Apple acquiring most of Intel’s smartphone modem business in $1B deal

Apple has entered into a deal to acquire a majority of Intel’s modem business, TechCrunch has learned. The deal, valued at around $1 billion, includes Intel IP, equipment, leases and employees, with Apple bringing over 2,200 new roles and bringing its portfolio up 17,000 wireless technology patents.

“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,” Apple SVP Johny Srouji said in a release tied to the news. “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.”

The deal confirms earlier rumors that Apple would acquire the business in order to permanently uncouple itself from Qualcomm, the source of much contention for both parties over the last several years. Apple and Qualcomm settled their differences back in April, with both parties agreeing to drop litigation.

The move was believed to be an attempt for Apple to ready the iPhone for a 5G push, expected at some point in 2020. Intel’s 5G solution has generally been regarded as the inferior of the two, with the company having missed out on the last decade’s smartphone boom.

The move is also in line with Apple’s recent push to build all of its device components in-house. CEO Tim Cook signaled the way forward for the company a decade ago, when he told the press, “We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution.”

Under the deal, Intel retains ability to develop modem technology for non-smartphone devices, including PCs, IoT hardware and self-driving vehicles.

“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,” Intel CEO Bob Swan said in the statement. “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.”

Apple expects the deal to close in Q4, after being subjected to the standard regulatory scrutiny.