Apple will acquire the majority of Intel’s smartphone modem business in a $1 billion agreement.
Under the agreement, approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. The transaction is expected to close in Q4 of 2019, subject to regulatory approvals and other customary conditions.
Apple will hold over 17,000 wireless technology patents once the transaction is complete, ranging from protocols for cellular standards to modem architecture and modem operation.
Intel, will still be able to develop modems for non-smartphone applications, such as PCs, IoT devices and connected vehicles following the acquisition.
“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.”
“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,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies. “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 acquisition will enable Apple to be able to make its own smartphone modems internally as the company transitions into producing 5G smartphones. Competitors, Huawei and Samsung have already released their first 5G smartphones, although many people must still wait for 5G network coverage to be deployed to enjoy the speeds 5G has to offer.