Intel Cites Apple-Qualcomm Settlement as Reason Behind Exiting 5G Smartphone Modem Business

[Applebot1]

Seems to me that the Intel chips were going to be a setback for Apple. Though I am sure they would have denied the issue had a phone with the intel chips been released. Apple realized this and moved to settle

My thoughts too. If they had a superior product or even equal then Apple would have chosen Intel imo.

 

[rp2011]

I think Intel is putting themselves in smaller and corners. It was myopic and relied way too long on a bread and butter product while companies like Microsoft have diversified and are thriving on other avenues of income and services not related to Windows PC’s themselves. Hard to see a future for Intel.

 

[Massimo1926]

Last week's surprise Apple and Qualcomm settlement and multiyear chipset supply agreement was the driving force behind Intel exiting the 5G smartphone modem business, according to Intel CEO Bob Swan.

"In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn't see a path," Swan said in an interview with The Wall Street Journal, as noted by The Verge.

Swan's comment suggests that Intel was surprised by the Apple-Qualcomm settlement and acted reactively when it announced its exit from the 5G smartphone modem business just hours later, but multiple reports indicate that Intel was unable to meet Apple's demands for 5G modems in 2020 iPhones.

It's hard to imagine that Apple and Qualcomm would have suddenly settled their bitter legal battle if Intel was able to supply 5G modems for 2020 iPhones, but Intel was reportedly struggling with its 5G modem development, possibly leaving Apple with little to no choice but to settle with Qualcomm.

iPhones have a long development cycle, so it was likely crunch time for Apple to choose a 5G modem supplier for its 2020 iPhones. Given this long lead time, Intel is still expected to supply LTE modems for 2019 iPhones.

Article Link: Intel Cites Apple-Qualcomm Settlement as Reason Behind Exiting 5G Smartphone Modem Business

Ahahahhaha what a joke Intel these days

 

[ksec]

The way this has been playing out is very interesting. Sounds like there was some sort of back room cartel like deal that Intel and Apple were working out in order to prop up Intel's modem business and technology. Without Apple, Intel either has no actual business with their 5g modems, and can't technologically keep up.

based on everything so far, this is how I feel like it was being played.


Apple goes after Qualcomm in hope to publicly diminish Qualcomm's value and market cap.

Crippling Qualcomm's public image and driving down the market cap makes Qualcomm ripe for hostile take-over. It was believed that Broadcom was a top candidate to purchase Qualcomm at that time. Broadcom seems historically far more likely to make Apple favoured deals.

Something changed, and the valuation didn't continue to drop like Apple wanted. Instead, Qualcomm was poised to win a large portion of the lawsuits, to the point where Apple themselves were threatened to losing ability to sell their iphone 6 through X in major markets. qualcomm's stock rebounds and no outside takeover possible.

Qualcom Wins the major sticking point between the two. Apple realized that they are now in a losing position, and settle with Qualcomm out of court. Judging from the rumours and information in the settlement, Apple got a worse deal than they originally even had.

During all this, there were rumours, and Qualcomm complained that Apple was demanding source code. Qualcomm believed that providing it to Apple, Apple was feeding details and technology from that code to Intel. This sounds like Apple was setting up a fall back plan should the original plan to drive Qualcomm value down. The backup plan being, Get Intel technology so that their modems could compete. Thus, if qualcomm deal falls through, They could rely on Intel's favourable pricing. Intel likely didn't have much other business in 5g modems, and relied on Apple feeding them tech from Qualcomm to continue their development work, in addition, without any other major purchasers, there was just no business sense to keep making Intel modems.


it's a really interesting story, and I honestly didn't expect the outcome we had.

Agree and few more prospective to add.

1. It wasn't until now some media painted, or even Qualcomm suggested Broadcom's take over money were backed by Apple. I wouldn't be surprise. I had suggested as a conspiracy theory then in SemiWiki, turns out Qualcomm believe the same.

2. The valuation did drop, and for closing to $60B, I am not sure how anyone expects it go even lower. The takeover didn't pass due to AntiTrust and Trump as well as the Broad and Shareholder voted against it. Many major Shareholders believe Qualcomm has a case ( and of course they do ), but don't think Qualcomm should play hardball with its biggest customer. And turns out Steve Mollenkopf was right all along. I admire him quite a bit more now.

3 Both the settlement and Intel CEO changes happened at possibly the worst scenario for Apple. ( I wish I could find back my old post ) I once suggested if Bob Swan were ever to take the CEO job, Apple's Modem will be in jeopardy. It was a Fab Capacity wasting low margin business that most financial guys don't like. And it was obvious ever since BK lose the job the Intel 5G modem wasn't getting what ever resources to chase Qualcomm. Had Intel not had 10nm delayed, they would have 10nm 5G Modem ready for iPhone in 2020, and Apple will continue to fight Qualcomm in court for as long as they need to be.

