Wall Street Journal has reported that Apple is apparently in advanced talks to acquire Intel’s smartphone modem business with the purpose of building its own 5G chips for the iPhone.
The deal is valued at $1 billion and significant for Apple as it allows the company access to Intel’s development on 5G technology, including patents and employees. Apple’s latest iPhones in the market like the iPhone XS, XS Max and XR house Intel modems, whereas older iPhones used 4G chips from Qualcomm.
4 Key reasons why Apple wants Intel modem business
- Apple Owned components: Apple has been slowly building its presence in the components market, as it wants to have its own hardware and software in its devices. With its owned chips, Apple is able to better control the features it releases, as well as manage the timeline for introducing new iPhones. With Intel’s modem, it will have an overview of cellular networks as well. Apple owned modem chips, would allow the company to protect its margins and be less dependent on vendors such as Qualcomm.
- Access to Intel’s patents: Apple also stands to gain vital Intel patents to protect itself from other mobile companies and issues related to patent infringement.
- 5G wireless network: One area that Apple is still struggling with is making 5G enabled iPhones. Hence, getting access to Intel’s 5G technology could help Apple jump-start efforts to make chips that connect its iPhones to the new, super-fast 5G wireless network. Although, Intel itself could not make a 5G chip for Apple’s iPhones, and ultimately ended up quitting that business after Apple and Qualcomm reached a multi-year chip supply agreement in April. However, Intel still owns important patents that could benefit Apple and it would help Apple speed up in-house development efforts for 5G iPhone.
- Improved Battery performance : Apple made modems when in use could significantly improve wireless performance and battery life on its devices as the company would be able to tweak the chip for enhanced battery performance