Apple officially announces its Intel smartphone modem business acquisition

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Apple officially announces its Intel smartphone modem business acquisition

Apple acquires the majority stake in Intel's 5G smartphone modem business in a deal that is reported to be worth $1 billion. (The record is still held by Beats, which Apple bought for US$3 billion in 2014.) As part of the deal, Apple says more than 2,000 Intel employees will join its ranks. The deal is expected to close in the fourth quarter and goes a long way toward helping Apple design and manufacture its own modem chips. These additional patents will take Apple's portfolio to a whopping 17,000 patents for wireless technology, cellular standards, modern architecture and modem operation.

"Second quarter results exceeded our expectations on both revenue and earnings, as the growth of data and compute-intensive applications are driving customer demand for higher performance products in both our PC-centric and data-centric businesses", said Bob Swan, Intel CEO. Taiwan Semiconductor Manufacturing Co. chip manufacturers edged up Apple's share from 0.1% to $207.29. Later that day, Intel announced that it would exit the modem business. