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Intel To Abandon 5G Smartphone Modem Chip Plans

Apple had been planning on using Intel's 5G smartphone modem chip for its upcoming 5G iPhones, but with the sudden settlement of the Apple-Qualcomm litigation and Intel's slow development of the chips, Apple's plans may be changing.

The settlement today in the legal fight between Apple and Qualcomm is already starting to ripple throughout the IT industry as Intel late Tuesday said it will exit the 5G smartphone modem chip business.

Intel, in a press release, said it no longer expects to launch 5G smartphone modem chips. It had originally announced plans for such a launch in 2020.

Instead, Intel will continue to meet existing commitments for its existing 4G smartphone modem products, assess the opportunities for 4G and 5G modems in data-centric devices including PCs and IoT devices, and continue investing in 5G network infrastructure technology, the company said.

[Related: Apple’s Future Plans And Products: 5 Things We Learned This Week]

The change in Intel's 5G plans came hours after Apple and Qualcomm dropped all litigation against each other.

The settlement happened as court proceedings started this week over a 2017 lawsuit in which Apple accused Qualcomm of using its dominant position in the smartphone modem market to charge high licensing fees for use of its modems in iPhones. The lawsuit had triggered multiple legal disputes, including accusations by Qualcomm last year that Apple stole Qualcomm's trade secrets.

As a result of the settlement, Apple will make a one-time payment of an undisclosed amount to Qualcomm. The two also reached a six-year patent license agreement that begins this month and includes a two-year option to extend, as well as a multi-year chipset supply agreement.

Apple had been planning to launch a 5G iPhone in 2020 using Intel's XMM 8160 5G modem. However, industry sources including Fast Company have described a rocky relationship between Intel and Apple, especially since Intel had been missing deadlines for development of the chips.

Qualcomm previously was the primary modem chip supplier to Apple for its iPhones.  

An Intel spokesperson, citing that company's quarterly financial report next week, told CRN via email that Intel is not providing more details about the shift in 5G plans.

However, in a statement, Intel CEO Bob Swan said that Intel is very excited about 5G opportunities and the "cloudification" of networks, but sees no clear path to profitability and positive returns in the smartphone modem business.

"5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realize the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world," Swan said in that statement.

Dylan Martin contributed to this story.

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