Intel announces Closure of 5G Smartphone Modem Business

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Qualcomm and Apple announced Tuesday that they were settling their numerous multibillion-dollar legal fights and paving the way to bring Qualcomm chips back into the iPhone.

A few hours later, Intel announced that the company was exiting the 5G Smartphone Modem Business, instead of turning their focus onto 5G infrastructure.

In a statement, Intel CEO Bob Swan said,

“We are very excited about the opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns.”

“5G continues to be a strategic priority across Intel, and our team has developed a valuable portfolio of wireless products and intellectual property. We are assessing our options to realise the value we have created, including the opportunities in a wide variety of data-centric platforms and devices in a 5G world.”

While the two events were announced within  hours of each other, there is no way to know whether it was Intel exiting the 5G smartphone modem business that prompted Apple to settle with Qualcomm, or whether the settlement caused Intel to take this major step.

What is clear is that the modem business was putting unneeded stress on Intel, given that it wasn’t as profitable a revenue stream as the company’s other businesses.

Qualcomm and Apple have reached a six-year global patent license agreement and a multiyear chip set supply agreement. It also includes a one-time payment from Apple to Qualcomm of an undisclosed amount.

As part of the agreement, Apple will once again pay royalties to Qualcomm.

The ongoing litigation had potentially severe implications for both companies: the feud had made Apple reliant on Intel.

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