Apple may have written a check and signed a deal with Qualcomm in order to ensure a 5G iPhone wasn’t late to market, but it’s clear the Cupertino hardware giant wasn’t interested in burying the hatchet too deep.
A new report from the Wall Street Journal says the company has been negotiating with the chipmaker and is close to signing a deal, which could be made official as early as next week if all goes well. Apple is willing to pay $1 billion or more for a bundle of key patents and engineering talent, in a move that could see the company in a much better position to make its own wireless chips, and Intel shedding some fat to focus on data infrastructure.
Back in April, Intel pulled out of the 5G modem business, after years of heavy investments that needed a sensible reason to continue. Apple had been using the company’s baseband chips in its products as leverage in a Qualcomm dispute over pricing, but the two companies ended up dropping all litigation worldwide. Then Intel CEO Bob Swan sought to clarify the company’s retreat, saying that it made little sense to keep pushing in a difficult market if it lost its largest customer, and thus any chance at making a profit. From Apple’s perspective, Chipzilla wasn’t likely to deliver its 5G wonder chips soon enough for its own plans, and so it was forced to return to Qualcomm or risk lagging too far behind the rest of the industry.
There have been not-so-subtle hints this might happen. Apple poached Intel’s 5G leader weeks before the Qualcomm deal, for one thing. It has also signaled more than once that it wants to develop its own cellular chipsets between job listings and a decision to add jobs in Qualcomm’s backyard. The company wants all the wireless resources it can get, and it’s willing to go to great lengths to get them.
An Intel acquisition wouldn’t necessarily herald the return of Intel-style modems to Apple devices. Like with the acquisition of PA Semiconductor, this would be more about snapping up talent than anything. Any wireless chipsets coming out of an acquisition could take years to complete.
