Apple is said to be in the advanced stages of making a deal with Intel for its modem business, the Wall Street Journal reported on Thursday. This report comes a couple of months after Qualcomm and Apple announced a truce to ensure steady supply of its modems for the upcoming iPhones.
The deal is said to cover Intel’s portfolio of patents and staff in its modem business valued at $1 billion. An official announcement is expected sometime in the next week when the deal could be finalized. Buying off Intel’s modem business would be crucial for the iPhone maker as it would speed up plans for its inhouse modem development. The company has been looking to setup a similar department to its inhouse chip development team for its modem business. This would ensure it’s capable of developing and using inhouse modem chips for future iPhone models. The company has already hired engineers and executives, some of whom are from Intel for this purpose.
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Getting access to Intel’s talent and patents in the modem business would give a solid boost to its inhouse modem development plans. This is particularly important in the next couple of years where 5G will become an important cellular network technology for smartphones.
(Source: Intel Corporation)
As for Intel, this would be a very good opportunity to shed off a loss-making business unit. After Apple and Qualcomm made a deal back in April, Intel was quick to announce its departure from the modem business for smartphones. This wasn’t surprising given Apple was the semiconductor giant’s biggest customer and it didn’t make sense to continue running the business without the iPhone maker. To recall, Intel was the sole third-party modem provider for last year’s iPhone models.
If this deal goes through, expect an official announcement from both the companies in the coming weeks.
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