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Apple officially buying Intel’s 5G modem business for $1 billion

Apple officially announced the $1 billion acquisition of Intel’s 5G modem business on Friday, after a report surfaced earlier in the week spilling the beans about the smartphone component business. The acquisition includes thousands of wireless tech patents, 2,200 employees, and more and is expected to close in the fourth quarter of 2019.

“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,” Johny Srouji, Apple’s senior vice president of Hardware Technologies, said in an Apple blog post. “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.”

With its existing portfolio of patents, Apple says that it will now hold 17,000 wireless tech patents — which range from cellular standards to modems. That makes it an even more important player in the development and licensing of wireless communication tech.

The news is certainly interesting, though not all that surprising. Apple has been working for years to reduce its reliance on third parties. A number of years ago, it began building its own processors for the iPhone and iPad. Many speculated that it would begin building its own modems too — and this news pretty much confirms that eventually, iPhones will ship with Apple modems. If Apple has as much success building modems as it has had building processors, Apple-built modems could end up being among the best in the business, at least when it comes to mobile modems.

Apple has had an interesting road to the 5G modem. Current iPhone models use Intel 4G modems, but a few months ago rumors began to spread that Intel was struggling to develop a 5G modem. Soon after that news, Apple announced it settled disputes with Qualcomm and inked a six-year licensing deal, while Intel simultaneously announced that it was ceasing development of mobile 5G modems.

Only time will tell how long it will take for Apple to build its own modems and ship them with the iPhone. Given Apple’s deal with Qualcomm, we expect that at least the first few 5G iPhone models will ship with Qualcomm modems. The first 5G iPhone is expected to be released in 2020.

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