Apple might drop $1 billion on Intel’s modem biz

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This Intel modem will likely power the first 5G iPhone.
One of Intel's first 5G modems.
Photo: Intel

Apple could soon become the new owner of Intel’s giant trove of modem-related patents according to a new report on the two sides’ negotiation.

Intel decided to get out of the 5G modem game earlier this year after Apple struck a deal to use Qualcomm’s modems for the next couple of years. It appears that Intel’s loss could be a big win for Apple’s own efforts to become less dependent on third-parties for iPhone chips.

The Wall Street Journal reports that Apple is in advanced talks to buy Intel’s smartphone-modem chip business. A deal may supposedly be reached by as soon as next week that would give Apple a portfolio of patents valued around $1 billion.

Apple and Intel have been engaged in talks off and on for about a year now. Acquisition talks cooled when Apple announced its deal with Qualcomm but then started back up again shortly after.

Intel’s modem division has been operating at a loss for years. Former CEO Brian Krzanich pushed the company to make 5G modems to create a new large revenue stream but the company hasn’t had as much success as it has had with computer CPUs. Once Bob Swan was named CEO earlier this year it became more important for Intel to sell its modem business in order to renew focus on what Intel does best.

The iPhone has used Intel modems since the release of the iPhone 7. There was some controversy with that chip though as it was found to be slower than the Qualcomm modems that were also used for the iPhone 7. Intel has sought out other buyers for its modem patents but Apple looks to be the most interested party.

Apple is investing heavily in its own 5G modem business over the last few years. The company has a hub in San Diego where it plans to eventually employ at least 1,200 people. An Apple-made 5G modem isn’t expected to be ready to ship for a couple more years though so the Intel patents could give the project a serious boost.