Apple has charted an aggressive timeline for producing an internally-developed 5G modem for use in some of its products by 2021.
Apple Inc took a major step toward supplying its own smartphone chips by purchasing the majority of Intel Corp’s modem business in a deal valued at $1 billion, the companies said on Thursday… Apple’s acquisitions have mostly been much smaller companies, making the Intel deal its second-largest ever after its $3.2 billion purchase of Beats Electronics in 2014.
Under the deal, about 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. Combined with its existing portfolio, Apple will have 17,000 wireless technology patents, ranging from cellular communication standards to modems, making it a more powerful player in global licensing talks that will likely take place between major 5G patent holders such as Huawei Technologies Co Ltd.
Apple Chief Executive Tim Cook has also long said the company wants to control its own technological fate, what analysts have called the “Cook Doctrine.”
“We believe that we need to own and control the primary technologies behind the products that we make,” Tim Cook told investors back in 2009.
MacDailyNews Take: Actually, analysts, it’s the Jobs Doctrine:
I’ve always wanted to own and control the primary technology in everything we do. — Steve Jobs, October 12, 2004
Cook is simply following Jobs’ plan.
The purchase of Intel’s assets could help Apple meet its aggressive timeline for producing a modem. A person familiar with the matter said Apple plans to use Qualcomm’s modem technology for a 5G iPhone in 2020 but wants to have an internally-developed 5G modem technology ready for use in some of its products by 2021.
Apple has engaged with Taiwan’s Global Unichip Corp, a chip design house in which Apple supplier Taiwan Semiconductor Manufacturing Co is an investor, to explore a modem design, but the work is in early stages.
The $1 billion for Intel’s modem business is a shrewd investment as Apple will need to strike deals with 5G patents holders, including Nokia, Ericsson, Huawei and Qualcomm. Cupertino will likely save more than $1 billion in cross-licensing deals with Intel’s patent portfolio in their negotiations arsenal.