Apple Buys Intel's Smartphone Modem Business (theverge.com) 52
Apple is officially acquiring Intel's smartphone modem business for $1 billion, the two companies announced today. As rumored earlier this week, the move "would jump-start the iPhone maker's push to take control of developing the critical components powering its devices." The Verge reports: The acquisition means that Apple is now well on the way to producing its own 5G modems for its smartphones, rather than having to rely on Qualcomm for the hardware. Developing its own modems has the potential to deliver big benefits for Apple. In particular, it would no longer be subject to the patent licensing terms of Qualcomm, which were the source of the two companies' lengthy legal dispute. In the past, Apple has accused Qualcomm for charging "disproportionately high" fees in patent royalties, which it was accused of forcing companies to agree to if they want access to its hardware as part of a "no license -- no chips" policy.
The talks with Intel to acquire its modem business are understood to have started last summer, according to the WSJ, when Intel's new CEO Bob Swan arrived with a focus on cleaning up the company and addressing its loss-making segments. Acquiring another business to develop an in-house competitor is a tactic Apple has used at least once before when it spent $300 million to acquire part of Dialog, a company that previously supplied Apple with power management chips for its phones. The time of the acquisition, which included 300 employees, was Apple's biggest ever in terms of headcount.
The talks with Intel to acquire its modem business are understood to have started last summer, according to the WSJ, when Intel's new CEO Bob Swan arrived with a focus on cleaning up the company and addressing its loss-making segments. Acquiring another business to develop an in-house competitor is a tactic Apple has used at least once before when it spent $300 million to acquire part of Dialog, a company that previously supplied Apple with power management chips for its phones. The time of the acquisition, which included 300 employees, was Apple's biggest ever in terms of headcount.
Good (Score:4, Funny)
I switched my ringtone to a dial-up modem tone to celebrate.
Re: Good (Score:2)
Do not be so bossy.
And DO go fuck yourself.
Re: Good (Score:1)
Is that your anal dildo test script?
Must suck having a side hustle job like that.
Re: (Score:2)
https://finance.yahoo.com/quot... [yahoo.com]
Re: (Score:1)
If qualcomm's stock is going to have trouble it's not just because of this.
Qualcomm is in some recent legal trouble for some really dicey anti-trust practices going back many years. - Basically they've been using their modem business dominance to push their arm SoCs and forbidding phone makers to buy modems from other companies.. And quite brazenly flaunting the spirit and letter of FRAND agreements by making phone makers pay for qualcomm patents twice if they do by modems from other vendors.
(We've been com
Re: What happens to Qualcomm now? (Score:1)
What is the 'spirit of FRAND agreements' when you own the whole market? What benefit do you get from the other suppliers' IP if you command the field?
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No big deal for Qualcomm. Apple has a small slice of the smartphone market and it's getting smaller. Will be entertaining to watch this accelerate when the modem bugs bite.
Consequences (Score:5, Interesting)
Will this close off Intel modems as an OEM for other cell phone makers? If so, I could see this being a huge benefit to Qualcomm as cell phone makers will have fewer alternatives now.
Re:Consequences (Score:5, Informative)
Well, most people were using Qualcomm anyways - they are the best performing chips out there. If you're using Qualcomm SoCs, you're forced to use Qualcomm modems (and probably vice versa - if you want to use Qualcomm modems, they'd force you to use a Qualcomm SoC if they can. It's why Samsung phones use Qualcomm chips in North America, but their own Exynos chips outisde).
Plus, I don't think many people actually used Intel's modems - maybe European vendors (back when it was Infineon) but even those switched to Qualcomm I believe. The only other independent vendor is MediaTek.
And Intel claims they don't have a 5G solution, so people designing phones today wouldn't be using Intel or considering using Intel for their designs. Apple will have to honor their existing contracts for LTE parts, though, but I'm sure they're all not for new designs anyhow..
Chances are, since this was probably in the works for months, there were no customers to speak of.
Re: (Score:2, Interesting)
Qualcomm SoCs are substandard parts, and large phone makers prefer to make their own chips. It's just the way the market is going.
Qualcomm abuses their market position to push their other products.
It's funny you mention Samsung, because samsung only sells qualcomm parts in phones because qualcomm forces them to.
This and other things were the subject of an anitrust suit that qualcomm just lost (And will doubtlessly be appealed)
https://www.nytimes.com/2019/05/22/business/qualcomm-antitrust-ruling.html
Re: (Score:2)
Apple has such animus for Qualcomm at this point that I wouldn't be surprised if they licensed their 5G modems under incredibly generous terms, specifically to take the wind out of Qualcomm's sales.
Of course they will brand it as an "industry privacy initiative" or some such to avoid being accused of market dumping.
Qualcomm behaves as if it has a defacto monopoly (and the USPTO ain't helping).
