Intel exits 5G smartphone modem business on heels of Apple-Qualcomm settlement
Apple supplier Intel on Tuesday announced plans to exit the 5G smartphone modem business, with the decision arriving on the heels of a settlement reached in the wide sprawling Apple v. Qualcomm legal battle.
The news was announced in a brief press release posted to Intel's website.
Along with a withdrawal from 5G modem development, the chipmaker will assess potential opportunities to integrate 4G and 5G modems in PCs, internet of things devices and other data-centric devices, the company said. Intel said it expects to continue work in 5G network infrastructure.
"We are very excited about the opportunity in 5G and the cloudification' of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns," said Intel CEO Bob Swan. "5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world."
The announcement comes after Apple and Qualcomm reached a surprise settlement in a long-running legal war over patent licensing and royalties. Revealed earlier today, the settlement includes a multi-year chip agreement that allows Qualcomm to once again enter Apple's iPhone supply chain, presenting a competitor to Intel's as-yet-unreleased -- and now never-to-be-released -- 5G solution.
While iPhone relied solely on Qualcomm cellular modems for years, Apple welcomed Intel into the fold in 2016 with iPhone 7. Intel's share of iPhone orders grew with iPhone 8, 8 Plus and X before Apple completely pivoted away from Qualcomm with 2018's iPhone XR and XS.
Intel was reportedly hard at work on a 5G chip, the XMM 8160, slated to debut in the second half of 2019. That chip was slated to make its way into Apple devices, but reports earlier this month claim the tech giant had "lost confidence" in Intel's ability to deliver the chip on schedule.
By contrast, Qualcomm's first-generation 5G modem has been evaluated by other manufacturers and will be available in smartphones later this year. A report today said Apple has been evaluating Qualcomm 5G silicon in tandem with settlement negotiations and will likely adopt the chips in 2020.
As iPhone demanded the lion's share of Intel's production capacity, Apple accounted for a bulk of the chipmaker's modem business revenue. With Qualcomm back in the mix, and bearing working 5G chips, Intel apparently felt further development of the XMM 8160 was no longer tenable.
The news was announced in a brief press release posted to Intel's website.
Along with a withdrawal from 5G modem development, the chipmaker will assess potential opportunities to integrate 4G and 5G modems in PCs, internet of things devices and other data-centric devices, the company said. Intel said it expects to continue work in 5G network infrastructure.
"We are very excited about the opportunity in 5G and the cloudification' of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns," said Intel CEO Bob Swan. "5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world."
The announcement comes after Apple and Qualcomm reached a surprise settlement in a long-running legal war over patent licensing and royalties. Revealed earlier today, the settlement includes a multi-year chip agreement that allows Qualcomm to once again enter Apple's iPhone supply chain, presenting a competitor to Intel's as-yet-unreleased -- and now never-to-be-released -- 5G solution.
While iPhone relied solely on Qualcomm cellular modems for years, Apple welcomed Intel into the fold in 2016 with iPhone 7. Intel's share of iPhone orders grew with iPhone 8, 8 Plus and X before Apple completely pivoted away from Qualcomm with 2018's iPhone XR and XS.
Intel was reportedly hard at work on a 5G chip, the XMM 8160, slated to debut in the second half of 2019. That chip was slated to make its way into Apple devices, but reports earlier this month claim the tech giant had "lost confidence" in Intel's ability to deliver the chip on schedule.
By contrast, Qualcomm's first-generation 5G modem has been evaluated by other manufacturers and will be available in smartphones later this year. A report today said Apple has been evaluating Qualcomm 5G silicon in tandem with settlement negotiations and will likely adopt the chips in 2020.
As iPhone demanded the lion's share of Intel's production capacity, Apple accounted for a bulk of the chipmaker's modem business revenue. With Qualcomm back in the mix, and bearing working 5G chips, Intel apparently felt further development of the XMM 8160 was no longer tenable.
Comments
is it too much of a leap to think maybe Apple is further ahead on their own modem design or both intel and Apple are further behind?
looking forward to more details if they ever come
So what caused what here? Qualcomm securing a deal causes intel to abandon 5G, or intel tell Apple they have no interest a few days ago and Apple rush to a deal?
And epic fail by a once great company.
Apple is the girl who went back to her ex and left the new guy lookin' stupid.
1. Intel found out about the Qualcomm settlement when we did, and the raw sewage hit the ventilation system. “but in the smartphone modem business it has become apparent that there is no clear path to profitability” should have been amended to add “without the iPhone as our main customer.” Let nobody say that Intel can’t react quickly and decisively when surprised.
2. Contrary to a number of comments here, Apple actually had three possibly suppliers of 5G tech: themselves (though that might require more time than the fall of 2020), Huawei (it’s a serous offer regardless of what you might think of them), and Intel (albeit who were falling behind again on schedules ... as seems normal for the company of late ...). Perhaps Apple gave Intel a heads-up on the talks with Qualcomm once it looked like it would happen, but swore them to secrecy until the deal was signed. For Intel (in this scenario), their announcement was a sigh of relief — now they don’t have to meet the deadlines, and Apple doesn’t hate them for failing. Again in this scenario, Apple pulled a fast one on Qualcomm by using these competitor offers to force them into a deal — and Qualcomm just found out about the Intel pullout when we did.
3. Qualcomm used the fact that Intel hasn’t met a deadline it didn’t ignore for the last few years to break Apple’s resolve and force a deal. Qualcomm gets to keep their illegal business model for a while longer (and this assumes the FTC and ITC don’t move against them; I personally think the FTC will prevail) in exchange for a partial repayment by both sides of monies withheld, and a sizable (but probably not 100 percent) share of Apple’s 5G modem business, which is likely to expand into Macs (at last!) if the terms of the deal were acceptable enough.
As you can probably guess, I’m hoping that (2) or some variation thereof is what happened. Intel doesn’t seem to have been “blindsided” by this news (or at least they’ve not made a reference to that, and they clearly have a Plan B in place). I hope this doesn’t damage Apple’s relationship with Intel prematurely: the company is already looking likely to have a lot of their Apple business phased out over the next half-decade. I’d love it if Apple got the upper hand in this deal, but we do need to be prepared for the idea that maybe Qualcomm did — it could certainly be that Apple got their hands on the 5G chips and saw that they were advanced enough to justify swallowing their pride to some degree.
I'm sad to see Intel exit the market, though. QC needs some good competition - both with Apple and with other manufacturers.
Yipppee 🤣
Still, there is a possibility Apple would surprise us with in-house modem chip (some components might still require paying license to Qualcomm but that has been settled).
I'm really hoping that Apple got the better fo QC though, their business practices are just awful.
That’s because it didn’t happen in that order. Apple was leveraging the lawsuit to achieve a fairer licensing agreement with Qualcomm. Intel would have told Apple they couldn’t deliver. Apple asked them not announce that as it would weaken their negotiations with Qualcomm. In the end Apple made the judgement that (regardless of the merit of their case) continued dispute with Qualcomm with no alternative puts their future business at risk. Apple most likely acquiesced entirely to Qualcomm’s demands. The messaging is being packaged is a ‘licensing agreement’ to save face.
I know the company Intel bought its cell technology from (Infinion) and I know of the software they used to develop the software on. Lets say that it was one bag of hurt Infinion was more than glad to get rid of.
I’m not surprised that Intel cannot deliver, It’s too much software to replace in a few years time ...
And yes, epic fail on Intels part (Swans statement on itself is a clear indication of Intels demise).