Apple is going to acquire Intel modems for $1 billion — but it’s unlikely to power the first iPhone 5G

Apple is going to acquire Intel modems for $1 billion — but it’s unlikely to power the first iPhone 5G

  • Apple has announced that it will officially be acquiring Intel’s smartphone modem businesses for $1 billion.
  • But it's unlikely that homegrown Apple modems will equip the iPhone 11 since the deal will only close by the fourth quarter of 2019.
  • The deal is a milestone for the company nonetheless since it marks the beginning of Apple attempting to assert end-to-end control of its devices.
Apple just announced that its officially acquiring Intel’s smartphone modem making operations for $1 billion, but you won’t see the homegrown modems on iPhones anytime soon.

Apple and Intel have signed an agreement for Apple to acquire the majority of Intel’s smartphone modem business. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases.

Apple’s statement

The deal between Apple and Intel won’t officially close until the last quarter of 2019 leaving the company with less than a year to develop the modem and get it ready for the 2020 iPhone 5G.

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The transaction, valued at $1 billion, is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions, including works council and other relevant consultations in certain jurisdictions.

Apple’s statement

Qualcomm, on the other hand, already has a 5G modem system that’s powering the Samsung Galaxy S10 5G and Apple still has a six year contract with the chipset maker — despite the bad blood between the two.

So, even though the 2020 iPhone might not have Apple’s homegrown 5G chipsets, it likely that Apple will still launch a 5G iPhone next year.

Why Intel?

Apple latest devices — the iPhone XS, iPhone XS Max and iPhone XR — are all powered by Intel’s 4G LTE modems. Even the upcoming iPhone 11 will likely sport the same chipset.

Intel was looking to exit to the 5G smartphone modem businesses as soon as possible unable to turn a profit, according to Tom’s Hardware and Apple was looking to build modems for 5G-enabled iPhones in-house — partly because Apple and Qualcomm were continuously suing each other.

“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.

Even though it’s unlikely that the 5G modems will be featured in the iPhone 11 or even the first iPhone 5G, it does mark the beginning of Apple’s attempt to assert end-to-end control of its devices.

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