But Intel couldn't kept up with Qualcom Modem, or at least it didn't had a chance to fully prove themselves, and their new CEO wouldn't want to commit losing money for Apple Modem business. Intel will just ship 5G Modem when they felt they are ready ( or when they had spare 10nm capacity, which according yesterday announcement seems fully occupied even in 2020 ) Apple doesn't want to wait. And it is clear they wont get along with Intel new CEO, at least not at the price Apple are willing to paid. Apple likely want to Settle with Qualcomm just in case, and dual source Modem from Qualcomm and Intel. So they could get better pricing. Intel, doesn't want to play with Apple's cheap pricing and low quantity anymore decided it wasn't worth doing if Apple is going to dual sources and pulled out. I believe that was one of the reason why they had an agreement in 1st of April but delayed the announcement as Apple was asking Intel for dual sourcing. If Intel refused Apple will need to make better terms with Qualcomm ( or long term commitment ) .

It is also clear Apple now fully intend to make its own Modem. Where previous the job post count were small in numbers, it is now in full force. But I still think it will be at least 2023+ before we see iPhone with Apple Modem.

The pricing is also likely higher than what Apple were previously paying, but keeping in mind this is for 4G and 5G. 5G patents are going to be more expensive anyway.

I think Tim Cook pick the wrong battle, and Steve Jobs were much better at doing this. He knew Qualcomm has some valuable patents and offered a very good pricing. Instead Tim Cook wasted time and energy for the past 5 years and got literally nothing out of it.

 

[magicschoolbus]

I wouldn’t count them out that fast... if intel can figure out how to put an i9 into an iPhone without impacting battery life... guess what’s everyone’s smartphone and tablets Gonna be rocking intel processors

ARM is crushing it in processor speeds though. The iPad chip is just insane and they keep getting better. Intels future seems.. rocky.

 

[NickName99]

This is funny, it throws a wrench into the narrative that Intel had already decided to pull out of the modem business, causing Apple to quickly cave to all of Qualcomm’s demands.

 

[mithion]

The only thing I'm a bit disappointed with is that I will be in the market for new iPhone in the fall and by the sounds of it, the qualcom chips won't make back into iPhones until 2020. BTW, does anybody know if intel improved the performance of their 4G chip in the last two iPhones? I have an iPhone 7+ and there was a bit of a fiasco with the intel chips in those phones performing significantly worse compared to qualcom chips in mid-low signal areas.

 

[Applebot1]

Agree and few more prospective to add.

1. It wasn't until now some media painted, or even Qualcomm suggested Broadcom's take over money were backed by Apple. I wouldn't be surprise. I had suggested as a conspiracy theory then in SemiWiki, turns out Qualcomm believe the same.

2. The valuation did drop, and for closing to $60B, I am not sure how anyone expects it go even lower. The takeover didn't pass due to AntiTrust and Trump as well as the Broad and Shareholder voted against it. Many major Shareholders believe Qualcomm has a case ( and of course they do ), but don't think Qualcomm should play hardball with its biggest customer. And turns out Steve Mollenkopf was right all along. I admire him quite a bit more now.

3 Both the settlement and Intel CEO changes happened at possibly the worst scenario for Apple. ( I wish I could find back my old post ) I once suggested if Bob Swan were ever to take the CEO job, Apple's Modem will be in jeopardy. It was a Fab Capacity wasting low margin business that most financial guys don't like. And it was obvious ever since BK lose the job the Intel 5G modem wasn't getting what ever resources to chase Qualcomm. Had Intel not had 10nm delayed, they would have 10nm 5G Modem ready for iPhone in 2020, and Apple will continue to fight Qualcomm in court for as long as they need to be.

But Intel couldn't kept up with Qualcom Modem, or at least it didn't had a chance to fully prove themselves, and their new CEO wouldn't want to commit losing money for Apple Modem business. Intel will just ship 5G Modem when they felt they are ready ( or when they had spare 10nm capacity, which according yesterday announcement seems fully occupied even in 2020 ) Apple doesn't want to wait. And it is clear they wont get along with Intel new CEO, at least not at the price Apple are willing to paid. Apple likely want to Settle with Qualcomm just in case, and dual source Modem from Qualcomm and Intel. So they could get better pricing. Intel, doesn't want to play with Apple's cheap pricing and low quantity anymore decided it wasn't worth doing if Apple is going to dual sources and pulled out. I believe that was one of the reason why they had an agreement in 1st of April but delayed the announcement as Apple was asking Intel for dual sourcing. If Intel refused Apple will need to make better terms with Qualcomm ( or long term commitment ) .

