Apple recently announced that it will be buying Intel’s phone chip division. According to Apple, they will be buying the tech company’s smartphone modem division for $1 billion. This will add more resources to the Apple’s bid to build in-house, the chips that power its iPhones. The purchase of the tech company’s phone chip division will also hasten Apple’s 5G efforts.
About Apple’s Deal to Buy Intel’s Phone Chip Division
According to sources close to the deal, the deal is expected to close by the end of 2019. Apple will be buying practically every asset associated with the tech company’s phone chip division. These assets include its 2,200 former employees, its patents, equipment and leases. Many are confused by Apple’s decision to purchase the phone chip division. Seeing as the tech giant agreed in April to resume buying phone chips from Qualcomm. This was part of a legal settlement. The purchase of the division may hasten the tech giants longer-term ambitions for more control over the hardware that will connect its devices to the next generation of wireless service, 5G.
Apple, Qualcomm and Intel.
Before purchasing their phone chip division, the tech giant previously tapped Intel to develop chips for its first 5G-enabled iPhones. But according to rumourville, the chip company stated that they won’t be able to supply the chips to the tech giants in time. So Apple then decided to settle its legal dispute with its previous primary modem partner, Qualcomm. This settlement includes a multiyear supply contract.
After Apple announced the settlement, Intel announced that it will be put the pausing its work towards a 5G phone modem. They also stated that they will continue to develop 5G hardware for other devices. Apple then approached them and they decided to sell. According to The Wall Street Journal, the decision was a wise one, seeing as the division was said to be weighing on Intel’s bottom line with around $1 billion in annual losses.
Apple and Intel Speak on the Deal
Johny Srouji, Apple’s senior vice president of hardware tech spoke about the deal. He talked about how they had worked with the tech chip company for many years and how they know that they share their passion for designing technologies that deliver the world’s best experiences for users. Srouji explained that the team plus the acquisition of innovative IP, will help expedite their development on future products.
Bob Swan the CEO of Intel spoke on the deal. He stated that the deal allows them to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that their team has created. Swan stated that they are looking forward to putting their full effort into 5G where it most closely aligns with the needs of their global customer base.