In an official statement, Apple announced it will acquire the majority of Intel’s smartphone modem business. The companies said that the deal is valued at $1 billion. Around 2,200 Intel employees will join Apple along with Intellectual Property, and equipment under the deal. The deal doesn’t affect Intel’s right to develop modems for non-smartphone devices such as PCs, IoT devices and self-driving vehicles.
Modem chipsets connect smartphones to wireless data networks. The acquisition means that Apple is now on the way to producing its own 5G modems for smartphones. The Cupertino-based company has always relied on outside suppliers for its hardware. However, it recently resolved a prolonged legal fight with chipmaker Qualcomm, and post this Intel announced its exit from the 5G phone business as a result of the settlement.
Commenting on the deal, Apple’s SVP of hardware technologies, Johny Srouji, said the acquisition will “help expedite our development on future products and allow Apple to further differentiate moving forward.”
The deal with Intel will bolster Apple’s goal to make its own modem chips and reduce the company’s reliance on Qualcomm. The two Silicon Valley giants have been in talks since last summer. The deal will allow Apple to design its own modems, integrate them with its products and develop new features. Apple phones currently don’t support 5G networks. With the deal with Intel, Apple is looking to develop its in-house modem technology.
According to a report by Reuters, Apple plans to use Qualcomm’s modem for a 5G iPhone in 2020, but wants to have internally developed modems for use by 2021. The report further states that any replacement of Qualcomm modems will likely happen in phases, and Apple might still have to rely on Qualcomm given the latter’s modems have worldwide compatibility.