a


    Jan 8, 2007
    New York City
    Wow, I thought Apple was going to drop Intel.
  5. JPack macrumors 68040


    Mar 27, 2017
    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.
  6. chucker23n1 macrumors 68020


    Dec 7, 2014
    Probably interested in the ex-Infineon (a.k.a. Siemens) staff, not so much the fabs.
  7. konqerror macrumors 6502

    Dec 31, 2013
    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.
  8. Analog Kid macrumors 601

    Analog Kid

    Mar 4, 2003
    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...
  9. developer13245 macrumors 6502


    Nov 15, 2012
    Apple will just ship the entire business to China. Everyone is dumping 5G businesses because governments will not hold China accountable for IP theft. Good move for Intel to sell it before China steals it anyway.
  10. citysnaps macrumors 601

    Oct 10, 2011
    San Francisco
    Where was it said Apple would be acquiring a fab? That would be dumb as rocks.
  11. CWallace macrumors 603


    Aug 17, 2007
    Seattle, WA
    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.
  12. RogerWilco macrumors 6502a


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


    Aug 5, 2015
    Northern Virginia
    Hopefully modem chips won’t be laid on a ground-breaking sapphire substrate
  14. konqerror macrumors 6502

    Dec 31, 2013
    You laugh but Apple has been using SOI chips since the original iPhone. Besides, white/blue LEDs are grown on sapphire.
  15. Analog Kid macrumors 601

    Analog Kid

    Mar 4, 2003
    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.
  16. DocMultimedia macrumors 6502a


    Sep 8, 2012
    Charlottesville, VA
    Maybe these will be chips for the Apple Car to talk with other cars. Hmm. :)
  17. bsimpsen macrumors member

    Sep 18, 2012
    If it makes sense for A-series chips, why wouldn't it make sense for 5G?
  18. Analog Kid macrumors 601

    Analog Kid

    Mar 4, 2003
    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?
  19. Costino1 macrumors 6502a


    Oct 1, 2012
    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?
  20. bsimpsen, Jun 11, 2019 at 8:25 PM
    Last edited: Jun 11, 2019 at 9:08 PM

    bsimpsen macrumors member

    Sep 18, 2012
    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)
  21. JetTester macrumors 6502

    Feb 12, 2014
    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!
  22. Degerz macrumors newbie

    Apr 16, 2019
    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 ...
  23. chatin macrumors 6502a


    May 27, 2005
    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.
  24. apolloa macrumors G4

    Oct 21, 2008
    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.
  25. szw-mapple fan macrumors 65816

    szw-mapple fan

    Jul 28, 2012
    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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