Santa Clara / Cupertino, US, July 25, 2019 — Apple and Intel have come to an agreement that allows Apple to acquire the majority of Intel’s modem business with a smartphone focus. This will mean a serious change for about 2,200 Intel employees who will join Apple directly. The deal is expected to be completed by the fourth quarter of 2019.
The whole transaction is stated to have a value of $1 billion and it will include not only staff but also the intellectual property (IP), inventory, equipment, and leases. This whole endeavor does not only add unexpected ripples to what the market expected from Intel but possibly also introduces Apple to build its own 5G hardware for the iPhone and other products.
Apple can build 5G phones, Intel retains PC, IoT, vehicle space
Instead of working on smartphone modems, which are then sold to various phone manufacturers, Intel plans to concentrate their energy towards a strategy with a focus on network transformation and edge-computing. For Apple, this could be interesting, as they will bypass any external factors in their modem procurement. On the other hand, they could even sell their parts to partners, if they choose to.
The acquired intellectual property consists of more than 17,000 wireless technology patents which are ranging from protocols for cellular standards to modem architecture and modem operation. It is however interesting to point out that Intel will reserve the option to keep on developing modems for everything that is not a smartphone. By doing so, they can maintain their momentum in the markets for IoT devices and autonomous vehicles.
Leadership insights
“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,” said Intel CEO Bob Swan. “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.”
“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,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies. “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.”
Photo credit: All the photos have been provided by Intel Corporation for press use.
Source: Intel press release
