Apple buys Intel modem business in $1B deal

Posted:
in iCloud edited July 26
Apple has signed a deal to acquire the majority of Intel's cellular modem patents, intellectual property and key personnel in a deal valued at $1 billion, furthering the tech giant's plans to take ownership of iPhone's communications stack.

Intel sign


As part of the deal, Apple will get over 17,000 wireless technology patents. The portfolio spans cellular standards, modem architecture, modem operation, and chip engineering.

"This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created," said Intel CEO Bob Swan. "We have long respected Apple and we're confident they provide the right environment for this talented team and these important assets moving forward. We're looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers."

Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles.

"We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies. "Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they'll thrive in Apple's creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward."

The transaction is expected to conclude before the end of 2019.

Apple, Intel, and Qualcomm

After a period with the iPhone using Infineon modems, Qualcomm was the sole supplier of iPhone modems for Apple up until the iPhone 7. With the release of the iPhone 7, Intel became one of two suppliers for the iPhone modem, alongside Qualcomm. Supplies were split along carrier lines between the two sources through the iPhone 8 and iPhone X releases in 2017.

For the 2018 iPhone releases, the iPhone XS, iPhone XS Max, and iPhone XR did not include Qualcomm modems at all. For Intel, this meant it was providing all of the modems destined for use in all three models for that year.

Intel and Apple have been in negotiations for the patent portfolio for some time. The negotiations were interrupted 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.

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 and will nearly certainly use them in the predicted 2020 5G iPhone.
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Comments

  • Reply 1 of 62
    elijahgelijahg Posts: 989member
    Seems like a good move to me. Both reduced dependence on Qualcomm, and increased competition.
    JWSCn2itivguycornchipmacplusplusyojimbo007DAalsethjbdragonlostkiwiBart Ywatto_cobra
  • Reply 2 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    cornchipBart Ywatto_cobra
  • Reply 3 of 62
    marsorrymarsorry Posts: 45member
    Well, it’s about time! Qualcomm must be seeing the beginning of the end. On the hook to supply Apple with awesome tech as they watch the end of their relationship from the front row!
    cornchipjbdragonlostkiwiolsBart Ywatto_cobrajony0
  • Reply 4 of 62
    fastasleepfastasleep Posts: 3,104member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    What do you mean? From the first sentence: “furthering the tech giant's plans to take ownership of iPhone's communications stack.“
    AppleExposedjbdragonwatto_cobra
  • Reply 5 of 62
    avon b7avon b7 Posts: 4,066member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Being more in control, knowing what you can do (in real-time), how much it will cost to develop etc, are all plusses. Eventually getting the modem onto the SoC and into IoT (everywhere) will only bring more advantages.
    n2itivguyjbdragonmuthuk_vanalingam
  • Reply 6 of 62
    macplusplusmacplusplus Posts: 1,888member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Why? Because Apple won’t ditch Intel, for example to switch to ARM  >:) (Re: Why Apple's Macs can now ditch Intel x86 and shift to ARM https://appleinsider.com/articles/19/07/24/why-apples-macs-can-now-ditch-intel-x86)

    "We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies.
    edited July 25 watto_cobra
  • Reply 7 of 62
    melgrossmelgross Posts: 31,801member
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    cornchipmuthuk_vanalingamdavgregjony0
  • Reply 8 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    What do you mean? From the first sentence: “furthering the tech giant's plans to take ownership of iPhone's communications stack.“
    Which is as vague as when Apple bought Primesense and Authentic.

    Yeah motion detection and fingerprint sensing but Apple goes above and beyond their acquisitions wildest possibilities. We never imagined ApplePay, Sign in with Apple and Animoji. Don't think Apple will be on stage and just say "By the way, we make our own modems now" and move on to the next announcement.

    My mind can only comprehend some possibilities for now:
    The worlds fastest 5G system on chip in the world. May even be in it's own class and chip.

    avon b7 said:
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Being more in control, knowing what you can do (in real-time), how much it will cost to develop etc, are all plusses. Eventually getting the modem onto the SoC and into IoT (everywhere) will only bring more advantages.

