Intel exits 5G smartphone modem business on heels of Apple-Qualcomm settlement

Posted:
in General Discussion edited April 16
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.

Intel


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.
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Comments

  • Reply 1 of 29
    Wow!  Wish we knew more, but I suppose neither party will be releasing those details :pensive: 

    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
    vukasikamuthuk_vanalingamrandominternetpersonwatto_cobra
  • Reply 2 of 29
    mattinozmattinoz Posts: 1,043member
    I do wonder then if Apple has won a fixed price per device argeement with QC. That would let them make MacBooks with with cell modem embedded in the Tseries chips with a design licenced from Intel. While the iPhone uses Apples own design as standalone chip.
    curtis hannahwatto_cobra
  • Reply 3 of 29
    asdasdasdasd Posts: 5,283member

    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. 
    larryjwmuthuk_vanalingamrandominternetpersoncurtis hannahMplsPelijahgradarthekatwatto_cobra
  • Reply 4 of 29
    asdasd said:

    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. 
    According to the Nikkei, Apple and Qualcomm have been hammering out the settlement for weeks.  Apparently the talks got far enough along for Apple to test QC's chips and have some of their contractors test QC's chips.  At some point, I'm guessing the realization hit that Intel didn't stand a chance at competing.  Since Apple was essentially Intel's only mobile chip customer...  

    Apple is the girl who went back to her ex and left the new guy lookin' stupid.
    trashman69gatorguychiacurtis hannahmazda 3sfirelocklostkiwi
  • Reply 5 of 29
    I'm amazed this happened so quickly.  Intel announces it's abandoning a line of business hours after the Apple-Qualcomm settlement?  What was the rush?  They must have thought the market was going to beat them up once Q got Apple's business, so they wanted to pull off the bandaid all at once?
    curtis hannahFatmanwatto_cobra
  • Reply 6 of 29
    1st1st Posts: 345member
    Good move on Intel. Get it perfect on the IoT prior to mobile is a good game plan. Hopefully, Apple will provide some thing to sooze the pain (ego too). 5G still early in the game, everyone still got chance to catch up... even QC set is not that impressive as yet. Just make sure it can be drop in fit for future (pin to pin compatible would be better, especially in high speed - to re-spin a board with all the impedance matched design is pain). Lay low and ready to jump high next ;-).
    watto_cobra
  • Reply 7 of 29
    SoliSoli Posts: 8,748member
    This can’t be a coincidence, but I can’t tell which one is the catalyst for the other: Apple settled with Qualcomm because Intel couldn’t get them viable 5G chips in time -or- Intel canned their 5G efforts because Apple partnered with Qualcomm. I can make an argument for both.
    edited April 16 MplsPmuthuk_vanalingamradarthekatwatto_cobra
  • Reply 8 of 29
    chasmchasm Posts: 1,414member
    We don’t really know enough to make a good judgement on this, but there are three scenarios I think are probable, and one of them is likely to be close to what happened:

    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.
    edited April 16 bageljoey1stradarthekatwatto_cobra
  • Reply 9 of 29
    wood1208wood1208 Posts: 1,940member
    This is good and bad news. First, Qualcomm will be more arrogant with only leading 5G tech supplier. 2nd, we have no two sides commenting Intel/Apple vs Qualcomm modem tech. But, now iPhone will have QC 5G modem. if not in 2019 than certainly 2020. Than, 2021 iPhone will integrate licensed QC 5G tech on A-series SOC with TSMC's 5nm.
  • Reply 10 of 29
    I guess this means I may be getting a 5G iPhone earlier than 2021 now.
    curtis hannahswiftrun
  • Reply 11 of 29
    I guess this means I may be getting a 5G iPhone earlier than 2021 now.
    I can’t help but assume this was done in April of this year because Apple insisted the modems by later this year and Intel made it clear 2020 was an early estimate.
  • Reply 12 of 29
    MplsPMplsP Posts: 1,297member
    asdasd said:

    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. 
    Soli said:
    This can’t be a coincidence, but I can’t tell which one is the catalyst for the other: Apple settled with Qualcomm because Intel couldn’t get them viable 5G chips in time -or- Intel canned their 5G efforts because Apple partnered with Qualcomm. I can make an argument for both.
    Exactly. Did Intel's failure push Apple to the bargaining table? Did Intel tell Apple that they were 2 years out at best? How much did QC know, and when? This adds a whole bunch of new scenarios to the rumor mill.

