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Apple has signed an agreement to buy Intel’s smartphone modem business for $1 billion. The transaction is expected to close in the fourth quarter of 2019 and will see 2,200 Intel employees join Apple, along with intellectual property, equipment, and leases.
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Over 17,000 wireless technology patents
The end result will be that Apple will hold over 17,000 wireless technology patents. In the meantime, Intel will still be able to develop modems for non-smartphone applications.
“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan in a press release.
“We have long respected Apple, and we’re confident they provide the right environment for this talented team and these important assets moving forward. We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers, and cloud service providers.”
The move is likely a step towards Apple lessening its dependence on Qualcomm for smartphone modems. Apple has accused Qualcomm of charging “disproportionately high” fees in patent royalties.
For several years, the phone maker used Intel parts in its handsets alongside Qualcomm's. However, reports claimed that Qualcomm’s hardware offered higher speeds.
After Apple was left with no choice but to settle its legal dispute with Qualcomm, Intel was left with no customers and essentially forced out of the 5G modem business.
“We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies.
“Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward.”