Intel Will Keep Rights to Develop Non-Smartphone Modems in $1B Apple Deal
Apple will buy most of Intel’s smartphone modem business for $1 billion in a deal expected to close Q4, said the companies. About 2,200 employees will join Apple, which also gets from Intel intellectual property, equipment and leases. Intel keeps…
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rights to develop modems for non-smartphone applications, such as PCs, IoT devices and autonomous vehicles. The chipmaker exited the 5G smartphone modems business in April, seeing “no clear path to profitability and positive returns" (see 1904170004). It said then it would evaluate opportunities for 4G and 5G modems in non-smartphone products. Thursday's announcement was Intel's first confirmation it would hold onto those other modem businesses. “While the 5G network opportunity meets each of our investment criteria, the 5G smartphone opportunity does not,” said Intel CEO Bob Swan Thursday on the company's previously scheduled Q2 call. The deal with Apple “preserves Intel’s access to critical IP we have developed, and enables us to focus on the more profitable 5G network opportunity, where we are growing and winning share,” he said. Intel shares rose 6.4 percent after hours to $55.50.