Apple might have ditched the plan to use Intel’s 5G modem in its 2020 iPhones, but the Cupertino company remains interested in buying a piece of its smartphone modem business. Four different sources familiar with the matter told The Information that the iPhone maker was in talks to buy Intel’s German smartphone modem business. The acqui-hire deal could help the Cupertino company build its own modems for the future iPhones.
Apple in talks to buy Intel’s German unit
It’s not the first time the reports of the iPhone maker’s interest in the chipmaker’s German unit have surfaced. Back in April, The Wall Street Journal reported that Apple had been in talks with Intel since last year to buy its German unit, which is the chipmaker’s one of the most promising units. The latest report suggests the two companies are still negotiating a potential deal. The discussions could still fall through, warned The Information.
If the deal goes through, it will “likely send hundreds of modem engineers to Apple.” The chipmaker said in a statement to Cnet that it had “received significant interest” in its 5G business. It has hired outside advisers to help it “assess the strategic options for our wireless 5G phone business.” It plans to sell its modem business in pieces.
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Sources told The Information that a potential deal between the two technology heavyweights would include Intel’s products as well as patents. Apple made a similar deal with Dialog Semiconductor last year. The $600 million deal brought roughly 300 Dialog Semiconductor employees and some patents to Cupertino.
Why does Apple want Intel’s smartphone modem business?
Intel’s modem business is spread across the globe. Why is Apple interested in the German unit? Because that’s where the most important asset of Intel’s modem business is. When Apple launched the original iPhone more than a decade ago, it featured modems from Germany-based chipmaker Infineon. The iPhones continued to use Infineon modems until Apple switched to Qualcomm in 2011.
Intel acquired Infineon’s wireless solutions business in a $1.4 billion deal and absorbed Infineon’s staff into its German arm. The iPhones started using Infineon/Intel’s chips again in 2016 with the iPhone 7 and 7 Plus following the disputes with Qualcomm. Apple wants to buy this very division of Intel.
The Cupertino company planned to use Intel’s 5G modem in 2020 iPhones. But Intel was not able meet design deadlines. Apple didn’t want to delay the launch of 5G iPhones any further. Android vendors such as Samsung, OnePlus, Xiaomi, and others have already launched their 5G smartphones. Earlier this year, the Cupertino company settled its disputes with Qualcomm and signed a multi-year 5G chip supply deal. It means the 2020 iPhones would be running Qualcomm’s 5G modems.
Apple was Intel’s biggest opportunity to enter the 5G smartphone modem space. Immediately after the Apple-Qualcomm deal, Intel announced that it would stop developing 5G modems for smartphones. Over the last several months, the iPhone maker has also poached several Intel executives. A few months ago, Stefan Wolff, the head of Intel’s German modem team, left Intel to join Apple. The iPhone maker has also poached Intel’s 5G lead engineer.
Apple is rumored to be developing its own smartphone modems to reduce its reliance on third-party vendors like Qualcomm and Intel. As per The Information, Apple has told new hires in its modem chip division that it won’t launch devices with its own modem chips until 2025. The acquisition of Intel’s smartphone modem business could help boost Apple’s modem development efforts.
The Cupertino company has been bringing more and more technologies in-house to deliver a unique experience to customers. It allows Apple to tightly integrate the software and hardware of its products.
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