    I'm sad to see Intel exit the market, though. QC needs some good competition - both with Apple and with other manufacturers.
    watto_cobra
  • Reply 13 of 29
    I'm amazed this happened so quickly.  Intel announces it's abandoning a line of business hours after the Apple-Qualcomm settlement?  What was the rush?  They must have thought the market was going to beat them up once Q got Apple's business, so they wanted to pull off the bandaid all at once?
    Just a guess, but I'd bet Intel was informed at some point after Apple tested QC's chips that they'd likely be going back to QC chips.  I'd also bet they were told to hold off their announcement of abandoning 5G mobile chips until Apple and Qualcomm announced their settlement.  It would make no sense for Intel to make a knee-jerk announcement to the settlement announcement.  The timing of their acquiescence and announcement was too coincidental to be reactionary.  imo, of course
    radarthekat
  • Reply 14 of 29
    I guess this means I may be getting a 5G iPhone earlier than 2021 now.
    You and me both!👌🏼
    Yipppee 🤣
    watto_cobra
  • Reply 15 of 29
    kevin keekevin kee Posts: 1,001member
    asdasd said:

    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. 
    According to the Nikkei, Apple and Qualcomm have been hammering out the settlement for weeks.  Apparently the talks got far enough along for Apple to test QC's chips and have some of their contractors test QC's chips.  At some point, I'm guessing the realization hit that Intel didn't stand a chance at competing.  Since Apple was essentially Intel's only mobile chip customer...  

    Apple is the girl who went back to her ex and left the new guy lookin' stupid.
    Well, the new guy has proved to be incompetent, of course the girl ditch him especially if the ex could still offer a better performance despite all the bad blood history.

    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).
    watto_cobra
  • Reply 16 of 29
    I will choose to believe that QC came to the table and gave them a fixed licensing deal. Apple was not going to budge on the whole % of device cost, which makes tons of sense. Qualcomm can pull that garbage with other companies because those other companies are selling much cheaper devices. Also I bet there's no way that Samsung pays for a percentage of the cost of the device. I think in the future Apple will start building cellular modems into the A series chips and you'll start to see MacBooks, even iMacs and HomePods with cellular modems in them. I suspect in the future we'll see cell carriers try to replace landline connections.

    I also wouldn't be surprised if Apple pitched their own NMVO or some sort of deal with carriers where you could sign up to put your Mac online temporarily on your cellular plan when your home internet goes out. For a lot of people this wouldn't be a selling point but for some people with crappy local wired connections it could be a big selling point. Also in big cities it might make sense for some people to even put their whole home on a fixed cellular internet plan. (Assuming carriers start offering something much closer to unlimited data.

    I'm really hoping that Apple got the better fo QC though, their business practices are just awful.
    watto_cobra
  • Reply 17 of 29
    dunksdunks Posts: 1,240member
    I'm amazed this happened so quickly.  Intel announces it's abandoning a line of business hours after the Apple-Qualcomm settlement?  What was the rush?  They must have thought the market was going to beat them up once Q got Apple's business, so they wanted to pull off the bandaid all at once?

    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.
    radarthekatbadmonk
  • Reply 18 of 29
    knowitallknowitall Posts: 1,286member
    asdasd said:

    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. 
    The rumor is that Apple wasn't confident Intel could deliver on time (article).
    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).
    edited April 17
  • Reply 19 of 29
    FatmanFatman Posts: 286member
    Not surprising - I’ve ranted before about Intel’s negative contribution to the industry ... aside from their important contributions in the 70s, Intel has been stifling innovation with monopolistic practices for years. Monolithic, CISC based, power hungry chips with proprietary instruction sets. The only reason they are still in the CPU business is because of their tie in with Microsoft Windows. They lost their ability to innovate decades ago - and snuffed out more advanced technologies from AMD, Digital and IBM back in the 80s, 90s+. However they couldn’t beat ARM, since they didn’t have a mobile processor even close to what ARM has - now it’s the same scenario with Qualcomm, Intel just can’t make advanced power-sipping mobile chips — only overclocked, big chips best suited for hot running data centers. It will be a matter of time before they lose that market too, to AMD, ARM, Nvidia and others. It’s a shame - the greedy stock-owning executives ran the company, not the engineers!

    flyingdplostkiwi
  • Reply 20 of 29
    gatorguygatorguy Posts: 20,451member
    EDIT. Pip'd by two previous posters
    edited April 17
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