Apple contemplated buying parts of Intel's cellular modem business to speed up 5G

Posted:
in iPhone
Apple was indeed in talks about potentially buying portions of Intel's cellular modem business in order to speed up its own internal modem development, a report claimed on Friday.

iPhone XS and XR


Conversations began in summer 2018, and continued for several months, according to the Wall Street Journal. They ended, however, by the time Apple reached its settlement with Qualcomm earlier this month. Intel announced its departure from the 5G modem business the same day.

Intel is now looking at "strategic alternatives" for its modem business, and could still potentially sell to Apple or another firm, Journal sources said. Analysts previously speculated about an Apple takeover.

Intel has been Apple's primary 4G modem supplier since late 2016, mostly because of the global legal battle with Qualcomm over patents, royalties, and business models. Apple and government agencies accused Qualcomm of abusing its market position to force chip buyers into patent license agreements.

It's widely suspected that Apple settled with Qualcomm partly because Intel was taking too long to develop a 5G modem. It seemed increasingly likely that Intel would miss a deadline for 2020 iPhones, never mind 2019 models, and few other companies are in a position to deliver 5G chips. 2019 iPhones will likely to continue to use Intel 4G modems.

Court evidence exposed the fact that Apple had a years-long plan to reduce its royalties to Qualcomm -- one document explictly stated that it wanted to "hurt Qualcomm financially" and "put Qualcomm's licensing model at risk." The company even deliberately licensed less expensive patents to make Qualcomm's rates seem excessive -- with that made public, chances of victory in the lawsuit probably became slim.

While 2020 iPhones are expected to use Qualcomm chips, Apple is believed to be working on its own modem with senior hardware VP Johny Srouji at the helm. That would offer the triple benefit of optimized hardware, better-timed development, and avoiding outsourcing costs.
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Comments

  • Reply 1 of 22
    thttht Posts: 3,230member
    Ben Bajarin was rumormongering this last year, that Apple would buy Intel’s modem business. He also said Apple does half the work in “Intel’s” modem development, so Apple buying Intel’s modem assets was very possible.


    n2itivguycurtis hannahjony0
  • Reply 2 of 22
    FatmanFatman Posts: 300member
    Im sure others will want this tech - especially China. Apple has some leverage, since they buy CPUs from Intel, maybe negotiate a good deal on the assets/IP as well as some chip specific engineers.
  • Reply 3 of 22
    1st1st Posts: 372member
    good move. just the talent alone is worth the money. Modem  intergrated with antenna design and custom amp will go a long way (both latency and singal strength plus battery utilization).  Good to see a system house pick up components as vertical integration (the industry has been fragmented for too long, that let the components vendor such as QC to dictate progress.  hopefully, it is time for change - better change in std too - wash down std by vendors, hard to see good std, such as bellcore come  out nowadays... sad).   
  • Reply 4 of 22
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    cornchipjony0
  • Reply 5 of 22
    wood1208wood1208 Posts: 1,968member
    If Intel not going to be in 5G smartphone modem business than worth handover to Apple. Let Apple finish the job, use 5G modem in iPhone,iPad,Macbook/Pro, etc and let Intel use finished 5G tech in rest of areas like Cars,Home hub,Enterprise. It's Win-Win.
  • Reply 6 of 22
     Intel modems are not in the same league as QCOM’s. Good news that Apple didn’t make this deal. 
    n2itivguy
  • Reply 7 of 22
    1st1st Posts: 372member
    Agree as per today (QC is in the lead).  You never know where tomorrow (or 3 yrs later - 2022, calculated based on 2 generation of semi 18 month rule and half life of 6 yrs QC deal.  you need time to go through qual and test, integration and optimization, perfect timing for 5G network to catch up and deploy in a meaningful way... note: VZ add 20 cities and T-Mobile will lauch only in the major cities soon... in addition, 5G handset application still limited due to both network and battery limitation (not mention coverage).  ATT will charge more for 5G too.  So let's get feet wet with QC and pull out of big gun when the field is ready... (QC possibly too busy to catch up shipment of current modem, has little or no energy to invent something from ground up - such as required for integrated modem... my 2 cents).  Let the race begin.  However, I will not discount the team of Nokia+Ericsson, especially, Ericsson got very strong background in mm communication way back prior to Jobs resurface at Apple.  EU's ADCT is some force that should not under estimate - even with Britexit. 
  • Reply 8 of 22
    iOS_Guy80 said:
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    X86 chips seem to be not likely to be around long since the Apple Arm chips are already so good.
    GeorgeBMaccornchip
  • Reply 9 of 22
    Johan42Johan42 Posts: 163member
    iOS_Guy80 said:
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    Good thing you’re no CEO.

    iOS_Guy80 said:
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    X86 chips seem to be not likely to be around long since the Apple Arm chips are already so good.
    I’m sorry but X86 won’t be gone any time soon since it’s actually better than ARM.
  • Reply 10 of 22
    karmadavekarmadave Posts: 315member
    Glad Apple passed on buying Intel’s 5G modem business. If the world’s leading semiconductor company couldn’t get their 5G product to market, until at least 2020, what makes people think Apple can? I realize Apple has other considerations, but it doesn’t seem feasible when they recently signed a deal, for 5G, with Qualcomm. I also think Apple should stick with x86 for Macintosh. Enough people already use their iOS devices, in lieu of their PC (or Mac) so there’s really no need in my opinion. The iPad Pro is a great alternative to a traditional laptop. Apple makes enviable margins, on x86 Macs, so squeezing out a few extra dollars doesn’t justify the costs of switching architectures.
  • Reply 11 of 22
    mdriftmeyermdriftmeyer Posts: 7,282member
    iOS_Guy80 said:
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    They're better off buying AMD as an independent subsidiary.
    n2itivguycornchip
  • Reply 12 of 22
    I don’t get the leap-to-conclusion with regard to Q’s opening statement, a statement Apple never had a chance to respond to. If trials ended after the opening statements, nothing would ever be resolved. The context of those emails, what led to them, is missing. No doubt Apple was ready to respond.

