Apple acquires Intel's smartphone modem business for US$1 billion
Apple officially completes US$1 billion acquisition of Intel's smartphone modem business
Apple now owns Intel's smartphone modem business. Intel announced that it has completed its sale of the majority of its smartphone business to Apple, in a US$1 billion deal that was first announced in July. This transaction would allow Intel to focus on developing technology for 5G networks, while still potentially working on modems for other applications outside of smartphones, such as PCs, internet of things devices, and autonomous vehicles.
However, despite the US$1 billion valuation of the acquisition, Intel says it's still taking a multi-million dollar loss. And in a court filing last week, the chipmaker claims Qualcomm's anti-competitive practices were what forced it out of the market.
On Apple's end, the company would be able to reduce its reliance on Qualcomm, with which it's had a fraught relationship, and gain control over an even greater portion of the technology used in its devices. Apple can now obtain more components for its phones in-house, part of the company's longstanding strategy of moving away from third-party vendors. Apple already uses its own A-series chips in the iPhone, and there are rumours that it will replace Intel CPUs in some of its computers with its own ARM-based chips.
The final deal sees Apple take on around 2,200 employees from Intel, in addition to various equipment, leases, patents and other intellectual property.
However, it might still be a while before you see Apple's own modems show up in the iPhone. As part of the resolution of the billion-dollar legal battle between Apple and Qualcomm, the two signed a multi-year chipset supply deal and agreed to a six-year patent licensing deal.