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Intel Cites Apple-Qualcomm Settlement as Reason Behind Exiting 5G Smartphone Modem Business

Last week's surprise Apple and Qualcomm settlement and multiyear chipset supply agreement was the driving force behind Intel exiting the 5G smartphone modem business, according to Intel CEO Bob Swan.

Intel 5G Modem
"In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn't see a path," Swan said in an interview with The Wall Street Journal, as noted by The Verge.

Swan's comment suggests that Intel was surprised by the Apple-Qualcomm settlement and acted reactively when it announced its exit from the 5G smartphone modem business just hours later, but multiple reports indicate that Intel was unable to meet Apple's demands for 5G modems in 2020 iPhones.

It's hard to imagine that Apple and Qualcomm would have suddenly settled their bitter legal battle if Intel was able to supply 5G modems for 2020 iPhones, but Intel was reportedly struggling with its 5G modem development, possibly leaving Apple with little to no choice but to settle with Qualcomm.

iPhones have a long development cycle, so it was likely crunch time for Apple to choose a 5G modem supplier for its 2020 iPhones. Given this long lead time, Intel is still expected to supply LTE modems for 2019 iPhones.



Top Rated Comments

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21 weeks ago
For the record, I'd just like to cite rain as a possible reason behind the ground sometimes being wet, but I'm very eager to hear more from Intel on this Apple-Qualcomm matter.



Rating: 13 Votes
21 weeks ago
The way this has been playing out is very interesting. Sounds like there was some sort of back room cartel like deal that Intel and Apple were working out in order to prop up Intel's modem business and technology. Without Apple, Intel either has no actual business with their 5g modems, and can't technologically keep up.

based on everything so far, this is how I feel like it was being played.


Apple goes after Qualcomm in hope to publicly diminish Qualcomm's value and market cap.

Crippling Qualcomm's public image and driving down the market cap makes Qualcomm ripe for hostile take-over. It was believed that Broadcom was a top candidate to purchase Qualcomm at that time. Broadcom seems historically far more likely to make Apple favoured deals.

Something changed, and the valuation didn't continue to drop like Apple wanted. Instead, Qualcomm was poised to win a large portion of the lawsuits, to the point where Apple themselves were threatened to losing ability to sell their iphone 6 through X in major markets. qualcomm's stock rebounds and no outside takeover possible.

Qualcom Wins the major sticking point between the two. Apple realized that they are now in a losing position, and settle with Qualcomm out of court. Judging from the rumours and information in the settlement, Apple got a worse deal than they originally even had.

During all this, there were rumours, and Qualcomm complained that Apple was demanding source code. Qualcomm believed that providing it to Apple, Apple was feeding details and technology from that code to Intel. This sounds like Apple was setting up a fall back plan should the original plan to drive Qualcomm value down. The backup plan being, Get Intel technology so that their modems could compete. Thus, if qualcomm deal falls through, They could rely on Intel's favourable pricing. Intel likely didn't have much other business in 5g modems, and relied on Apple feeding them tech from Qualcomm to continue their development work, in addition, without any other major purchasers, there was just no business sense to keep making Intel modems.


it's a really interesting story, and I honestly didn't expect the outcome we had.
Rating: 9 Votes
21 weeks ago

For the record, I'd just like to cite rain as a possible reason behind the ground sometimes being wet.

It doesn't feel normal to read your post without a gif.
Rating: 7 Votes
21 weeks ago
Talk about circular logic - the only reason Apple settled with Qualcomm was because Intel couldn't deliver a working 5G chipset within a reasonable amount of time.
Rating: 7 Votes
21 weeks ago
Makes total sense.

Intel expected a large order from Apple, and that order is now going to Qualcomm. That order would probably have been big enough to justify development cost to Intel. Now it's not.

This isn't anything shocking. The only shocking thing is how FAST they announced it right after the settlement.


That was prepared. The possible outcomes were: Apple wins and buys Intel chips. Apple wins and buys Qualcomm chips. Qualcomm wins and Apple buys Intel chips. Qualcomm wins and Apple buys Qualcomm chips. They settle and Apple buys Intel chips. They settle and Apple buys Qualcomm chips.

Intel had six press releases ready :-)
Rating: 7 Votes
21 weeks ago

Oh, so NO FACTS at all, just some made-up numbers from some analyst.