It is also clear Apple now fully intend to make its own Modem. Where previous the job post count were small in numbers, it is now in full force. But I still think it will be at least 2023+ before we see iPhone with Apple Modem.

The pricing is also likely higher than what Apple were previously paying, but keeping in mind this is for 4G and 5G. 5G patents are going to be more expensive anyway.

I think Tim Cook pick the wrong battle, and Steve Jobs were much better at doing this. He knew Qualcomm has some valuable patents and offered a very good pricing. Instead Tim Cook wasted time and energy for the past 5 years and got literally nothing out of it.

Very interesting view point. It’s also obvious that Intel cannot bring to market a superior or even on par mobile modem chip.
Qualcomm appear to have this market cornerd.

 

[ToneWilliamsUSA]

Intel suffers from a host of problems these days, notably with execution of anything it seems. That's what market dominance does to a company; it becomes fat and lazy, less competitive. How this will play out in the long term is hard to say, but history says this does not bode well for Intel.

 

[farkingdom]

The only thing I'm a bit disappointed with is that I will be in the market for new iPhone in the fall and by the sounds of it, the qualcom chips won't make back into iPhones until 2020. BTW, does anybody know if intel improved the performance of their 4G chip in the last two iPhones? I have an iPhone 7+ and there was a bit of a fiasco with the intel chips in those phones performing significantly worse compared to qualcom chips in mid-low signal areas.

I’m using an iPhone XR and this is significantly better than my 7+ in terms of coverage and latency. I don’t understand the whole Intel vs Qualcomm modem fiasco, it works fine for me and probably for many others.

 

[realtuner]

There's several articles out there that say exactly what you think, I've actually been waiting about a week for MacRumors to report this but they didn't. Here's a couple for you.

https://www.cnet.com/news/apple-plotted-to-hurt-qualcomm-years-before-it-sued-the-company/

https://forums.appleinsider.com/dis...ly-illustrated-by-qualcomms-opening-statement

There are two problems with these articles:

• The first, and most obvious one, is why are we seeing "leaks" about things presented at trial (up until they settled) only from Qualcomm's POV and not from Apple's?
• Second, opening statements in a trial are not considered evidence. They tell a story that your side is trying to promote, but nothing said is entered as evidence. Therefore there's no way to confirm if anything Qualcomm said was actually true or if the quotes they used from Apple were carefully chosen "snippets" that lack the context that you would get from reading, say, an entire document on an issue.

 

[needfx]

For the record, I'd just like to cite rain as a possible reason behind the ground sometimes being wet, but I'm very eager to hear more from Intel on this Apple-Qualcomm matter.

View attachment 833936

OMT!

 

[realtuner]

ARM is crushing it in processor speeds though. The iPad chip is just insane and they keep getting better. Intels future seems.. rocky.

You mean Apple is crushing it in processor speed. ARM processors (the cores they license out) are nowhere near the level of Apple's A-Series processors.

 

[Glideslope]

So do the other press releases get sent to poor children in Africa?

Why not include impoverished children in Appalachia, Gulf of Mexico, West Coast, or Upper Midwest?

 

[PickUrPoison]

I’m using an iPhone XR and this is significantly better than my 7+ in terms of coverage and latency. I don’t understand the whole Intel vs Qualcomm modem fiasco, it works fine for me and probably for many others.

You and upwards of 100+ million others at this point. This issue was always overblown by the Apple-hate crowd.

 

[joueboy]

Another perspective that Apple rushed this decision and pretend that Intel got them covered, is that Apple already know their situation. Intel is not on top on this and they both know it's not gonna end well, otherwise Apple did made the best decision here. Everybody wins and we're still on track for 5G iPhones the only thing left to worry about are the carriers starts charging for having the chip in the phone, like they did on 3G.

 

[PickUrPoison]

Everyone saw it coming, except Intel.

I think Intel saw it coming. They knew Apple wasn’t happy with them, and they knew Apple was in the process of phasing out their Intel business by using their own chips—5G modems for iOS devices and ARM CPUs for Macs. Intel would probably have exited the 5G smartphone baseband chip market even if they’d only lost half the Apple business to Samsung. In any case, the writing’s been on the wall for months.

 

[FFR]

Talk about circular logic - the only reason Apple settled with Qualcomm was because Intel couldn't deliver a working 5G chipset within a reasonable amount of time.

Nothing circular about it.

As soon as intel found out about the settlement they ended their 5g development for the iPhone, not the other way round.

 

[techwhiz]

The way this has been playing out is very interesting. Sounds like there was some sort of back room cartel like deal that Intel and Apple were working out in order to prop up Intel's modem business and technology. Without Apple, Intel either has no actual business with their 5g modems, and can't technologically keep up.

based on everything so far, this is how I feel like it was being played.