    Pretty standard stuff but I think Apple can have the worlds fastest wireless communications network planted into all their products. A chip in all new devices that allows you to pay a monthly fee to have all your iCloud devices connected online. iPads, Airpods, Homepod, Glasses, Watch.

    "knowing what you can do (in real-time)"

    BINGO!! This is exactly what I was talking about. This will certainly give Apple more control of what's possible. Apple will not just buy these patents, toss a 5G chip on iPhone and call it a day. Intels tech is lacking after all but Apple thinks it's worth 1B for reasons we don't understand yet.
    n2itivguyBart Ywatto_cobra
  • Reply 9 of 62
    macplusplusmacplusplus Posts: 1,888member
    melgross said:
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    I think the reason to keep engineers is more preventing them from losing a job than keeping them as assets. Under the job guarantee Apple offers they may choose whatever carrier path they want.
    Bart Ywatto_cobra
  • Reply 10 of 62
    rob53rob53 Posts: 2,074member
    How does this affect the Qualcomm settlement? How much product is Apple required to purchase from Qualcomm to satisfy the settlement? I have to wonder which patent trolls will now go after Apple when they might not have bothered to go after Intel. Now that Apple has the ability to include modems in their computers without dealing with Intel, they can (probably) go ahead and add Apple modems to iOS devices, further reducing the number of high cost components. This would also mean they could dump Intel's CPU chips in laptops and desktops without having to worry about retribution from Intel (modem cost being jacked up).
    cornchipwatto_cobra
  • Reply 11 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Why? Because Apple won’t ditch Intel, for example to switch to ARM  >:) (Re: Why Apple's Macs can now ditch Intel x86 and shift to ARM)

    "We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies.

    Intels modem business was failing and far behind. This is why I said I don't understand YET.

    Apple never buys a dying business they don't think they can innovate. Remember Primesense? They were dead and nobody wanted anything to do with them. Heck Xbox sales were tanking because Microsoft was bundling Kinect with their Xbox! So Microsoft dropped the bundle to save sales lol. Yet Apple bought them....

    Intels CPU chips are also slowly falling behind. Which makes me wonder if Apple is ready to acquire that business too.
    watto_cobra
  • Reply 12 of 62
    maestro64maestro64 Posts: 4,642member
    Just think what Apple did with the A-processors and how no other processors comes close since Apple only has to design for their application verses making something that has to work in lots of different applications. They will design modems which work really well in an iPhone. 

    In few years we will see Apple cellular performance better than competitors as they evolve the design and integrate modern into their SOC.
    AppleExposedcornchipmwhitewatto_cobra
  • Reply 13 of 62
    macplusplusmacplusplus Posts: 1,888member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Why? Because Apple won’t ditch Intel, for example to switch to ARM  >:) (Re: Why Apple's Macs can now ditch Intel x86 and shift to ARM)

    "We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies.

    Intels modem business was failing and far behind. This is why I said I don't understand YET.

    Apple never buys a dying business they don't think they can innovate. Remember Primesense? They were dead and nobody wanted anything to do with them. Heck Xbox sales were tanking because Microsoft was bundling Kinect with their Xbox! So Microsoft dropped the bundle to save sales lol. Yet Apple bought them....

    Intels CPU chips are also slowly falling behind. Which makes me wonder if Apple is ready to acquire that business too.
    Why not?

    The keyword here is... patent.
    edited July 25 watto_cobra
  • Reply 14 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    rob53 said:
    How does this affect the Qualcomm settlement? How much product is Apple required to purchase from Qualcomm to satisfy the settlement? I have to wonder which patent trolls will now go after Apple when they might not have bothered to go after Intel. 

    I tried to express this point in the other but you said it better.

    Really what are patents worth but a metaphorical bag of insults in court? Anyone can copy your patents and still beat you in court. Although Qualcomm is shi*ing their pants right now.

