Apple lost the 5G battle, but it paid Intel $1 billion to win the war

Apple agreed to use Qualcomm modems for the next six years, but now that they’re acquired Intel’s modem business, they may not need to.

Steve Kovach for CNBC:

Apple may have lost the 5G battle to Qualcomm, but it’s now in a position to win the war.

Apple said Thursday it will buy Intel’s smartphone modem business, which includes several patents and about 2,000 Intel employees, for $1 billion. It’s no secret Apple has been interested in developing its own modems for the iPhone, and buying up all that Intel IP puts it in a position to have one ready by the time its deal with Qualcomm runs out.

MacDailyNews Take: Well before its deal with Qualcomm runs out if all goes even remotely well.

In April’s settlement, Apple agreed to use Qualcomm modems for the next six years, with an option to extend the relationship another two. That gives Apple up to eight years to perfect the smartphone modems Intel was struggling with and get them up to par with Qualcomm’s technology…

Apple has a talented executive, SVP of hardware technologies Johny Srouji, on deck to make it happen. Srouji is the genius who turned Apple into a company that makes some of the best-performing mobile processors in the world… Now he’ll get a chance to do the same with an equally important iPhone component.

MacDailyNews Note: Earlier today, Reuters reported that Apple has charted an aggressive timeline for producing an internally-developed 5G modem for use in some of its products by 2021.


  1. Apple can try to build a decent 5G broadband modem but it just seems unlikely they’ll ever build something better than what Qualcomm can build. Maybe Apple will get lucky but I think the odds are against Apple. It almost seems like a waste considering Apple’s insignificant iPhone market share. At least Qualcomm will be selling hundreds of millions of 5G modems to various smartphone manufacturers while Apple will be using just tens of millions of their own 5G modem in the iPhone or iPad. I wish Apple the best of luck but I already know Wall Street is betting against Apple.

    1. Apple’s purchase of Intel’s modem business and intellectual property (with a few narrow exceptions on each) has more to do with the next generation after 5G than it does about 5G itself.

      While wired connections for your desktop and laptops is always best when it is practical, more and more people are going to wireless connections for each. Apple being able to be a central and core part of the next leading edge wireless technologies — and not just “6G” — will be an important part of Apple’s strategy over the next decade.

      It’s not just about modems that go into 100 million iPhones a year.

    2. We should call you Maleficentseven44 for your incredible display of ignorance. Apple could never succeed in music players, or smartphones, or CPUs, or GPUs. But they are world leaders in all these areas.

      These obvious failures (in your maleficent eyes) are surely proof that Apple will obviously fail in 5G, too, right?

      Your obvious mental disabilities are magnificently…. obvious.

    3. The same logic applies to building their own A class chips rather than using inferior Qualcomm ones market share is only a part of the story, it’s silicon contributes significantly to it being by far the most profitable player in the industry which is far more important than lazy market share figures as has long been Proved surely.
      Equally have you not followed the near extortion racket that Qualcomm has applied to Apple in the Modem market which gives it control that can literally manipulate the iPhone market to its, and other customers market benefits and put pressure on all aspects of Apple’s business generally, particularly in mobile. In light of that it isn’t about producing a ‘better’ modem it simply needs to make a competitive one after all Qualcomm gets away with profiting from far less competitive silicon in the processor market. It will be cheaper for Apple in the long most likely (due to Qualcomms outlined behaviour and further potential exploitation of it) but more importantly strategically it will benefit Apple increasingly as most of its products in the future acquire such chips and technology, scale increases and most importantly Apple specific technology and capabilities can be incorporated that benefit those products. Much of this latter can only be speculated upon at present but having that potential in-house will offer, as it does in its processors already considerable potential benefits and advantages over competitors and weaken Qualcomm. Equally see the article here on the effects and benefits of Apples ‘minor market share’ on Google and why it pays out so much to Apple retain a bite of it.

      It’s simply naive to take the narrow view that you express here and Apple above all knows that better than we do.

  2. The Self-Driving Car Network will be controlled by a 5G Network (or its successor). . . analysts are making the mistake of thinking Apple’s investment in Intel’s modem business is mainly related to smart phones — in fact, its an investment in the future communications network that will link self-driving cars, iPhones, Apple Glasses, etc.

      1. That is interesting but I suspect that if so this is a somewhat protective move that isn’t so specific as surely if Intel are no longer making such chips it wont mean that they reserve the right to exclude these chips from self driving cars per se surely, it sounds completely counter intuitive. It must be a bit more nuanced than that and I can’t see how it is likely to stop Apple any right to use them in self driving applications. But I guess the specifics will eventually become clearer over time.

    1. Spot on Jay you clealy have greater insights than many. This technology is for the long term and I am glad that Apple is seeing this when in the past it so often neglected such strategic moves. Indeed it should have seen it earlier.

  3. Apple’s purchase of the old Infineon Patents are worth more than 5G…

    if Samsung, Huawei, etc can build decent modems… why not Apple… especially one that is integrated with their top of the class A-Series.

    Jobs always wanted to own the widget

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