It is not often apparent to many
casual tech users that the branded devices they have are actually made out of
components that come from various firms and are put together by the
manufacturer whose brand is on the casing. Smartphones, for example, have a lot
of internal parts that are either licensed or bought from companies that make
them. Qualcomm for instance has its chips being near-ubiquitous in smartphones,
Android or Apple iPhones. Qualcomm and Apple actually got into a legal battle since
2017 when the latter switched to using Intel chips due to costly patent
licensing from the former. The two have settled, and now Apple has acquired
Intel’s modem business for smartphones.
Tech Crunch reports that Apple made an acquisition of the smartphone
sector of Intel’s modem manufacturing. The deal, amounting to about $1 billion,
was jointly announced by the two companies on Thursday, July 25. As a result,
Apple will gain a number of intellectual properties and manufacturing equipment
from Intel, as well as building leases and no less than 2,200 employees going
to Apple. The IPs gained from the acquisition, expected to be finalized by the
end of 2019, will bump up the wireless tech patents under Apple to 17,000.
With the smartphone modem
business from Intel now a part of their company umbrella, Apple can have full
control in the development of smartphone modems for 5G, or the “fifth
generation” of cellular network technology. This means they no longer need to
license chip patents from Qualcomm, with which they had had business conflicts since
2017, until settling their differences just this April. Coincidentally, Intel
announced its intent to quit development initiatives for 5G smartphones, all
but inviting an acquisition for that part of their business. They will however
continue modem development for non-smartphone devices like PCs and smart
vehicles.
Johny Srouji, SVP for Apple,
notes in an official statement that Apple’s working relationship with Intel
lets them know they share a passion for tech designs to give users the best
device experiences ever. “Apple is excited to have so many excellent engineers
join our growing cellular technologies group,” Srouji notes. “They, together
with our significant acquisition of innovative IP, will help expedite our
development on future products and allow Apple to further differentiate moving
forward.” Tech analysts opine that, with Intel’s phone modem infrastructure on
their side, they can make their own 5G modems within three years, but plans to
start hyping their 5G capability as early as 2020.
The Intel deal is also another
step in Apple’s new direction under Tim Cook, to ultimately have all device-component
manufacturing under the same umbrella, to stop relying on outside companies
involving patent licensing and such.
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