Apple reportedly considered buying Intel's smartphone modem business

Spencer Platt/Getty ImagesApple’s iPhone XS
  • Apple has reportedly held discussions with Intel about buying parts of its smartphone modem chip division, reports The Wall Street Journal.
  • The talks stalled around the time Apple and Qualcomm announced a six-year licence agreement and agreed to drop all litigation against one another.
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Apple has discussed acquiring a portion of Intel’s smartphone modem chip division, according to a new report from the Wall Street Journal.

The talks stopped recently around the time Apple struck a deal with rival chipmaker Qualcomm, per the report. The two companies recently announced that they have entered a six-year licence agreement and a multi-year chipset supply agreement, in addition to dropping all litigation against one another – ending a long-running dispute.

The news also comes after Intel CEO Bob Swan said last week that it had exited the 5G modem business, with the announcement coming in the immediate aftermath of the agreement between Apple and Qualcomm.

“In light of the announcement of Apple and Qualcomm, we assessed the prospects for us to make money while delivering this technology for smartphones and concluded at the time that we just didn’t see a path,” Swan previously said to the Journal, separately from this report.

Intel is now pursuing other alternatives for its modem business, according to the Journal, which could include a potential sale to Apple or another company. A deal could result in a few billion dollars for Intel, the Journal reports citing people familiar with the matter. The chipmaker has reportedly hired Goldman Sachs to oversee the process.

If Apple were to acquire Intel’s smartphone modem chip business, it would likely represent one of the iPhone maker’s biggest acquisitions yet, likely at a similar scale to its $US3 billion purchase of headphone company Beats Electronics in 2014.

Apple is expected to release an iPhone with a 5G modem in 2020, according to TF International Securities analyst Ming-Chi Kuo. The analyst, who frequently makes predictions about new Apple products, says Qualcomm and Samsung could provide the modems, according to CNBC.

Shortly before Apple and Qualcomm’s joint announcement, CNBC reported that Chinese smartphone giant Huawei also recently said it would be “open” to selling 5G chips to Apple.

However, were Apple to buy Intel’s 5G modem business, it could take the process in-house, in a manoeuvre that could appeal to the company – Apple generally prefers owning as many parts of the process as possible, where it can.

Apple declined to provide a comment when contacted by Business Insider.

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