Apple has purchased the majority of Intel’s smartphone modem business for $1 billion USD (roughly $1.3 billion CAD). This announcement follows the chipmaker’s reveal of plans to exit the 5G modem industry.
As a result of this deal, Apple now holds over 17,000 patents. Further, the tech giant is set to take on 2,200 Intel employees following the completion of the deal later this year, as well as other equipment.
“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” said Intel CEO Bob Swan in a press release.
While Intel was once positioned to be the iPhone’s sole 5G modem supplier, Apple recently settled its lengthy legal battle with Qualcomm, resulting in a $4.5 billion USD (approximately $5.9 billion CAD) settlement. Apple settling its dispute with Qualcomm directly led to Intel’s decision to leave the modem business.
Apple and Intel state that the modem deal is expected to close before the fourth quarter of 2019.
“Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward,” said Johny Srouji, Apple’s senior vice president of hardware technologies.
This deal effectively allows Apple to produce its own 5G modems for smartphones rather than relying on Intel as the company’s sole supplier. That said, Apple’s in-house modem development could take three years before it’s ready, according to analysts quoted by Bloomberg.
Reports have also circulated stating that Apple has been working on its own modems for some time now out of the company’s Santa Clara and San Diego offices. Talks regarding Apple acquiring Intel’s modem business reportedly started last summer, according to The Wall Street Journal.
5G network connectivity likely won’t be live in Canada for the general public until 2021 at the earliest.