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© mikael damkier dreamstime.com General | May 02, 2019

Is Apple eyeing Intel’s modem chip business?

As reported widely late last week, Intel Corp is exploring strategic options for its modem chip business, including a possible sale to Apple or another purchaser, according to Reuters.

Intel’s decision to leave the 5G modem chip business happened in mid-April, shortly after Apple settled an ongoing courtroom battle with Qualcomm Inc., and after months of talks with Apple that began last summer. Those talks ceased about the time of Apple’s settlement with Qualcomm. According to Reuters, several parties have expressed interest in acquiring the modem chip business, and Intel has hired Goldman Sachs Group Inc. to manage the process, still in its early stages. However, Apple, Intel and Goldman Sachs declined a request to comment from Reuters. There is some industry speculation that Apple may be gearing up to build its own 5G modems, based on certain recent behaviors; the company already produces its own processors. According to industry analyst Anshel Sag, of Moor Insights & Strategy, in a recent interview by NPR’s Molly Wood, Apple seems to have been moving in this direction for at least “the last three years.” In the interview, published at Marketplace Tech, Sag went on to say, “the actual gears have been in motion for at least the last 12 months. Late last year, they announced they were going to be hiring 1,000 people in San Diego, making their own office down here.” When Wood asked about the potential advantage for Apple, Sag said, “First of all, you can save money, which Apple loves to do. But also, in terms of user experience and product improvement, having a modem integrated into the [system on a chip] like what Qualcomm is doing with their Snapdragon chips, reduces power. It allows you to tighten the integration even more because now you can custom build every component for what you want to do to optimize for power, performance and battery life. As a result, if and when — I don't think it's if, I think it's more when — Apple builds their own modems, you're going to see better battery life, better performance.” The biggest challenge for Apple in creating its own modems? According to Sag, it’s “working around patents.”
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June 17 2019 9:26 pm V13.3.21-1