Apple (NASDAQ:AAPL) may have lost the 5G battle to Qualcomm (NASDAQ:QCOM), but the computer behemoth says it’s now in a position to win the war.
Apple said Thursday that it will buy Intel’s (NASDAQ:INTC) smartphone modem business, which includes several patents and about 2,000 Intel employees, for $1 billion. It’s no secret Apple has been interested in developing its own modems for the iPhone, and buying up all that Intel IP puts it in a position to have one ready by the time its deal with Qualcomm runs out.
Apple settled with Qualcomm and laid the groundwork for a long-term plan to develop its own modems. Meanwhile, Intel was forced to back out of its 5G modem plans once Apple and Qualcomm signed their deal, and its assets were relatively cheap and attractive for Apple to scoop up and get a head start on its own chips.
Under the settlement, Apple agreed to use Qualcomm modems for the next six years, with an option to extend the relationship another two.
That gives Apple up to eight years to perfect the smartphone modems Intel was struggling with and get them up to par with Qualcomm’s technology.
Even though industry analysts say Intel had a history of building modems that didn’t perform as well as Qualcomm’s, Apple now has plenty of time to improve the technology before the clock runs out.
Apple shares gained $1.26 to $208.28, while Qualcomm demurred 26 cents to $75.09, and Intel acquired 61 cents, or 1.2%, to $52.77
Tech Insider
