Marcio Jose Sanchez/AP
- Apple is acquiring the majority of Intel’s smartphone modem business in a deal valued at $1 billion.
- Apple will have access to more than 17,000 patents and will gain 2,200 employees from Intel as part of the deal, which is expected to close in the fourth quarter of 2019.
- The news comes after Intel announced that it would be exiting the 5G smartphone modem business in April.
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Apple has struck an agreement to purchase the majority of Intel’s smartphone modem business in a deal valued at $1 billion, the iPhone maker announced on Thursday.
The deal, which is expected to close in the fourth quarter of this year pending regulatory approval, will give Apple access to more than 17,000 patents covering wireless technologies like modem architecture, cellular standards, and modem operation. Intel will still be able to develop modems for non-smartphone products, like PCs and smart home devices. About 2,200 Intel employees will be joining Apple.
The announcement comes after The Wall Street Journal previously reported that Apple was in talks to acquire Intel’s smartphone modem business. Intel also announced in April that it was exiting the 5G modem business and would instead focus its resources on building 5G infrastructure.
At the time, Intel CEO Bob Swan said "it has become apparent that there is no clear path to profitability and positive returns" regarding the firm’s decision to drop out of the 5G smartphone race.
In Apple’s press release, Johny Srouji, the company’s senior vice president of hardware technologies, said that the deal will "expedite our development on future products and allow Apple to further differentiate moving forward."
Apple does not typically share details about its future products until it’s ready to announce them. But the company is widely expected to release its first 5G iPhone in 2020, according to predictions from TF International Securities analyst Ming-Chi Kuo and reports from Bloomberg. The newly announced acquisition will give Apple easier access and tighter control over what would be a key part of its future iPhones.
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