Apple CEO Tim Cook steadily says his firm tries to own every primary piece of technology in its products, instead of relying on outside parties. That helps clarify the news that Apple seems close to purchasing Intel’s smartphone modem division, together with patents and workers, for $1 billion or more.
The iPhone maker already has a provider for modem chips: Qualcomm. Before this year, as a part of a settlement over patent licensing, Apple agreed to purchase Qualcomm chipsets for multiple years-long enough so that it’ll probably use Qualcomm’s superior 5G modem chip in future phones.
However, 5G is an extended game and will be strategic for Apple because the high-speed network gets built out, and shoppers begin anticipating faster performance and more capabilities. With ownership of chip growth, Apple can control its destiny.
“Apple does understand it’s not another chip — it’s strategic intellectual property in a related device,” stated Prakash Sangam, founder of Tantra Analyst, an analysis and advisory firm. “This is among the key strategic pieces of IP they don’t have, and it makes sense to personal it.”
The deal to buy Intel’s modem belongings is just not final yet. However, it might become official soon, based on a report on Monday from the Wall Street Journal. Apple and Intel every declined to comment. In April, Intel introduced that it was exiting the 5G market because, as CEO Bob Swan stated, the division had “no clear path to profitability and constructive returns.”
Currently, Apple is Intel’s solely modem buyer, in response to analysis from Chris Caso of Raymond James. Qualcomm chips are on the way. Patrick Moorhead of Moor Insights and Technique mentioned that even if Apple buys Intel’s assets, “it takes the best case five years to get competitive.”