Tuesday, 23 July 2019 10:58

Apple close to buying Intel's 5G modem biz: report Featured

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Apple close to buying Intel's 5G modem biz: report Pixabay

Apple may soon have a missing piece in its iPhone manufacturing chain if it succeeds in acquiring Intel's 5G smartphone modem business, with reports that the two companies are well advanced in talks to achieve this end.

The deal will be worth about US$1 billion, pocket change for either Apple or Intel, but a crucial one for Apple as it seeks to prop up its iPhone business that has been its main money maker but which has lost some steam over the last couple of years, The Wall Street Journal reported.

Earlier this year, Intel said it was shutting down its 5G modem business after Apple and Qualcomm reached an out-of-court settlement to end all pending litigation between them, and also signed a multi-year deal for supply.

The two companies struck a six-year licence agreement, effective from 1 April, which includes a two-year option for extension and a multi-year chip supply deal.

Intel had been Apple's supplier of 4G smartphone modems after the relationship between Qualcomm and the iPhone manufacturer soured.

But soon after the Apple-Qualcomm announcement, Intel said it would be exiting the 5G smartphone modem business and not even launching the products it had planned for 2020.

The WSJ said any deal would give Apple access to development work as it looked to differentiate the iPhone further from other smartphones in what has become a crowded field. The iPhone maker has hired engineers, some from Intel, and announced some 1200 workers would take up this work in an office in San Diego.

The benefit to Intel would be getting rid of an unit that has been losing close to US$1 billion every year. However, Intel would continue to work on 5G technology for other connected devices.

At the time when it announced it would halt work on 5G smartphone modems, Intel's chief executive Bob Swan said it had become apparent that there was no clear path to profitability for this line.

“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property," Swan, who took over from Brian Krzanich earlier this year, said.

"We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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