Apple wants to start shipping its own 5G modems as soon as 2021, according to a new report.
The news comes after Apple confirmed it is splashing $1 billion to acquire the majority of Intel’s modem chip business. But we won’t see the back of Qualcomm for some time.
Apple’s deal with Intel is the second-largest acquisition in its history, beaten only by the $3 billion it spent in 2014 to acquire Beats. And it means big things for future Apple products.
As part of the deal, Apple will pick up thousands of additional wireless technology patents and approximately 2,200 Intel employees who will work on 5G modems for Apple devices.
But despite all that manpower and expertise, it will be a couple of years before we start to see new devices with Apple modem chips.
Apple plans to initiate modem takeover in 2021
Reuters, citing a source familiar with the matter, reports that Apple wants to start shipping its first 5G modem in some products by 2021. Its complete takeover will happen slowly.
Apple already has a deal in place with Qualcomm, which will supply its modem chips through 2020. And it’s highly likely the relationship will continue beyond that.
“Apple is likely to continue to use the San Diego firm’s chips in its flagship models even if it phases in its own silicon for lower-end and older models,” the source said.
Apple will pay less for licensing
Even without using its own chips in every device, Apple will still benefit significantly from the huge patent portfolio it has acquired. It gives Apple the power to negotiate better licensing fees.
“I don’t think Intel has quite the portfolio that Qualcomm has, but they certainly have a large enough one to impact the valuations when it comes to a cross-licensing deal,” said patent attorney Erick Robinson. “It’ll save [Apple] a huge chunk of change.”
