Why Intel wants out of modem biz (and Apple wants in)

By

Intel CEO Bob Swan
Intel CEO admits there just weren’t enough companies interested in Intel phone modems.
Photo: Intel

Intel CEO Bob Swan says his company decided to bail out off the phone modem business because these products had too few customers to make much money.

Apple is the primary buyer of Intel modems, and the iPhone maker is now reportedly going to acquire Intel’s related patents as it prepares to make its own 5G modems.

Just not enough buyers

“We concluded that in the modem for the smartphone, where we really only had one customer, that the likelihood and the probability that we were going to be able to make money was just not there as we look forward in light of the dynamics of the market,” Swan told Yahoo Finance.

Apple prefers to source components for its products from multiple companies. It got 4G models from both Intel and Qualcomm for years, but switched to just Intel during a protracted series of patent-infringement lawsuits with Qualcomm.

That legal war came to an end this spring, but Intel immediately announced it would stop making modems, and wouldn’t make 5G modems for next year’s iPhone. Unconfirmed reports indicate its modem-related patents are on the auction block, and Apple is the top bidder.

The Cupertino-based company supposedly plans to produce its own 5G modems, reducing its dependence on Qualcomm. It’ll reportedly do so with the help of the former lead developer of Intel’s 5G smartphone tech.