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Intel announced on Monday that it has officially completed the sale of most of its smartphone modem business to Apple.
The $1 billion sale, which was first announced back in July, went through after obtaining regulatory approval. Interestingly, Reuters uncovered documents that indicate Intel admitting to a “multi-billion dollar loss” as part of the deal.
As for why it sold its business, Intel notes that its chief competitor, Qualcomm, effectively “strangled competition” and forced it to exit the market. (Presumably, after Apple and Qualcomm struck a modem supply deal.)
While Intel can still make modems for any device other than a smartphone, the sale has much larger implications for Apple and its users.
What This Means for Apple
As part of the deal, Apple is acquiring the “majority” of Intel’s smartphone modem business, including intellectual property (IP), equipment and infrastructure. Around 2,200 Intel employees are also joining Apple.
One notable part of the sale is the acquisition of a large portfolio of wireless patents previously owned by Intel.
Now, Apple owns more than 17,000 wireless technology patents, including patents on everything from cellular standard protocols to modem architecture.
That would be a massive boon for Apple’s chipmaking efforts, but it’s likely to be even more important because of the company’s current struggle to produce a first-party modem.
While Apple is currently working on making a first-party smartphone modem chip, recent reports suggest that it won’t be ready until 2025.
The acquisition of Intel’s smartphone modem business, which includes both engineers and IP, will undoubtedly give that project more of a kickstart — and possibly shorten that launch timeline.
If that turns out to be the case, it would also mean Apple would accomplish another of its goals: reducing reliance on massive third-party manufacturers like Samsung or Qualcomm.
What This Means for You
It isn’t just Apple’s business prospects that stand to benefit from this acquisition. Intel’s smartphone modem business is likely to give users some tangible benefits, too.
Apple iPhone owners have legitimately suffered subpar cellular performance in the past thanks to the company’s tortuous legal battle with Qualcomm. Thanks to the multi-year chip agreement, that won’t be the case moving forward.
But an Apple-produced chip would mean that the company and its users probably won’t run into a similar situation in the future.
More than that, Apple’s current chipmaking prowess is already impressive. The company routinely produces silicon that outperforms its closest rivals by a large margin.
Apple’s expertise in making first-party smartphone chips, combined with Intel’s existing experience in the area, may produce a top-notch modem chip that won’t have any close competitors — both in performance and power efficiency. Of course, that’s just speculation at this point. But Apple making its own iPhone modems will undoubtedly be a major boon for iPhone owners.