    Perhaps I’m misreading the article, but it seems to imply Q’s knowledge of them was somehow a surprise to Apple. That’s not how it works. 
    leavingthebigg
  • Reply 13 of 22
    Fatman said:
    Im sure others will want this tech - especially China. Apple has some leverage, since they buy CPUs from Intel, maybe negotiate a good deal on the assets/IP as well as some chip specific engineers.
    Well, Apple may be switching to ARM processors soon for desktops and laptops.
    Intel has lost its edge over the years since it lost the cell phone/tablet processor war.  It needs to do more now or AMD will clean its clock.
    They paid too much for MobileEye and they appear to be seating on the technology.
  • Reply 14 of 22
    knowitallknowitall Posts: 1,360member
    Intel modem business buy would have been a very bad idea.
    So Apple lost on all fronts from Qualcomm and even used unfair tactics in the process ...
    What about Apples high moral standards?

  • Reply 15 of 22
    GeorgeBMacGeorgeBMac Posts: 4,701member
    Buying Intel would be a bit like buying a designer and builder of internal combustion engines that use carbs & overhead valves -- or even just buying the carburetor division.  No matter how you come at it...

    Actually, it just shows how badly they wanted to stay away from Qualcomm and how desperate they were for a 5G modem.
    edited April 27
  • Reply 16 of 22
    MplsPMplsP Posts: 1,454member
    curtis hannah said:
    iOS_Guy80 said:
    Apple should just buy all of Intel and get on with designing and building all of their chips. 
    X86 chips seem to be not likely to be around long since the Apple Arm chips are already so good.
    x86 chips are used for a lot more than laptops and desktops. There is a huge installed base of older 86 chips in industry. There are many applications that don't need the newest, fastest processor. They need something cheap and reliable and an older x86 chip gives you just that. In addition, keeping the same processor architecture eliminates the need to completely re-write (and debug) code. 
    muthuk_vanalingamGeorgeBMac
  • Reply 17 of 22
    MplsPMplsP Posts: 1,454member
    Not that I would have been disappointed to see Apple design their own modem chips - we need more competition in the market, but if they wanted to stay away from QC, buying Intel's modem tech would not have been a good way to do it. With the amount of Patents and IP that QC owns in modem technology they would undoubtedly been mired in IP lawsuits for  years to come, especially if QC was already pissed off about Apple leaving and withholding royalties. Ultimately, I think it would have been a difficult financial proposition when you look at the costs to acquire the tech and the development and production costs.
    muthuk_vanalingamGeorgeBMac
  • Reply 18 of 22
    wood1208wood1208 Posts: 1,968member
    Settlement between Qualcomm and Apple is big relief for Qualcomm. Why ? Currently, Samsung,MediaTek and Huawei have there own 5G modem. Like in past, Qualcomm was only provider of cellular modem to phone manufacturers but not going forward for 5G. So, Qualcomm needs Apple as a customer more than Apple needs Qualcomm as supplier.
    As Intel dropped out of 5G smartphone modem business, Intel should handover(or sell) cellular modem business to Apple and let Apple finish the final development/test of 5G modem tech. Apple uses it in it's future iPhones/iPad/Macbook/PRO. Meanwhile under new settlement/agreement Apple uses Qualcomm 5G modem until Apple has it's in-house 5G tech ready.

  • Reply 19 of 22
    wood1208 said:
    Settlement between Qualcomm and Apple is big relief for Qualcomm. Why ? Currently, Samsung,MediaTek and Huawei have there own 5G modem. Like in past, Qualcomm was only provider of cellular modem to phone manufacturers but not going forward for 5G. So, Qualcomm needs Apple as a customer more than Apple needs Qualcomm as supplier.
    As Intel dropped out of 5G smartphone modem business, Intel should handover(or sell) cellular modem business to Apple and let Apple finish the final development/test of 5G modem tech. Apple uses it in it's future iPhones/iPad/Macbook/PRO. Meanwhile under new settlement/agreement Apple uses Qualcomm 5G modem until Apple has it's in-house 5G tech ready.

    Nobody owns 5G except QC

    All others are infringing or already paying royalties to QC
  • Reply 20 of 22
    GeorgeBMacGeorgeBMac Posts: 4,701member
    wood1208 said:
    Settlement between Qualcomm and Apple is big relief for Qualcomm. Why ? Currently, Samsung,MediaTek and Huawei have there own 5G modem. Like in past, Qualcomm was only provider of cellular modem to phone manufacturers but not going forward for 5G. So, Qualcomm needs Apple as a customer more than Apple needs Qualcomm as supplier.
    As Intel dropped out of 5G smartphone modem business, Intel should handover(or sell) cellular modem business to Apple and let Apple finish the final development/test of 5G modem tech. Apple uses it in it's future iPhones/iPad/Macbook/PRO. Meanwhile under new settlement/agreement Apple uses Qualcomm 5G modem until Apple has it's in-house 5G tech ready.

    Nobody owns 5G except QC

    All others are infringing or already paying royalties to QC
    That sounds like something Qualcomm would say.
    All evidence seems to point to Huawei as the world leader.   Despite immense political pressure, Europe won't stop using them.  They say they need them.  I think even S.Korea, Samsung's home terf is using them.
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