Apple and Intel have today jointly announced that Cupertino-based Apple will be acquiring the majority of Intel’s smartphone modem business for a sum of $1 billion. The transaction is expected to close toward the end of the year.
As a part of this deal, around 2,200 Intel employees will join Apple, and Apple will acquire IP and equipment from Intel as well. This acquisition will now allow Apple to produce its own 5G modems for its smartphones.
Apple will no longer have to rely on Qualcomm for the hardware. This deal was being expected when Apple recently resolved its long-running dispute with Qualcomm. Within hours of the announcement of a settlement between Apple and Qualcomm, Intel announced that it would be exiting the 5G phone business.
When Apple and Qualcomm were into a legal battle, Intel had positioned itself as the sole source of iPhone modem chips. When Apple reached a surprise settlement with Qualcomm in April this year, Intel had to quit the business.
However, Intel won’t be getting out of the modem business entirely. The company will still be able to develop modems for PCs, Internet of Things devices, autonomous vehicles, and almost anything that’s not a smartphone modem. Intel CEO Bob Swan said the acquisition will allow the company to focus on developing other 5G technologies.