Apple obtains the rights for Intel’s smartphone modem business for $1 billion

After hypothesising for a long time Apple finally confirms about its deal with Intel on Intel’s smartphone modem business. Intel grabs $1 billion through this business. The transaction is expected to close in the fourth quarter of 2019. This is Apple’s second-largest purchase after its deal with headphone maker and music streaming provider Beats in 2014. This is one of the most high-profile deal in recent times. Other than the intellectual property, equipment and leases, about 2,200 Intel employees will also join Apple. This will enhance Apple’s 5G plans and will be very beneficial for Apple.

After this intellectual property addition, Apple holds over 17,000 wireless technology patent rights including protocols for cellular standard to modem architecture and modem operation. In this deal, it is clearly stated that Apple will hold modem business only for smartphones, while Intel still possesses the right to develop modems for non-smartphone applications, like IoT devices, PCs and autonomous 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,” 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” he added.

“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,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies.

Apple has been working on its own chips for quite some time. Obtaining Intel’s technology can help the iPhone maker to boost up its plan.

Till now, only Qualcomm, Samsung, and Huawei have designed and shipped such System-on-Chip (SoC), while Taiwan’s MediaTek announced last May at Computex that the first devices using its 5G SoC will launch in the first quarter of 2020.

Author: Shubham Shaw

Patent Engineer

Neropat IP Services

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