I'm still waiting....


Meanwhile, you're conveniently forgetting Qualcomm has lost EVERY SINGLE antitrust case brought against them over modem licensing issues and has paid $4 billion in fines so far. And the FTC case still has to be decided (which should be fairly soon).

Must be nice to ignore FACTS like these and pretend they don't have any bearing at all on a case that was all about Qualcomm's illegal (illegal as they've been found guilt 5 times already) licensing model.


Yeah, I'll take an analyst's estimates who studies the industry and talks with its executives and suppliers over some random internet poster who's grasping at straws because he doesn't want look wrong in public. Have a nice day :)
Rating: 5 Votes
21 weeks ago
In reality, Intel decided months ago they would exit the 5G smartphone business. Intel was behind schedule and Bob Swan knew high margin x86 processors were a better use of the fabs.

Look back at MWC2019, the most important event for the mobile industry. What did Intel show? Processors designed to accelerate 5G network traffic. They didn’t mention or demo anything related to 5G smartphones.

Apple obviously knew about Intel’s situation and went back to settle with Qualcomm. Keep in mind it was Apple that wanted to change Qualcomm’s entire business model and cut them down to size.
Rating: 4 Votes
21 weeks ago

The way this has been playing out is very interesting. Sounds like there was some sort of back room cartel like deal that Intel and Apple were working out in order to prop up Intel's modem business and technology. Without Apple, Intel either has no actual business with their 5g modems, and can't technologically keep up.

based on everything so far, this is how I feel like it was being played.


Apple goes after Qualcomm in hope to publicly diminish Qualcomm's value and market cap.

Crippling Qualcomm's public image and driving down the market cap makes Qualcomm ripe for hostile take-over. It was believed that Broadcom was a top candidate to purchase Qualcomm at that time. Broadcom seems historically far more likely to make Apple favoured deals.

Something changed, and the valuation didn't continue to drop like Apple wanted. Instead, Qualcomm was poised to win a large portion of the lawsuits, to the point where Apple themselves were threatened to losing ability to sell their iphone 6 through X in major markets. qualcomm's stock rebounds and no outside takeover possible.

Qualcom Wins the major sticking point between the two. Apple realized that they are now in a losing position, and settle with Qualcomm out of court. Judging from the rumours and information in the settlement, Apple got a worse deal than they originally even had.

During all this, there were rumours, and Qualcomm complained that Apple was demanding source code. Qualcomm believed that providing it to Apple, Apple was feeding details and technology from that code to Intel. This sounds like Apple was setting up a fall back plan should the original plan to drive Qualcomm value down. The backup plan being, Get Intel technology so that their modems could compete. Thus, if qualcomm deal falls through, They could rely on Intel's favourable pricing. Intel likely didn't have much other business in 5g modems, and relied on Apple feeding them tech from Qualcomm to continue their development work, in addition, without any other major purchasers, there was just no business sense to keep making Intel modems.


it's a really interesting story, and I honestly didn't expect the outcome we had.


Apple went on a multi-year smear campaign against Qualcomm and Qualcomm had the internal memos/emal through discovery. They used that as part of the opening statements last week. IMHO

The settlement came not because Qualcomm caved as people surmised but because Apple got caught flapping in the wind. IMHO
They had no choice but settle or have really dirty laundry aired. IMHO
Rating: 4 Votes
21 weeks ago

Everyone saw it coming, except Intel.


I have a different interpretation. I think Intel and Apple knew for awhile that Intel was not going to be able to get Apple the chips they needed, but they had to stay secret about this, so Apple could use Intel as leverage to negotiate with Qualcomm. That's why the instant the settlement was finalized, Intel could announce they were done. I think it might have been Qualcomm who was surprised by Intel's announcement - they suddenly realized they could have dragged Apple over a barrel. :)
Rating: 4 Votes
21 weeks ago

Nothing circular about it.

As soon as intel found out about the settlement they ended their 5g development for the iPhone, not the other way round.


The settlement wouldn't have occurred if Intel was able to design a 5G chipset, ergo the real reason Intel dropped its 5G chip development is because they couldn't successfully develop a 5G chipset, not because Apple settled with Qualcomm.
Rating: 3 Votes

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