Control over entire software stack (Score:5, Informative)
This also gives Apple control over the full software stack on the device for all the CPUs in it.
Previously, there could be binary blobs from the modem vendor -- and this could be a security risk. With apple controlling the entire baseband and application processor software stacks, there will be no CPUs on the device that are not running software entirely controlled by Apple.
This may give apple another edge in securing their device over their competition.
Re: (Score:2, Troll)
This may give apple another edge in securing their device over their competition.
It may, but we'll never know, because it won't be open source. To the user, it doesn't matter if the binary blob is made by intel or Apple; either way, if there's an NSL or similar involved, we're not allowed to know. This, of course, will be no different from any other vendor.
Wow (Score:2)
So who's paying for the anti-OSS moderation? Transparency now!
Re: (Score:2)
You know who. Thug Apple.
It’ll be interesting to watch (Score:2)
We know Intel’s modems are currently inferior to Qualcomm’s. However whatever other issues exist at Apple, the PA Semi acquisition worked out splendidly... they certainly have been able to put together quality processors. Maybe their engineering team thinks it can turn Intel’s modem group around.
Of course, for Apple a billion dollars is chump change. Since they’ve already settled with Qualcomm, there’s probably not a lot of risk associated with this acquisition. If it doesn
Re: (Score:3)
The way you get to Apple's valuation is by not treating a billion dollars as chump change. I've never understood this turn of phrase, because the corporate juggernauts of the world often run notoriously tight ships.
Basically, it's the attitude of the punter who wins the lottery, has a grand time for two years, then goes right back to burger flipping.
Re: (Score:2)
Consider that Apple's revenue is ~ $260 Billion per year..
So they pull in a billion dollars in about a day and a half.
Apple spending a billion dollars is roughly equivalent to a person earning $26,000 per year and spending $100.
Not chump change.. but it's not gonna break the bank either.
Re: (Score:2)
The way you get to Apple's valuation is by not treating a billion dollars as chump change.
The way you get to become irrelevant is by refusing to spend your money to create better products. Apple is currently caught in an iterative loop which can never produce another runaway success. They're going to have to start spending some of that money they've been sitting on, and on something other than real estate.
A day late... (Score:2)
Isn't this the kind of thing Apple should have done - or been developing themselves - 3 or 4 years ago, in order to be ready to roll for 5G in a timely manner? Their problems with Qualcomm have been going on long enough that they should have had a Plan B, well, planned.
Re: (Score:1)
Re: (Score:2)
Seems a bit late. 5G is rolling out around the place, even though it's not clear if it's really ready for primetime, and Apple will either have to use Qualcomm or be very late to market with 5G. Apple's game plan for many things is 'don't be the first release, be the last word' but the time from first release to last word might be a bit too long in this case. We'll see.
Re: (Score:2)
Isn't this the kind of thing Apple should have done - or been developing themselves - 3 or 4 years ago, in order to be ready to roll for 5G in a timely manner?
You can't buy what's not for sale. Intel had to be ready to admit failure before they would sell off their modem division, and that has historically been difficult for them.
If Intel has their shit together, they will spend this money buying some GPU technology. AMD is going to absolutely roll them if they don't get a vaguely credible GPU.
Hooray! Bring on the 6G! (Score:1)
Article's wrong (Score:2)
Apple and Qualcomm entered into a six-year license agreement including a two-year option to extend, and a multiyear chipset supply agreement April 1, 2019. Apple buying Intel's patent portfolio will help in negotiations post that agreement (or prior if there's a way to rip it up) but won't mean they automatically won't have to pay Qualcomm royalties. Patents last for 20 years, Qualcomm has a stack of them and they doesn't make phones. For years Qualcomm has charged phone makers a percentage of their BOM eve
Reversion (Score:2)
It was only recently that Intel moved the cellular modems to x86 communication processors and an Intel semiconductor process*. Since Intel bough the group form Infineon they were still using ARM and a TSMC fab. I wonder is Apple will revert to ARM and TSMC? It could be a big win for Intel Foundry if they can keep them on an Intel process.
*: I worked on at least one cancelled project to build a modem with x86 in an Intel fab.
Are screens the only hardware left not Apple? (Score:2)
I know Apple is getting closer and closer to a true in-house set of hardware for their phones.
They buy the glass, and they buy the screens from their biggest competitor, Samsung.
Do they have any shot of getting their screen business in-house?
Re: (Score:2)
Do they have any shot of getting their screen business in-house?
You ask a particularly interesting question, but I don't have the answer, only this: Making displays is complicated and expensive. Apple can buy their way out of expensive, but complicated takes time unless you buy some other company which is already doing something interesting, but hasn't made a commercial success of it yet.
MicroLED (Or, why not, uLED) seems to be potentially even cheaper and simpler to fabricate and is already longer-life than OLED, but LG and Samsung are the ones pushing it so I presume
It'' be Interesting (Score:1)