Apple to acquire Intel’s smartphone modem division for $1 billion

Apple buys the majority of Intel’s modem business. About 2,200 employees will be transferred to Apple and the iPhone maker will acquire patents and equipment. Intel continues to make modems for PCs and other devices.

Apple and Intel have reached an agreement and expect the deal to close by the end of the year, after several regulators look into it. Apple reports that the agreement will see approximately 2,200 Intel employees transfer to Apple, including some of its intellectual property, equipment and leases. The transaction is valued at $1 billion.

The deal does not mean Intel will exit the modem business entirely, as it will continue to develop 5G modems for things such as IoT devices, autonomous vehicles and PCs; the acquisition by Apple concerns modem chips for smartphones. For Apple, the transaction means that in the long term it will be much better able to make 5G modems for its smartphones itself, without being completely dependent on a party like Qualcomm.

Intel says the acquisition will allow the company to focus on developing technology for its 5G network while retaining key intellectual property and key modem technology. Apple speaks of a “significant acquisition of innovative intellectual property” that will help expand the development of future products and allow Apple to further differentiate itself in the future.

Intel announced in April that it would no longer continue developing 5G modems for smartphones. That move was a direct result of the settlement between Apple and Qualcomm. Apple also promised that in the coming years it will only purchase modems from Qualcomm. The iPhone maker was Intel’s only major customer for smartphone modem chips.