    But it seems this package also comes with engineers and cooperation.

    "We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users,"

    Seems like Apple saw something good happening at Intel but Intel was lost(remember Xerox?). I can imagine the gist of the deal was something like:

    Intel: We're really struggling to make a profit here. We have no idea what to do and we're losing a billion a year.
    Apple: Will you sell your business? I have some ideas.
    Intel: Let's do this!
    cornchipwatto_cobra
  • Reply 15 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    I bet this is good.

    I just don't understand why YET.

    All will be known soon fellas!!
    Why? Because Apple won’t ditch Intel, for example to switch to ARM  >:) (Re: Why Apple's Macs can now ditch Intel x86 and shift to ARM)

    "We've worked with Intel for many years and know this team shares Apple's passion for designing technologies that deliver the world's best experiences for our users," said Johny Srouji, Apple's senior vice president of Hardware Technologies.

    Intels modem business was failing and far behind. This is why I said I don't understand YET.

    Apple never buys a dying business they don't think they can innovate. Remember Primesense? They were dead and nobody wanted anything to do with them. Heck Xbox sales were tanking because Microsoft was bundling Kinect with their Xbox! So Microsoft dropped the bundle to save sales lol. Yet Apple bought them....

    Intels CPU chips are also slowly falling behind. Which makes me wonder if Apple is ready to acquire that business too.
    Why not?

    The keyword here is... patent.

    No the keyword here is...patient.  ;) 

    With time and patience Apple will do good things with these modem patents in the future. If Intel's CPU business starts to sink so will their value. Allowing Apple to come in and swoop the rest on a discount and do even greater things with their patents.
    watto_cobra
  • Reply 16 of 62
    SpamSandwichSpamSandwich Posts: 31,319member
    melgross said:
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    I think the IP is the main reason for the purchase here. Apple can afford to hire whichever individual engineers they need.
    cornchipBart Ywatto_cobra
  • Reply 17 of 62
    THIS is the deal of 2019 in my opinion and I’m glad it finally happened. 
    AppleExposedlostkiwiBart Ywatto_cobra
  • Reply 18 of 62
    melgrossmelgross Posts: 31,801member
    melgross said:
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    I think the reason to keep engineers is more preventing them from losing a job than keeping them as assets. Under the job guarantee Apple offers they may choose whatever carrier path they want.
    We’ve seen, with other Apple acquisitions, that managers and engineers, both software and hardware, have left after a few months, sometimes sooner. Good engineers can get Jobs. These people, in telecommunications, are in high demand. Apple will have to convince them to stay.
    lostkiwiwatto_cobra
  • Reply 19 of 62
    melgrossmelgross Posts: 31,801member

    melgross said:
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    I think the IP is the main reason for the purchase here. Apple can afford to hire whichever individual engineers they need.
    There’s such a thing as continuity. If key people leave, then everything will slow down to a crawl. it isn’t about hiring new engineers, it’s about having these engineers. If Apple just wanted the IP, it’s very likely that that’s what they would have negotiated for.
    edited July 25 cornchipwatto_cobra
  • Reply 20 of 62
    AppleExposedAppleExposed Posts: 1,395unconfirmed, member
    melgross said:
    melgross said:
    It’s difficult to keep engineers from acquisitions. Many may stay, and many may leave.
    I think the reason to keep engineers is more preventing them from losing a job than keeping them as assets. Under the job guarantee Apple offers they may choose whatever carrier path they want.
    We’ve seen, with other Apple acquisitions, that managers and engineers, both software and hardware, have left after a few months, sometimes sooner. Good engineers can get Jobs. These people, in telecommunications, are in high demand. Apple will have to convince them to stay.

    Some of the new employees don't like Apples directions.

    This deal is very similar to Beats.

    1. It was expensive for an Apple acquisition. 2nd most expensive next to Beats.

    2. Apple seems to have bought them to speed up current plans.

    3. Employees working on a solution ahead of Apple are part of the package.
    edited July 25 watto_cobra
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