The Strategist

Intel completes sale of its modem business to Apple

12/03/2019 - 07:13

Intel announced completion of sale of most of its smartphone modem business to Apple. This deal, worth $ 1 billion, was announced in July 2019, following a statement by Qualcomm and Apple to conclude a conciliation agreement.

JiahuiH via flickr
JiahuiH via flickr
As previously stated, under the agreement, 2,200 Intel employees were transferred to Apple; the latter also received intellectual property, equipment and 17,000 patents for wireless technology, from cellular standards to modems. The sale of part of the business will allow Intel to focus on the development of industrial technologies for 5G networks, as well as on release of modems for devices such as PCs, the Internet of things and autonomous vehicles.

This transaction will bring Intel no more than $ 500 million in cash, but, more importantly, will significantly reduce losses. In an interview with Yahoo! Finance, Intel CEO Robert Swan explained that with only one client in the smartphone segment, the company could not earn enough by selling modems to hold on to this business, and the dynamics of the oversaturated mobile market left no place for illusions about the future.

Intel sold its business for the production of modems for smartphones, incurring losses of several billion dollars, said the American chip maker in court in Friday, claiming that a competitor represented by Qualcomm ousted it from the market. Intel filed complaints with the U.S. Court of Appeals, where Qualcomm is trying to reverse the antitrust decision against it after the U.S. Federal Trade Commission (FTC) opened a lawsuit. Intel, whose executives testified last Friday, said the FTC decision should remain in place. Appeal proceedings are expected to begin in January.