Apple is buying Intel’s smartphone modem business, as previously rumored.
The company announced on its website that it had signed an agreement to acquire the “majority” of Intel’s smartphone modem business and that around 2,200 Intel employees will join Apple, including the company’s intellectual property, equipment, and leases.
The $1 billion transaction will close in the fourth quarter of the year subject to approval.
At one billion dollars, Apple’s Intel acquisition is the second-largest known after Beats.
When combined with Apple’s existing technology patents, the new Intel acquisition will give the company more than 17,000 wireless technology patents in total, which will no doubt come in useful as we head into a new 5G era where consumers demand super-fast speeds.
As part of the agreement, Intel will be able to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles, but not smartphones for the foreseeable future, though Apple did not specify for how long exactly.
“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.”
Apple had previously been rumored to purchase Intel’s modem business after it was placed up for sale earlier in the year.
Intel was expected to supply Apple with chips for its 5G iPhone in 2020 because it was facing an ongoing legal battle with Qualcomm, but after the two settled their legal differences, Intel announced plans to exit the 5G smartphone business.
Apple has expressed interest in selling iPhones with a proprietory chip, and with the new patents, technology, and manpower from Intel, that vision is drawing closer.
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