Three reasons why Apple would want to buy Intel’s mobile modem chip business

MacBook Pro 2019
MacBook Pro. Image: IDGNS

Cupertino plans to do more than pick up scraps following deal



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24 July 2019 | 0

The race to 5G might have just added a new lane. According to a report in the Wall Street Journal, Apple and Intel are engaged in serious talks over the latter company’s smartphone modem chip business, which folded earlier this year.

Intellectual property exchanging hands between industry giants isn’t new, but this deal has significant ramifications. Just three months ago, Apple and Intel were partners on the development of the iPhone’s 5G modem, but that ended when Apple and Qualcomm settled their longtime court case and Intel “announced its intention to exit the 5G smartphone modem business and complete an assessment of the opportunities for 4G and 5G modems in PCs, Internet of Things devices and other data-centric devices”.

That assessment apparently led to a sale, which in turn led to Apple’s interest, according to the Journal’s report. While it’s not entirely clear why Intel decided to exit the mobile modem business, conventional wisdom suggests that its chip development hadn’t advanced far or fast enough.

On the surface, it would seem like there’s nothing to buy but Apple wouldn’t be bpicking up scraps. Rather, it would be investing in years of work (and patents) by one of the largest semiconductor manufacturers as it looks to develop an in-house 5G chip for the iPhone that can rival Qualcomm’s. It’s not going to happen soon, since Apple and Qualcomm inked a six-year licensing agreement in April, but Cupertino is playing a long game here.

But while the iPhone is clearly the main impetus behind this deal, Apple’s motivations coulid stretch beyond handsets. 5G looks to impact every sector of Apple’s product lines, and acquiring Intel’s smartphone modem chip business – even unfinished – could have far-reaching implications within both Apple and the industry.

Apple Watch

Perhaps even more important than the engineering work would be the people behind the work. The Journal’s report specifies that in addition to Intel’s portfolio of patents, Apple would also be acquiring an infusion of talent from the team responsible for the development of the chip. That alone could be worth billions. It’s no secret that tech companies’ most prized assets are the engineers who work for them, and bringing a ready-made team of chip designers into Apple Park for work on the A14 chip and beyond would save Apple years of reorganisation.

But it’s not the iPhone that could stand to benefit the most from an integrated 5G modem. A more efficient S chip, which powers the Apple Watch, is key to the future generations of Apple’s wearable, especially as power-hungry 5G arrives. With an integrated 5G modem, chips will be smaller and more power efficient, two areas of intense focus for Apple. As it stands, the modem and main processor are separate entities and will continue in the vein as long as it continues to buy its modems from Qualcomm. Integration is one of Intel’s strongest suits, and it will be even more important when 5G starts taking off.

Patent trolls

As 5G phones and devices proliferate over the next few years, will be an uptick in lawsuits. Apple, Samsung, Intel, and any other tech giants are all susceptible to so-called patent trolls, companies that scoop up patents with the sole intention of using them to sue other companies that may infringe on them. It’s impossible to say what patents are included in this deal, but you can bet that they would be used for frivolous lawsuits in the wrong hands. It’s probably not the primary motivation for Apple’s purchase, but it wouldn’t be the first time someone snatched up a bunch of patents to keep them out of the wrong hands.

The next MacBook

While Apple has yet to release a notebook with LTE connectivity, that’s probably going to change with the advent of 5G. It’s not just the speed – as iPad OS gains more Mac features, a new device is likely on the horizon that sits between the iPad Pro and MacBook Air. We don’t know what this device would look like, but I’m willing to bet on two things: it will be powered by an Apple chip and it feature 5G connectivity.

We’re likely years away from such a device, and the reported Intel deal and the retirement of the MacBook are coinciding. Sometime within the next three- to five- years, it’s likely we’re going to see a brand new device that solves two longstanding problems: the iPad’s inability to replace the Mac, and the Mac’s lack of a touch screen.

With a 5G modem, the next MacBook will be the ultimate road machine, combining the power of a Mac with the portability of the Mac in a thin and light package, and Intel’s modem business could be the thing to get the ball rolling.

IDG News Service

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