Apple started negotiations to buy Intel’s modem chip division
Apple is famous for its smartphones, notebooks, and other products. The sales of iPhones made Apple as one of the wealthiest companies in the world. Customers love the iPhone for its speed, design, and simplicity. However, to maintain the technological advantage, it is important to introduce products which offer cutting-edge technologies regularly. At the moment, the company is struggling to maintain the lead as competitors are working hard to offer smartphones with better capabilities. One of the best solutions in this situation is to acquire a business which will help to bring new features to the iPhone.
5G technology is important for customers as it offers speed and connectivity, which exceeds any previous technology. Hopefully, Apple settled the lawsuit with Qualcomm, which is one of the suppliers of modem chips and other parts used in the iPhone. It is important to mention that Intel is another supplier for Apple. Apple is interested in acquiring the capability to produce modem chips used in 5G technology. Right now, Apple has the licensing and royalties agreement with Qualcomm after the contract expires company is planning to replace the Qualcomm parts with its modems.
There are several ways on how to accomplish this goal. According to a person who is familiar with this topic, Apple wants to acquire Intel’s modem chip division. The cost of this deal will be around $1 billion. It is not surprising that Apple wants to enter this business for two major reasons. First one is that they want to reduce the dependence on the modems supplied by the Qualcomm. Apple is using its cellular modems in iPhone, iPad and Apple Watch. Acquiring the modem chip division from Intel is another step to rely on its technologies.
The importance of 5G technology
Companies around the world spend billions of dollars to introduce 5G technology. It means that smartphone makers such as Apple prepare for the arrival of this technology. According to the reports, Apple will start selling iPhones equipped with the 5G modem in 2020. Moreover, it makes sense for Apple to invest in the 5G modem chips. It is important to mention that Apple was the sole buyer of Intel’s modems for a long period. Other smartphone makers either used modems produced by Qualcomm or their modems.
It is not the first time Apple turned to Intel in their quest to learn more about the 5G technology. Several months ago, Apple hired the former head of Intel’s 5G mobile technology Umashankar Thyagarajan. This decision shows that the management of the Cupertino-based company understands the importance of this technology.
It is interesting how the deal will unfold during the next several weeks. In the case of a successful acquisition, Apple will make a huge step to becoming more self-reliant. This will help Apple to achieve its goal to introduce the 5G technology in their products.