Apple confirms deal to buy Intel modem business

(Image credit: Flickr / Jason Ralston)

Apple has just confirmed what the media were saying last week – that it will be buying off Intel’s mobile modem business and using it to offer 5G connectivity with its upcoming and future devices.

In a press release issued on the company website, Apple said that it would be paying $1 billion to close the deal some time during the fourth quarter of the year (after regulatory approval and other customary conditions).

For the price, the iPhone manufacturer will be getting roughly 2,200 of Intel’s employees, but also intellectual property, equipment and leases.

Intel will, Apple says, still develop modems for PCs, IoT devices and autonomous cars.

“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.”

Apple used to be supplied by Qualcomm for these types of devices, but the relationship was tarnished in these past couple of years. As a result, Apple turned to Intel for modems and connectivity hardware but, allegedly, the company couldn’t provide the devices of the required quality and within deadline, which forced Apple to make peace with Qualcomm.

Once that was done, Intel announced it would be backing out of the mobile connectivity business altogether, saying without Apple as a client, it sees no way forward.

Apple saw this as an opportunity and swooped in with the deal. What happens next with Qualcomm, we’ll have to wait and see.