Release Confirms Rumors from Earlier This Week, Deal Priced at $1 Billion…
In a move that anticipates the emergence of 5g in 2020 and beyond, Apple takes a bold step in moving it’s 5g modem production forward, though this deal.
If you are dreaming of the up-coming release of an ultra fast and state-of-the-art 5g iPhone you are in luck, just likely not this year. At minimum, this acquisition assures that Apple is seriously committed to a 5g future.
Fruit of this development assures that a plan is in place for 5g modem units, currently slated to be supplied by Qualcomm, to be supplied by Apple itself, over time. Ultimately, the acquisition paves the way for a strong, smooth transition toward Apple designing and producing this crucial component going forward.
According to the press release from July 25th, the two companies have signed an agreement for Apple to acquire the “majority” of the modem production unit of Intel for $1 Billion.
In the deal Apple will get intellectual property, leases and equipment along with 2,200 employees who will now work for the iPhone maker.
“We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users…”– Johny Srouji, Apple’s senior vice president of Hardware Technologies
Eventual In-house Control of Critical Components
This development is also in keeping with Apple’s long standing practice of staying ahead in smartphone innovation by investing in the ability to develop and manufacture key components, such as wireless modems in this case. With a critical transition to 5g wireless looming, this appears to be smart and decisive, if not unexpected, move for the company.
Wireless modems, previously outsourced to others, such as Intel and Qualcomm, are an increasingly important component for Apple, long term, to design in-house in order to enable special features, cost savings and control of the design process for the entire device.
Although it is likely that apple will continue for some time to use Qualcomm 5g modems for it’s iPhones, now that the lawsuit between the two companies has been settled, the Intel technology, patent and human resource transfer will enable it to shift to in-house production at some point, likely for 2021 and beyond.
A Prime target in the deal; patents for current and future wireless technology, which, when combined with Apple’s existing portfolio will reach a total of over 17,000.
These include patents for cellular standards, modem operations and architecture. After the deal, Intel will continue to operate in the modem area, however, exclusively for PC’s, internet-of-things and autonomous vehicles, while Apple will take over all operations related to smartphone applications.
”This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created..”– Intel CEO Bob Swan
The deal is expected to be finalized later this year.
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