Apple goes after Qualcomm in hope to publicly diminish Qualcomm's value and market cap.

Crippling Qualcomm's public image and driving down the market cap makes Qualcomm ripe for hostile take-over. It was believed that Broadcom was a top candidate to purchase Qualcomm at that time. Broadcom seems historically far more likely to make Apple favoured deals.

Something changed, and the valuation didn't continue to drop like Apple wanted. Instead, Qualcomm was poised to win a large portion of the lawsuits, to the point where Apple themselves were threatened to losing ability to sell their iphone 6 through X in major markets. qualcomm's stock rebounds and no outside takeover possible.

Qualcom Wins the major sticking point between the two. Apple realized that they are now in a losing position, and settle with Qualcomm out of court. Judging from the rumours and information in the settlement, Apple got a worse deal than they originally even had.

During all this, there were rumours, and Qualcomm complained that Apple was demanding source code. Qualcomm believed that providing it to Apple, Apple was feeding details and technology from that code to Intel. This sounds like Apple was setting up a fall back plan should the original plan to drive Qualcomm value down. The backup plan being, Get Intel technology so that their modems could compete. Thus, if qualcomm deal falls through, They could rely on Intel's favourable pricing. Intel likely didn't have much other business in 5g modems, and relied on Apple feeding them tech from Qualcomm to continue their development work, in addition, without any other major purchasers, there was just no business sense to keep making Intel modems.


it's a really interesting story, and I honestly didn't expect the outcome we had.

Apple went on a multi-year smear campaign against Qualcomm and Qualcomm had the internal memos/emal through discovery. They used that as part of the opening statements last week. IMHO

The settlement came not because Qualcomm caved as people surmised but because Apple got caught flapping in the wind. IMHO
They had no choice but settle or have really dirty laundry aired. IMHO

 

[BootsWalking]

Nothing circular about it.

As soon as intel found out about the settlement they ended their 5g development for the iPhone, not the other way round.

The settlement wouldn't have occurred if Intel was able to design a 5G chipset, ergo the real reason Intel dropped its 5G chip development is because they couldn't successfully develop a 5G chipset, not because Apple settled with Qualcomm.

 

[realtuner]

Talk about circular logic - the only reason Apple settled with Qualcomm was because Intel couldn't deliver a working 5G chipset within a reasonable amount of time.

Bull.

Apple would have used Qualcomm modems whether they won, lost or settled their case. The only thing the case would have decided is what licensing fees are to be paid.

I don’t know why people think the case is about Intel vs Qualcomm modems. It was literally ONLY about licensing fees.

 

[FFR]

The settlement wouldn't have occurred if Intel was able to design a 5G chipset, ergo the real reason Intel dropped its 5G chip development is because they couldn't successfully develop a 5G chipset, not because Apple settled with Qualcomm.

Yeah none of that is true.

Intel dropped their smartphone 5g plans, because apple were there only customer.

They are still developing 5g as the article clearly states, just not for smartphones. Most other oems either use the modem included the soc (Qualcomm snapdragon) or a cheaper modem.

Don’t make things up, no need to.

 

[BootsWalking]

Bull.

Apple would have used Qualcomm modems whether they won, lost or settled their case. The only thing the case would have decided is what licensing fees are to be paid.

I don’t know why people think the case is about Intel vs Qualcomm modems. It was literally ONLY about licensing fees.

Reality says otherwise, as Apple was already using Intel chips in place of Qualcomm's for designs Intel was able to successfully deliver, meaning Apple would've happily used a 5G chip from Intel as well. And Apple wound up paying Qualcomm's high license fees anyway as part of their settlement, so why did Apple settle and accept those fees if not because Intel couldn't deliver on a 5G chipset, if it was only about licensing fees as you say?

 

[FFR]

Bull.

Apple would have used Qualcomm modems whether they won, lost or settled their case. The only thing the case would have decided is what licensing fees are to be paid.

I don’t know why people think the case is about Intel vs Qualcomm modems. It was literally ONLY about licensing fees.

Your right the out come of this trial was about patent fees and double dipping, It was going to last only 6 more DAYS.

 

[BootsWalking]

Yeah none of that is true.

Intel dropped their smartphone 5g plans, because apple were there only customer.

They are still developing 5g as the article clearly states, just not for smartphones. Most other oems either use the modem included the soc (Qualcomm snapdragon) or a cheaper modem.

Don’t make things up, no need to.

Turn your logic around - why would Intel start development of a 5G chip if they knew Apple would likely be their only initial launch customer? There is no market for 5G chips with anywhere near the volume of smartphones, and as a chip fabricator Intel needs volume to amortize the cost of their chip R&D and production. There is no other 5G market that makes financial sense to Intel outside of smartphones.