Apple closes a deal to buy Intel’s smartphone modem chip division for $1 billion or more. According to The Wall Street Journal, signing of a six-year licensing agreement could be finalized in the next week. The deal would allow Apple to take control over the production of critical components which power its devices. The deal includes modem-related patents and hundreds of engineers.
Apple is currently receiving LTE modem chips from Intel, for its latest and upcoming iPhones. But with the settlement between Apple and Qualcomm, it would restart buying the Qualcomm’s modem technology. As soon the settlement got finalized, Intel announced its exit from developing the next generation 5G modem chip. Previously, Apple has worked closely with the modem team of Intel during the period when it faced few issues with Qualcomm.
As per the report, Qualcomm continues to develop its own 5G chip, and Apple is offering job opportunities to build its own 5G modem. But still it is not clear whether the Qualcomm technology will make into an iPhone.
As the deal gets over, it would emphasise the Apple’s increased desire to consider large multibillion dollar purchase with its reserved fund of $225 billion in cash and its marketable security. The biggest deal Apple ever made was of worth $2.6 billion with Beats Electronics and Beats Music in 2014. The previous year Apple inked a deal with Dialog Semiconductor in which it bought the related patents and staff for $600 million.
Intel showcase a rise of over 1% in its shares, where Qualcomm dropped over 2% and Apple remains neutral in extended trading.