Stefan Mileschin

Intel's struggling smartphone modem business has finally found a suitor. This afternoon the company announced in conjunction with Apple that the tech company – and one of Intel's most important customers – would be buying the bulk of Intel's smartphone modem business for a cool $1 billion.

Announced via joint press release from Apple and Intel, the two companies have announced that they have signed an agreement for Apple to buy the majority (but not the entirety) of Intel's smartphone modem business. Under the terms of the agreement, Apple will get Intel’s modem IP, related product teams, equipment, and property leases. Importantly, however, the deal only covers smartphone modems; Intel retains some of the critical IP and the option to build modems for non-smartphone uses such as PCs, IoT applications, and autonomous vehicles. This also includes the infrastructure business, where Intel will continue to build 5G solutions for network operations and other large customers.

As per the deal, Apple will pay Intel $1 billion in cash for the smartphone business, and the two companies expect the deal to close in the fourth quarter. For its money, Apple will be picking up around 2,200 Intel employees, as well as Intel’s patents related to smartphone modems (including 2G, 3G, 4G, and 5G modems), with Apple now set to hold over 17,000 wireless technology patents once the deal closes. Among other things, Apple now owns IP related to protocols of cellular networks, modem architecture, and modem operation. In fact, some of the IP that Apple is buying was originally developed by Infineon's wireless division (Apple's original modem supplier) over a decade ago.

The purchase of Intel's smartphone modem IP as well as transfer of employees is a very strong indicator that Apple is planning to develop its own modems going forward. To date, the company has remained one of the last users of discrete modems; virtually every other SoC supplier is integrating modems directly into their designs these days, and it stands to reason that Apple will want to go the same direction. While integrated modems do increase SoC development costs and complexity, ditching the stand-alone chip reduces the amount of total board space required for a phone, as well as reducing the amount of power needed to sling data around, two things that Apple has shown to appreciate as they have continued to push the envelope on thinner and lighter phones.

https://www.anandtech.com/show/14676...modem-business