Earlier this year, when Qualcomm and Apple were not on talking terms due to patent disputes, Apple was left out with Intel as its sole modem supplier. However, as Qualcomm rolled out its 5G modem and the dispute between Qualcomm and Apple came to an end, Intel sped up its plan to develop 5G modem before finally putting it to the grave. Since then, rumors that Apple is planning to manufacture its 5G modems to roll out 5G-enabled iPhones as early as 2020 have been doing the rounds.
Well, the thing is, Apple has acquired Intel’s smartphone modem business for a value of a whopping $1 billion and the transaction is expected to be completed by the last quarter of this year following approvals and customs conditions. Although Apple has acquired tens of small companies to date, Intel is only its second-largest acquisition after Apple acquired Beats Electronics in 2014 at a whopping $3.2 billion valuation. The acquisition includes 2,200 Intel employees who will become Apple employees and the Cupertino-based tech giant will get a hold on Intel’s intellectual property, equipment, and leases concerning the smartphone modems, although Intel will still retain some rights to it as well, according to the agreement.
Furthermore, post the transaction, Apple will get hold of over 17,000 wireless technology patents which include countless patents of its own and Intel’s and will include protocols for cellular standards to operate to modem architecture. Although not smartphone modems, Intel will still develop and manufacture modems for IoT devices, PCs, autonomous vehicles and others.
Apple posted a press release detailing everything about the acquisition. Apple will bring the team in-house where it will be able to develop its 5G modems for upcoming iPhones probably by 2020 or 2021 although we don’t know the exact timeline yet. It will “allow Apple to further differentiate moving forward” in the words of Johny Srouji, senior VP of Hardware Technologies at Apple. This will also help Apple’s dependency on Qualcomm modems and since Apple will have more control over its modem, it is another plus point for the company.
According to a person who happens to know about Apple developing its modem, Apple will roll out its in-house modems in phases and not entirely as a stock. This is because Apple will have to ensure that its modems are compatible with all the networks around all the countries around the globe. It will take some time to replace Qualcomm bit by bit, but until then, Qualcomm will stay put as its sole modem supplier. Apple is also exploring new modem design at the Taiwan-based Global Unichip Corp, although the process is at an early stage. As per the timeline concerns, Apple could start pushing out a few units of old and affordable smartphones (if not flagship devices) with its in-house modem by 2021 if not earlier.
Apple could use its stake in 17,000 wireless communication patents before rolling out 5G iPhones as it will have to license other technologies required by Huawei, Nokia, and Ericsson. The list also includes Qualcomm, however, and Apple has also signed a licensing deal with the San Diego-based chipmaker, which will be enough, I guess.
