NEWS ANALYSISthis deal has significant ramifications. Just four months
ago, Apple and Intel were partners on the development
of the iPhone’s 5G modem, but that abruptly ended
in one fell swoop when Apple and Qualcomm settled
their long-time court case and Intel “announced its
intention to exit the 5G smartphone modem business
and complete an assessment of the opportunities for
4G and 5G modems in PCs, Internet of Things devices
and other data-centric devices”.
That assessment apparently led to a sale, which in
turn led to Apple’s purchase. While it’s not entirely
clear why Intel decided to exit the mobile modem
business, conventional wisdom suggests that its chip
development hadn’t advanced far or fast enough.
So on the surface, it would seem like there’s
nothing to buy, especially for the presumed price
of a billion-plus. But Apple wouldn’t be buying
Intel’s modem scraps. Rather, it would be investing
in years of work (and patents) by one of the largest
semiconductor manufacturers as it looks to develop
an in-house 5G chip for future iPhones that can rival
Qualcomm’s. It’s not going to happen anytime soon,
since Apple and Qualcomm inked a six-year licensing
agreement with a multi-year chipset deal in April, but
Apple’s playing a long game here.
But while the iPhone is clearly the main impetus
behind this deal, I don’t think Apple’s motivations
are limited to the handset. 5G looks to impact
every sector of Apple’s product lines, and acquiring
Intel’s smartphone modem chip business – even
unfinished – could have far-reaching implications
within both Apple and the industry. Here are threeNEWS ANALYSISthisdealhassignificantramifications.Justfourmonths
ago,AppleandIntelwerepartnersonthedevelopment
oftheiPhone’s5Gmodem,butthatabruptlyended
inonefellswoopwhenAppleandQualcommsettled
their long-timecourtcaseandIntel“announcedits
intentiontoexitthe5Gsmartphonemodembusiness
andcompleteanassessmentoftheopportunitiesfor
4Gand5GmodemsinPCs,InternetofThingsdevices
andotherdata-centricdevices”.
Thatassessmentapparentlyledtoa sale,whichin
turnledtoApple’spurchase.Whileit’snotentirely
clear why Intel decided to exit the mobile modem
business,conventionalwisdomsuggeststhatitschip
developmenthadn’tadvancedfarorfastenough.
Soonthesurface,itwouldseemlikethere’s
nothingtobuy,especiallyforthepresumedprice
ofabillion-plus.ButApplewouldn’tbebuying
Intel’smodemscraps.Rather,itwouldbeinvesting
inyearsof work(andpatents)byoneofthelargest
semiconductormanufacturersasitlookstodevelop
anin-house5GchipforfutureiPhonesthatcanrival
Qualcomm’s.It’snotgoingtohappenanytimesoon,
since Apple and Qualcomm inked a six-year licensing
agreementwitha multi-yearchipsetdealinApril,but
Apple’splayingalonggamehere.
But while the iPhone is clearly the main impetus
behind thisdeal,I don’tthinkApple’smotivations
are limitedtothehandset.5Glookstoimpact
everysectorofApple’sproductlines,andacquiring
Intel’s smartphonemodemchipbusiness– even
unfinished– couldhavefar-reachingimplications
within bothAppleandtheindustry.Herearethree