Apple to buy Intel's smartphone modem unit for enhanced 5G development

Apple Inc. said Thursday it will pay 1 billion U.S. dollars to buy the "majority" of Intel Corporation's smartphone modem unit to help it produce its own in-house 5G modem for future smartphones.

With the deal signed with Intel, Apple will add 2,200 Intel employees to its teams, along with intellectual property, equipment and leases from Intel, said the Cupertino, California-based high tech giant.

Logo of Apple Inc. [File Photo: IC]

"Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they'll thrive in Apple's creative and dynamic environment," said Johny Srouji, Apple's senior vice president of Hardware Technologies.

The addition of the acquired Intel patents for current and future wireless technology will bring to over 17,000 the total number of Apple's wireless technology patents, which span cellular standards, modem architecture, modem operation, and chip engineering.

The new transaction, which is expected to close before the end of 2019, will help reduce Apple's dependence on Qualcomm for its smartphones' modem hardware.

Apple and Qualcomm struck a settlement in April 2019 for an undisclosed amount of money that resolved their disputes over patent licensing practices for the last two years.

The six-year global patent licensing deal between the two companies allowed Qualcomm to continue supplying parts to Apple for multiple years. The settlement prompted Intel to announce an exit from the 5G phone business.

Despite Apple's new deal with the U.S. top chipmaker on Thursday, Intel will continue to stay in the modem business as the Santa Clara-based firm will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles.

Intel will "focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created," said Intel CEO Bob Swan.