Apple announced on Thursday that it has signed an agreement to acquire the majority of Intel’s smartphone modem business. The deal is worth $1 billion and is expected to close in the fourth quarter of this year. Included in the buyout are 2,200 Intel employees joining Apple, patents and other IP, equipment and leases.
Here’s a comment from Intel’s CEO on the deal:
“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.”
And from Apple’s SVP of Hardware Technologies:
“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.”
Rumors of Apple’s interest in Intel’s smartphone modem business have been persistent since the company’s very public fallout with chip-maker Qualcomm. The two sides have since buried the hatchet, signing a 6-year licensing agreement, but today’s news reiterates that they’d prefer to move the modem-making in-house.
Obviously this deal will require regulatory approval, but should it pass, Apple will hold over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and operation. Intel will retain the ability to develop modems for non-smartphone products such as PCs, IoT devices and cars.