Apple Inc is in advanced talks to buy chipmaker Intel Corp’s smartphone-modem chip business, the Wall Street Journal reported on Monday, citing people familiar with the matter.
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A deal would give Apple key engineering talent and patents that would help it develop new devices to connect to the mobile internet. The Intel assets could be valued at about $1 billion in a transaction, said the person, who asked not to be identified because the matter was private.
Apple has been investing in its own mobile chips to ramp up performance and features in its devices and reduce its dependence on Qualcomm.
Intel earlier this year announced it was abandoning efforts to compete with modem chips for smartphones synced to new-generation “5G” networks.
Intel made the revelation a day after Apple and Southern-California based Qualcomm said they agreed to “dismiss all litigation” against each other worldwide in what had been a sprawling battle over royalty payments.
Apple is building its own cellular modems for devices like the iPhone, iPad and Apple Watch in part to eventually reduce its reliance on buying parts from Qualcomm Inc. or others.
Apple’s latest iPhone models currently use modems sourced exclusively from Intel, but the company settled its long-standing royalties lawsuit with Qualcomm in April amid plans to sell 5G iPhones in 2020.
Qualcomm’s 5G modems are widely regarded to be superior to those from Intel. However, Apple’s licensing and royalties agreement with Qualcomm ends in six years and Apple appears intent on eventual.
Qualcomm denied the allegations and accused Apple of abusing its position and of taking legal action to negotiate prices down.
Conclusion:- Several hours after the deal was announced, Intel said it was withdrawing from the 5G smartphone modem business, without indicating whether its decision was a cause or consequence of the agreement its rival signed with Apple.
