Apple, in a press release, announced that Apple and Intel have signed an agreement which has enabled Apple to buy the Intel’s smartphone modem business for USD 1 billion. With this deal, about 2200 employees that worked for Intel will join Apple and this transition will also include the intellectual property, equipment, and leases. The transition will get completed by the fourth quarter of 2019.
This acquisition will give boost to number of current and future patents as it will take the number to 17,000 plus wireless technology patents.
“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,” said Intel CEO 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.”“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,” said 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.”
While Apple starts developing modems in-house, post this deal, this would benefit Apple in a way that it can now control the development at it’s own pace – moreover, it will help Apple integrate these modems better with their devices. Qualcomm, who is the dominant supplier of the smartphone modems, will get impacted in a way that Apple will rely less on Qualcomm. Apple’s strategy of acquiring processor business has already proven to be a great initiative since it has helped Apple put it’s chip ahead of the industry.
Apple has been on the hunt to develop it’s own modems for sometime one. One of the evidences surfaced around last year when Apple announced to hire employees, with Smartphone Modem expertise, in cities like Santa Clara and San Diego. The latter city has a huge facility where Qualcomm has global headquarters.