On July 25, Apple bought most of Intel’s mobile modem business for $ 1 billion . The contract completion time is fixed in the fourth quarter of 2019.
Under the agreement, Apple will receive 2,200 employees, intellectual property rights and equipment from Intel. Combined with current operations, the Cupertino giant has 17,000 patents in the field of wireless networking technology, from mobile communication standards to modem chips.
The deal also helped Apple become a counterweight to Huawei in its 5G global network contracts.
Immediately after the agreement was announced, Intel shares rose 5.7% to $ 55.05 . Apple shares also increased slightly by 0.1%, reaching a value of US $ 207.29 .
Intel retains the right to develop modems in other areas such as computers, industrial equipment and self-driving cars.
Modem chips are an important component, helping iPhone connect to wireless data networks, but Apple has always relied on supply partners so far.
In 2018, Intel was the only unit to provide iPhone modems after Apple and Qualcomm failed to reach an agreement on patent rights and repeatedly dragged them to court.
The prolonged litigation between the two parties was suddenly resolved in April. Once again Apple signed a contract to buy a Qualcomm modem. A few hours later, Intel announced that it would discontinue mobile modem business.
The deal has just allowed Apple to speed up its own modem production, something that rivals like Samsung and Huawei have been doing for a long time. According to Reuters , Apple has signed a contract to buy Qualcomm’s 5G modem to equip the iPhone 2020, but still has the ambition to ensure this component from 2021.