Apple in 'advanced talks' to buy Intel's mobile modem business

Posted:
in iPhone edited July 22
Apple is allegedly in "advanced talks" to pick up Intel's smartphone modem business, ready to pay $1 billion or more for associated patents and workers.

Intel sign


A deal could be struck as soon as next week, said sources for the Wall Street Journal. The two sides have reportedly been in "off- and on-again" negotiations for a year, a major interruption taking place when Apple settled with Qualcomm and signed a new multi-year supply deal. At the same time, Intel announced it was abandoning work on 5G phone modems.

Intel's phone modem business has been losing about $1 billion per year, one source said.

Apple is believed to be developing its own 5G modem under senior hardware VP Johny Srouji, with an expected 2022 premiere. In the interim the company will likely use Qualcomm parts, since they're already in shipping 5G devices.

Buying out Intel talent and concepts could accelerate first-party development, though whether that would be enough to get a chip out in 2021 is unknown. Apple has long been hiring for its modem project and may have anticipated the Intel deal.

The company is believed to have been upset with Intel's progress towards a 5G modem for 2020 hardware. An April report said that Apple poached Intel's 5G modem lead shortly before the Qualcomm settlement, leaving the latter scrambling to put work back on track. The same month, Apple 5G lead Ruben Caballero departed.
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Comments

  • Reply 1 of 34
    AppleExposedAppleExposed Posts: 1,520unconfirmed, member
    Sounds good but WTF are patents worth anymore? Especially Intels.(no offense)
  • Reply 2 of 34
    They're worth some leverage in negotiation, especially with companies as large as Apple.
    AppleExposed
  • Reply 3 of 34
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
  • Reply 4 of 34
    macplusplusmacplusplus Posts: 1,907member
    That may also explain why an ARM Mac is out of question. Licence x86 instead of letting the Mac platform shift entirely to ARM. Just an uneducated guess...
  • Reply 5 of 34
    AppleExposedAppleExposed Posts: 1,520unconfirmed, member
    They're worth some leverage in negotiation, especially with companies as large as Apple.
    I figured that's it. It's like owning a pack of insults or something.
    cornchippscooter63JWSC
  • Reply 6 of 34
    Roger_FingasRoger_Fingas Posts: 148member, editor
    They're worth some leverage in negotiation, especially with companies as large as Apple.
    I figured that's it. It's like owning a pack of insults or something.
    It's also a matter of discovering design shortcuts and defending against lawsuits.
  • Reply 7 of 34
    HeliBumHeliBum Posts: 70member
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!


    That's $1 billion, which is practically petty cash for a company with as much cash as Apple.

    cornchiplolliverpscooter63
  • Reply 8 of 34
    sflocalsflocal Posts: 4,701member
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Assuming you meant to say "billion", even then that's lunch money for a company like Apple.
    pscooter63
  • Reply 9 of 34
    That may also explain why an ARM Mac is out of question. Licence x86 instead of letting the Mac platform shift entirely to ARM. Just an uneducated guess...
    x86 is not a roadblock to an ARM Mac

    https://docs.microsoft.com/en-us/windows/arm/
    bigpics
  • Reply 10 of 34
    LordeHawkLordeHawk Posts: 168member
    That may also explain why an ARM Mac is out of question. Licence x86 instead of letting the Mac platform shift entirely to ARM. Just an uneducated guess...
    This isn’t related to x86, but the patents related to mobile (5G) in particular.
  • Reply 11 of 34
    rwesrwes Posts: 171member
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Apple paid $3 billion for Beats and look at all the positive they were able to spin out of that acquisition.

    $1 billion for Intels modem business (though definitely not any where as mature as Qualcomms) would be a relative steal for apple. Looking at the pace of other aquitions as well, I doubt it would take even 2.5 years, but we are all guessing...
  • Reply 12 of 34
    rwes said:
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Apple paid $3 billion for Beats and look at all the positive they were able to spin out of that acquisition.

    $1 billion for Intels modem business (though definitely not any where as mature as Qualcomms) would be a relative steal for apple. Looking at the pace of other aquitions as well, I doubt it would take even 2.5 years, but we are all guessing...
    Comparing the Beats acquisition to Intel's modem business doesn't really work.  Beats brought 2 salable products to the table: headphones and a streaming service.  That's continued revenue and profit.  Intel brings no salable products to the table.  Intel's modem business would be a cost with no tangible ROI.  It's not like Apple will be selling modems to their competitors.  

    The cost of Intel's portfolio is relatively trivial for Apple to absorb.  The value of that portfolio has yet to be determined.  Do they have any SEP's?  SEP's are definitely valuable.  The rest?  Who knows.  There could be some diamonds in the rough.  There could also be a lot of rough and no diamonds.  Remember, Intel had the patent portfolio/modem business and managed to lose a rumored $1B a year with it.  
  • Reply 13 of 34
    fastasleepfastasleep Posts: 3,171member
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Apple has that much under their couch cushions.
  • Reply 14 of 34
    AppleExposedAppleExposed Posts: 1,520unconfirmed, member
    rwes said:
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Apple paid $3 billion for Beats and look at all the positive they were able to spin out of that acquisition.

