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Apple was Interested in Buying Intel’s Smartphone Modem Business

A new report in the Wall Street Journal sheds light on Apple and their interest in potentially buying the Intel smartphone modem business. The article indicates that Apple was interested in an effort to speed up their own modem building efforts but shut down shortly before the settlement with Qualcomm. That settlement led to a six-year deal between Apple and Qualcomm for the Cupertino company to user the San Diego chip maker’s modems.

Shortly after the announced settlement, Intel announced they were pulling out of the smartphone modem business.

According to the report, Apple and Intel began discussions about at least a partial acquisition of the smartphone modem division last summer. Those talks continued up until a few weeks ago, just before the settlement with Qualcomm. Sources in the article claim that Intel is still interested in selling the division, which reportedly loses about $1 billion per annum for the company.

The question now is if Apple would still be interested?

For 2019, Apple will continue to use Intel 4G LTE modems in the upcoming iPhone, just as they did in the 2018 lineup. For 2020 however, with the agreement with Qualcomm, they will move to that modem which is expected to be a 5G model. The 5G modems, from an Intel perspective, were a hot topic – literally. Rumors throughout much of the last half of 2018 suggested that Intel was having trouble with heat sink on their 5G modem prototypes and that Apple wasn’t happy with the progress the company was making. That, in part, could have been why they ended up settling with Qualcomm. They simply couldn’t risk not having a 5G modem ready in 2020.

Apple however has gone to great lengths on their chipsets in the iPhone and iPad. The A-series of SoCs are designed by Apple and built by TSMC. For modems, it is widely reported that Apple wants to build their own and are doing a lot of hiring to make that happen. That likely won’t happen for 2020, but could in 2021 or 2022.

Put another way, with the deal with Qualcomm, they have six years to figure out how to make their own modems.

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