Apple picks up Intel's smartphone modem business

Apple has confirmed it is to acquire Intel's smartphone modem business, recently shuttered, in a deal valued at £800 million - and the news should be cause for concern at Qualcomm.

Intel's attempt to break into the market for baseband processors and cellular modems was not a success by any yardstick: The cracks began to show back in May 2016 when the company cancelled its SoFIA modem family alongside its smartphone-focused Broxton Atom processors, though at the time it denied it was planning to exit the market altogether; three years later the other shoe dropped and Intel confirmed it was leaving the modem market having failed to find a route to profitability. For industry giant Qualcomm, it was great news: Apple, one of Qualcomm's biggest customers, had been working on a move from Qualcomm parts to Intel parts; Intel's departure left it with no choice but to go crawling back to Qualcomm once more.

No choice, that is, except one: Apple has confirmed rumours that it is to acquire the majority of Intel's former modem business for £800 million, effectively telegraphing that it plans to bring modem production in-house alongside its Arm-licensed mobile system-on-chip (SoC) designs.

'We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users,' claims Johny Srouji, Apple’s senior vice president of hardware technologies. 'Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward.'

Intel, meanwhile, is focusing on what it is keeping, rather than what it is selling. 'This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,' says Intel chief executive Bob Swan. 'We have long respected Apple and we’re confident they provide the right environment for this talented team and these important assets moving forward. We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.'

The deal sees Apple take on around 2,200 former Intel employees along with parts, equipment, and various leases alongside an unspecified portion of Intel's modem-related patent portfolio - bringing Intel's wireless communication portfolio to more than 17,000 patents total. Intel, meanwhile, is no longer allowed to develop modems for smartphone devices - something it had abandoned anyway - but is still permitted to develop modems for other arenas including connected PCs, Internet of Things (IoT) products, and autonomous vehicles.