Intel announced late Tuesday it’s pulling out of designing its own 5G modems and is also planning a reassessment of the market for 5G and 4G equipment in PCs and IoT devices.
The modems weren’t expected until 2020.
“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property,” said Intel CEO Bob Swan in a Tuesday release. “We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”
The release said that Intel is still investing in 5G network infrastructure, as well as keeping its current commitments to 4G equipment manufacturers. Intel plans to make more details known during its Q1 earnings call scheduled for April 25.
One thing was made obvious by the silicon giant: “[I]n the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” read Swan’s statement.
This move was likely a result of the recent unexpected truce between Apple and chip-maker Qualcomm. The two companies were in the midst of multiple legal battles about smartphone modem patents and royalties. It was announced earlier on Tuesday that the tech companies settled all their ongoing legal matters. The Cupertino tech giant also signed a six-year licensing deal and a multi-year chipset supply agreement with the chip-maker. There is also a two-year option to extend this deal, according to Qualcomm.
Until the end of the litigation, it was anticipated that Intel would supply Apple with components for its 5G iPhone slated for 2021.