After reports, Apple and Intel have confirmed that Apple will acquire the majority of Intel’s smartphone modem business in a transaction valued at $1 billion. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. Intel closed its 5G modem business in April this year after Apple and Qualcomm announced a settlement and prior to this, Intel became the sole third-party provider of modems of the iPhones launched in 2018.
“Combining the acquired patents for current and future wireless technology with Apple’s existing portfolio, Apple will hold over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation,” said Apple.
Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles. It added that this will not impact to Intel’s 4G smartphone modem business. Buying Intel’ 5G modem business will help Apple to work on its own 5G modem which is said to be used in iPhones in 2022 or 2023.
Intel also reported second-quarter revenue of $16.5 billion, down 3% year-over-year (YoY), and profit was down $4.2 billion down 17% year-over-year (YoY). The company said that the second quarter results exceeded its expectations on both revenue and earnings.
The transaction is expected to close in the fourth quarter of 2019 after regulatory approvals and other customary conditions.
Commenting on this, Intel CEO Bob Swan, said:
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. 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, said:
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. 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.