Just a few days after a rumor claimed that Apple was in talks to spend a cool $1 billion on Intel's smartphone modem business, the deal has become official.
Apple today confirmed that it's reached an agreement with Intel to acquire the majority of Intel's smartphone modem business. The deal is valued at $1 billion and is expected to close in the fourth quarter of 2019.
As part of the deal, Apple will get intellectual property, equipment, and leases, as well as around 2,200 Intel employees.
Apple touts that by combining its patent portfolio with the patents that it's acquiring, Apple will hold more than 17,000 wireless technology patents. These include protocols for cellular standards, modem architecture, and modem operation.
Here's what Johny Srouji, Apple's SVP of Hardware Technologies, had to say about the Intel deal:
“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. 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.”
Apple is famously a company that likes to have control over as much of its devices as possible, and this acquisition of Intel's smartphone modem business is another example of that. The modem is an important part of any smartphone, and acquiring Intel patents and employees will give Apple a major boost in creating its own modems for the iPhone.
This deal with Intel may sound strange after Apple recently struck a multi-year licensing deal with Qualcomm, another major modem supplier. Apple will likely need at least a couple years to continue developing its own modems, though, and so its licensing deal with Qualcomm will enable it to continue using those modems in its iPhones while it continues to work on its own modems.