Apple may buy Intel’s smartphone modem business for $1 billion

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After Intel’s announcement earlier this year that it would be exiting the 5G smartphone modem business, a new rumor claims that Apple is planning to purchase Intel’s modem business.

Apple is said to be in “advanced talks” to purchase Intel’s modem business in a deal that’s valued at more than $1 billion. Sources speaking to the Wall Street Journal say that an agreement between Apple and Intel could be reached as soon as next week.

The deal between Apple and Intel would include patents and staff.

While nothing is official until it’s announced by Apple and Intel, this rumored deal could make sense for both companies. Apple is very invested in the smartphone market, and with carriers beginning their 5G deployments this year, the Cupertino company has likely begun plans on building a 5G iPhone at some point. 

Meanwhile, Intel recently said that it was exiting the 5G smartphone modem business after originally planning to begin production in 2020. ““We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” Intel CEO Bob Swan said earlier this year.

And then there’s Qualcomm. Apple and Qualcomm had been involved in legal battles around the world, but back in April the two companies announced that they’d agreed to drop all litigation. The agreement included a six-year license agreement and Apple paying royalties to Qualcomm as well as a multi-year chipset deal.

If Apple buys Intel’s smartphone modem business, it could develop its own 5G smartphone modems and eventually just use those in its phones rather than rely on Qualcomm or some other company for modems. It’s well known that Apple likes to keep as much of its smartphone business in house, developing its own processors for iPhones, being responsible for all of the manufacturing of iPhones, and so on. It wouldn’t be a surprise if Apple also wanted to build its own smartphone modems, too, and this purchase of Intel’s modem business would give Apple a significant boost in that process.

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