    $1 billion for Intels modem business (though definitely not any where as mature as Qualcomms) would be a relative steal for apple. Looking at the pace of other aquitions as well, I doubt it would take even 2.5 years, but we are all guessing...

    I think he was being sarcastic?

    Apple saw the trouble of relying on 3rd party modems so I see them using these patents to develop their own. Maybe Intel has some really great tech but has no idea how to use it(remember Xerox) unless someone like Apple comes along.

    P.S. We have no idea IF or even how long they've been negotiating. For all we know they could be finalizing a deal after 5 years. This is all speculation.
    edited July 22
  • Reply 15 of 34
    rwesrwes Posts: 171member
    rwes said:
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!
    Apple paid $3 billion for Beats and look at all the positive they were able to spin out of that acquisition.

    $1 billion for Intels modem business (though definitely not any where as mature as Qualcomms) would be a relative steal for apple. Looking at the pace of other aquitions as well, I doubt it would take even 2.5 years, but we are all guessing...
    Comparing the Beats acquisition to Intel's modem business doesn't really work.  Beats brought 2 salable products to the table: headphones and a streaming service.  That's continued revenue and profit.  Intel brings no salable products to the table.  Intel's modem business would be a cost with no tangible ROI.  It's not like Apple will be selling modems to their competitors.  

    The cost of Intel's portfolio is relatively trivial for Apple to absorb.  The value of that portfolio has yet to be determined.  Do they have any SEP's?  SEP's are definitely valuable.  The rest?  Who knows.  There could be some diamonds in the rough.  There could also be a lot of rough and no diamonds.  Remember, Intel had the patent portfolio/modem business and managed to lose a rumored $1B a year with it.  
    Valid points (Beats was already a successfull and profitable business), but what could be saved financially (royalties, etc) were Apple to bring modem business in-house much like they've done for other core components and what could be gained beyond that (tighter better performing integrations...)?

    They won't be selling these modems to their competitors, but how much is Qualcomm charing them or trying to charge them per device; apparently enough to stop Apple from doing business with them for an entire line of iPhone, and try to wage a mini-war with Qualcomm.
  • Reply 16 of 34
    seanismorrisseanismorris Posts: 1,086member
    Apple is forced to become their own supplier, to avoid Qualcomm dropping the soap...

    Apple only likes monopolies when it’s their monopoly...
    h4y3s
  • Reply 17 of 34
    coolfactorcoolfactor Posts: 1,534member
    That may also explain why an ARM Mac is out of question. Licence x86 instead of letting the Mac platform shift entirely to ARM. Just an uneducated guess...

    This has nothing to do with the main processor.

    This has everything to do with a 5G modem. Intel has been trying to develop one, but it's been failing to meet required specifications. It's getting too hot, for example. Qualcomm has solved or managed to avoid these thermal issues with their 5G architecture.


  • Reply 18 of 34
    coolfactorcoolfactor Posts: 1,534member

    Apple is forced to become their own supplier, to avoid Qualcomm dropping the soap...

    Apple only likes monopolies when it’s their monopoly...

    Monopolization is not a motivation for Apple. Delivering the best products and user experience sometimes requires breaking from the industry standards and "rolling your own". If a monopoly is created as a result, simply because of high adoption rate, that's just a side-effect, not a main driver. Let's keep that straight, eh?


    AppleExposedmwhitepscooter63
  • Reply 19 of 34
    tundraboytundraboy Posts: 1,623member
    HeliBum said:
    Will not be cheap for Apple! May cost Apple up to $1 million dollars to get Intels division! Ouch! Maybe with the right negotiation strategy talk Intel down to $800,000 and cash deal! We will see! Negotiations could take up to 5 years too!


    That's $1 billion, which is practically petty cash for a company with as much cash as Apple.

    I say you guys won't recognize irony if it walked right up to you and punched you in the mouth.

    The point is Intel's modem division is practically worthless to anyone else on the planet so Apple can drive a hard bargain if they choose to.  It's only the desire to maintain good relations with their X86 supplier that would stop Apple from being a total shark on this negotiation.  Because really for Intel it's basically what Apple wants to pay or $0 for their 5G business.
    edited July 22 bigpics
  • Reply 20 of 34
    tundraboytundraboy Posts: 1,623member

    Apple is forced to become their own supplier, to avoid Qualcomm dropping the soap...

    Apple only likes monopolies when it’s their monopoly...
    Really?  In what major product category does Apple have a monopoly?  Laptops?  Desktops?  Smart phones? Smart watches? Tablets? Operating systems?  Music streaming?  Bluetooth earphones?  Smart speakers?  What?

    The only monopoly Apple has is its 'monopoly' on Apple-branded products.  Just like Toyota has a 'monopoly' on Toyota vehicles, those bastards.  And GM 'monopolizes' the Corvette market, those SOBs.

    Sheesh.  Sometimes an overwhelming desire to say something snarky causes a person's brain to shut down.  Don't fret, it happens to me too.
    edited July 22 mattinozAppleExposedmwhiteneil andersonpscooter63anantksundaram
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