It won’t come as much of a surprise since the news leaked the other day, but it’s nevertheless a hugely important move on Apple’s part: the company confirmed on Thursday afternoon that it will acquire the majority of Intel’s smartphone modem business for $1 billion. The deal will push Apple ever closer to what appears to be its ultimate goal of taking ownership of every single important component included inside its iPhones. It’s not just about the iPhone and other products Apple currently sells, of course, because all these businesses will also design chips for future Apple products like AR glasses and perhaps even cars.
Apple confirmed in its announcement that about 2,200 Intel employees will transition to Apple as part of the deal, and the Cupertino-based company will also take ownership of all relevant intellectual property, equipment and leases. The deal is expected to close in the fourth quarter of the year, and you can check out the full press release below.
Apple to acquire the majority of Intel’s smartphone modem business
Cupertino and Santa Clara, California — Apple and Intel have signed an agreement for Apple to acquire the majority of Intel’s smartphone modem business. Approximately 2,200 Intel employees will join Apple, along with intellectual property, equipment and leases. The transaction, valued at $1 billion, is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions, including works council and other relevant consultations in certain jurisdictions.
Combining the acquired patents for current and future wireless technology with Apple’s existing portfolio, Apple will hold over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation. Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles.
“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,” said Intel CEO Bob Swan. “We have long respected Apple and we’re confident they provide the right environment for this talented team and these important assets moving forward. We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.”
“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,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies. “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. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward.”