Apple Is Reportedly Close To Acquiring Intel's Mobile Modem Business
A deal valued at $1 billion or more could be coming within the next week, according to the Wall Street Journal.
Negotiations may be nearing the finish line for an acquisition by Apple of Intel's smartphone modem business.
A Monday report from the Wall Street Journal says the companies are in "advanced talks" around the deal, following negotiations that have reportedly been taking place over the past year.
[Related: 5 Signs Apple Wants To Make More Of Its Own Chips]
The deal “could be reached in the next week” and end up being worth $1 billion or more, comprising both patents and staff members, according to the report.
Intel declined to comment, and Apple did not immediately respond to a request for comment.
Patrick Moorhead, president and principal analyst at Moor Insights and Strategy, previously told CRN that Apple "wants to develop its own modems to reduce its reliance on other companies, integrate into other devices and theoretically lower costs."
"It took Samsung and Huawei eight to 10 years to develop its modems to high-quality standards and they even own the carrier equipment, which makes it easier," Moorhead said. "Apple doesn't design carrier equipment, doesn't have eight to 10 years, but if they bought Intel's mobile modem, it could shave off a few years."
In June, a report in The Information said that Intel has been considering "selling its struggling modem business in pieces," with the German modem operations potentially going to Apple.
However, the Wall Street Journal report gives no indication that Apple is only looking to acquire part of Intel's mobile modem business—instead implying that Apple will “buy Intel Corp.’s smartphone-modem chip business” in its entirety.
Beginning last summer—and ending "around the time" of Apple's agreement with Qualcomm in April—Apple held talks about acquiring part of the smartphone modem business from Intel, the Journal reported previously. Apple and Qualcomm entered a six-year patent license agreement, as well as a multiyear chipset supply agreement.
Evidence has been mounting that Apple wants to develop its own iPhone modems, however.
A December report in The Information about a modem project within Apple was followed by a February report from Reuters, which indicated Apple had shifted modem engineering from its supply chain unit into its own hardware division.
Apple has a lengthy history of chip design, and "having more and more components under their own roof would make them more in charge of their own design destiny, timing and launches," said one executive at a solution provider partner of Apple, who asked to not be identified, in a previous comment to CRN.
At the very least, Intel has stated its intentions to pull out of the 5G modem business following the Apple-Qualcomm deal. Intel's leaders are "assessing our options to realize the value we have created" in 5G modems, Intel CEO Bob Swan said in a previous statement.
According to reports, Intel had been the only 5G modem supplier for the 2020 iPhones but had missed deadlines for delivering sample parts of its 5G modem.
Previously, while Apple and Qualcomm were locked in their legal dispute, Apple began exclusively using Intel's cellular modems starting with the 2018 iPhone lineup.