Earlier this year, Intel sold its lead 5G mobile modem developer to Apple that marked the former’s exit from the market. The news broke in July and had seen the Cupertino based company sign an agreement with the chip manufacturer to acquire its 5G modem division for 1 Billion US Dollars.

According to Intel, the evaluation of just a billion dollars is grossly undervalued. The company stated it as a ‘multi-billion dollar loss’ and has accused Qualcomm with its anti-competitive business practices that had forced them to leave the market. Intel was quite public and clear with its reasons, citing ‘no clear path to profitability and positive return’ as a major factor. The reason behind these issues is alleged to be Qualcomm, who is also currently facing an antitrust probe from the FTC.

Recently, Qualcomm has been trying to challenge the ruling by the FTC (Federal Trade Commission). At the same time, Intel filed a brief at the 9th US Circuit Court of Appeals that supports the FTC’s decision against Qualcomm. In the brief, Intel explains that the accused mobile chipmaker giant has been crafting licensing arrangements for its CDMA and LTE intellectual property in a way that hampers and disrupts potential competitors.

In other words, Qualcomm implements a ‘no license, no chip’ policy that prevents smartphone manufacturers from buying Intel’s or other competitors’ chips unless they agree to a patent deal. This deal made it much more expensive for OEMs to enter supply agreements with Qualcomm’s rival chipmakers. Additionally, Intel also pointed at Qualcomm’s antitrust fines that measured in billions of dollars in multiple countries all across the globe.

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In a blog post, Intel’s General Counsel stated that “Intel suffered the brunt of Qualcomm’s anti-competitive behaviour, was denied opportunities in the modem market, was prevented from making sales to customers and was forced to sell at prices artificially skewed by Qualcomm.” Intel said it “invested billions of dollars, hired thousands, acquired two companies and built innovative world-class products that eventually made their way into Apple’s industry-leading iPhones, including the most recently released iPhone 11.”

Unfortunately, the agreement with Apple didn’t make things any better for Intel. The former has now settled all litigations with Qualcomm which is now the sole supplier of modems for the iPhones for the next 6 years. Lastly, Intel is still in the market selling its 4G modems in PCs, but the chipmaker is essentially leaving the modem business in the near future. The recent deal with MediaTek to integrate its 5G modems on Intel-based laptops is a sign of this.

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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.

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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