Intel announced it has completed the sale of the majority of its smartphone modem business to Apple for $1 billion following regulatory approval. The transaction was first announced in July and includes intellectual property, equipment, and approximately 2,200 Intel employees joining Apple.
By owning Intel’s modem technology, Apple will be able to source more components for its connected devices in-house rather than turning to vendors like Qualcomm a company with which Apple has a bitter relationship.
The sale only includes Intel’s smartphone modem business; the chipmaker will still be creating modems for PCs, IoT gadgets and autonomous vehicles.
Intel claims that Qualcomm’s anti-competitive patenting tactics forced the sale of its smartphone modem business to Apple. The company’s executives have been testifying about the claim in court as part of the FTC’s ongoing antitrust case against Qualcomm. A judge ruled against the company, but Qualcomm appealed the decision, bringing the case to the 9th U.S. Circuit Court of Appeals.
Last week, Intel admitted that it sold its smartphone modem business to Apple at “a multi-billion dollar loss,” according to court documents unearthed by Reuters. Intel added that rival chipmaker Qualcomm’s patent licensing practices “strangled competition” and effectively forced it to exit the market.
Apple is expected to use Qualcomm modems for its first 5G-enabled iPhones next year, as part of a six-year licensing agreement between the companies. Farther down the road, multiple reports have claimed that Apple plans to develop its own modems for iPhones by 2022-23, and this Intel deal would certainly help those efforts.
