Intel is quitting the 5G smartphone modem business: 'There is no clear path to profitability and positive returns'

Intel; Shayanne Gal/Business Insider

Intel CEO Bob Swan

Chipmaker Intel said on Tuesday that it is exiting the 5G modem business, effectively ceding the market for smartphones on the eve of what's expected to be the biggest wireless market technology transition in years.

The company said it will focus its 5G wireless efforts on network infrastructure. But, when it comes to the smartphone modem business, CEO Bob Swan said in a statement, "it has become apparent that there is no clear path to profitability and positive returns."

Shares of Intel was up as high as 4% in after hours trading following the announcement.

The news came on the same day that iPhone maker Apple and Qualcomm settled litigation involving 5G modems.

Apple had previously selected Intel to supply the modem chips for its future 5G smartphones. But Intel said in its announcement on Tuesday that it "does not expect to launch 5G modem products in the smartphone space."

Get the latest Intel stock price here.