Apple is acquiring most of Intel’s smartphone modem business after entering into a deal valued at roughly $1 billion, which will include Intel IP, equipment, leases and employees. Apple will bring over 2,200 new roles into play and increase its portfolio with 17,000 wireless technology patents.
“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,” Apple SVP Johny Srouji said. “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.”
This new deal confirms previous rumors that Apple would acquire the business in order to permanently uncouple itself from Qualcomm, where much contention between the two has taken place over the last several years. However, Apple and Qualcomm resolved their issues in April, while both parties agreed to drop litigation.
The move could also be influenced by Apple’s recent push to build all of its device components in-house. CEO Tim Cook signaled the way forward for the company a decade ago, when he told the press, “We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution.”
The deal was also believed to be an attempt for Apple to prepare its iPhone for 5G, which is expected in 2020. Intel’s 5G solution has been said to be inferior of the two, as the company missed out on the last decade’s smartphone boom. Intel can still develop modem technology under the deal with Apple for non-smartphone devices, including PCs, IoT hardware and self-driving vehicles.
“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,” Intel CEO Bob Swan said in the statement. “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.”
Apple expects the deal to be finalized in Q4, once subjected to the standard regulatory scrutiny.