Recently, Apple took an important step towards increasing the share of its own chips in smartphones: most of Intel's modem business for $1 billion. Under the agreement, 2200 Intel employees will move to Apple; the latter will also receive intellectual property, hardware, and 17 patents for wireless technologies ranging from cellular standards to modems. Intel retained the right to develop modems for areas other than smartphones, such as PCs, industrial equipment, and self-driving vehicles.
Apple has always relied on third-party modem vendors. Last year, Intel was the sole manufacturer of these components for the iPhone, following a dispute between Apple and Qualcomm over licensing issues. In April, Apple reached a surprise settlement so that new iPhones would once again use Qualcomm modems. Just a few hours after this news, Intel announced that it would leave the smartphone modem business.
Apple tends to acquire much smaller companies or businesses: the deal with Intel was the second largest after buying Beats Electronics for $3,2 billion in 2014. Of course, new employees, developments and patents will allow Apple to create its own 5G modems. Apple's two biggest global competitors, Samsung and Huawei, already have this capability.
Last year, The Information reported on Apple's efforts to develop its own modem, but the Cupertino giant never officially acknowledged it. In February, Reuters reported that Apple had shifted its modem development efforts to the same division that builds the Apple A single-chip systems, signaling the company is stepping up efforts to build its own modems.
The purchase of Intel's assets should help Apple speed up its modem plans. A Reuters source reports that the company plans to use Qualcomm chips in the iPhone family this year to support 5G, but plans to switch to its own chips in a number of products as early as 2021. Intel planned to release a 5G modem in 2020, so using its work should help Apple achieve its goals.
But according to the same source, any Qualcomm replacement will come in stages: Apple is cautious about the issue and wants to ensure that its products will work in all networks and countries where they are sold. These Qualcomm solutions are traditionally strong, so Apple may still have to leave the competitor's modems in a number of their devices. “Apple really wants to leave addiction in the past, but it also understands that it must be done responsibly,” the insider said.
Another industry veteran told reporters that Apple's licensing agreement with Qualcomm will last another six years, and the accompanying chip supply agreement may also remain valid during this period. In his opinion, Apple will continue to use Qualcomm chips in its flagship models, and in cheaper and older ones, it will switch to its own solutions.
Apple is reportedly working with Taiwan's Global Unichip, which is backed by TSMC, to develop modems, but work is still in its early stages. This, obviously, was the reason for the agreement with Qualcomm and also prompted Apple to acquire the Intel business.
Patents may be Apple's most valuable resource in the Intel deal. To sell the 5G iPhone, the company needs to enter into agreements with major 5G patent holders, including Nokia, Ericsson, Huawei, and Qualcomm. Patent lawyer Erick Robinson, formerly of Qualcomm's Asian licensing division, said patents could give Apple a big bargaining chip in licensing negotiations: "I don't think Intel's wireless patent portfolio is comparable to Qualcomm, but it certainly is. , large enough to affect the cost of cross-licensing."
Source: 3dnews.ru