Apple has announced that it will be acquiring majority of Intel’s smartphone modem business for $1 billion. The acquisition includes equipment, 17,000 patents and 2,000 employees. The deal will be closed by fourth quarter of 2019, if everything goes through regulatory approvals without any issues.
The intellectual property includes 17,000 patents related to cellular technology as well as modems. Intel will still be able to create modems for non-smartphone devices like PCs, Internet of Things and autonomous vehicles.
Despite the acquisition, Intel’s CEO Bob Swan says that the company will be focused on 5G technology for other devices.
“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. “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.”
Johny Srouji, Apple’s senior vice president of Hardware Technologies, also had a quote in the press release by both Apple and Intel.
“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.”
Rumors were making the rounds earlier this week that this deal would be happening and it turned out to be true. Apple had already been working on its own modem tech to include in iPhones and iPads and as per reports, the company was on track to deliver in 4-5 years. However, this acquisition should help Apple speed up its efforts considerably.
Apple was relying on Intel to develop 5G modems to be used for iPhone and iPad, as soon as next year. However, Intel was not able to deliver which meant that Apple had to settle its court battle with Qualcomm. This means that Qualcomm will be supplying 5G modems for iPhones and iPads for some years, until Apple can start mass-producing its own. As per a report by analyst Ming-Chi Kuo, all iPhones will have 5G by 2021 and from 2022 onwards, Apple will be working on replacing Qualcomm’s modems with its own.
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