Apple in 'Advanced Talks' to Buy Intel's Smartphone Modem Chip Business
Apple is now in advanced talks to purchase Intel's smartphone modem chip business, reports The Wall Street Journal, citing people familiar with Apple's plans.
A deal that covers a portfolio of patents and staff valued at $1 billion or more could be established as soon as next week if the talks continue.
Apple and Intel have reportedly been in on and off talks for approximately a year. As reported earlier, the talks ended right around the time that Apple and Qualcomm settled their legal disputes and reached a new supply agreement.
Intel sought other buyers and found other interested parties, but discussions with Apple resumed shortly after they ended.
The Apple-Intel discussions began last summer, around the time former Intel Chief Executive Brian Krzanich resigned, people familiar with the matter have said. Mr. Krzanich championed the modem business and touted 5G technology as a big future revenue stream. When Bob Swan was named to that job in January, analysts said the odds of a deal rose because his focus on cleaning up Intel would require addressing the losses in the modem business.
As noted by The Wall Street Journal, purchasing Intel's modem chip business would provide Apple with a leg up on its efforts to develop its own modem chips in house, which would ultimately make the company less reliant on Qualcomm.
Apple has been working on developing its own modem chips since at least 2018, but the technology isn't expected to be ready for use in iPhones and iPads for a few years.
Intel in April announced that it was exiting the 5G smartphone modem business, sharing the news just after Apple and Qualcomm announced their new deal. Since then, Intel has been seeking a buyer for its smartphone modem business.
Apple had been planning to use Intel's 5G chips for its 2020 iPhones, but rumors suggested Intel wasn't able to meet design deadlines, souring the relationship between the two companies. Apple now plans to use Qualcomm's 5G modem chips in its 2020 iPhones and has established a deal for chips for future devices as well.