14 DAY TRIAL // Apple is reportedly in advanced talks to take over Intel’s smartphone modem business for approximately $1 billion, with an official announcement in this regard expected as soon as the next week.
A report from the WSJ reveals that talks on a potential deal started many months ago when Apple was still involved in a legal war against San Diego-based chipmaker Qualcomm.
Apple eventually settled the dispute with Qualcomm and negotiations over buying Intel’s smartphone modem unit got suspended. Intel also announced it would exit the smartphone modem business, with Apple to use Qualcomm chips for its future-generation iPhones.
The cited source reveals that Intel reached out to Apple to resume talks shortly after the Cupertino-based tech giant settled its lawsuit with Qualcomm, and the negotiations have since progressed substantially.
Apple trying to reduce reliance on third parties
By the looks of things, Intel has considered discussing selling its smartphone modem unit to other companies as well, but eventually focused on talks with Apple as it sees the Cupertino-based tech giant as “the most logical buyer,” as per the linked report.
Apple hasn’t obviously commented on the negotiations with Intel, but taking over its smartphone chip business would indeed help the company reduce reliance on other companies and develop more parts in-house.
Apple has been trying to do this for a long time, and the legal war with Qualcomm was living proof the company needed to accelerate its efforts in this regard. By taking over Intel’s smartphone chip unit, which includes not only staff but also patents, Apple could save what the source calls years of development work, eventually getting closer to building its own iPhone modem faster than anticipated.
The company has already been very active in this side of the market, as it wants to open a dedicated office in San Diego who would employ 1,200 workers and focus mostly on chip development.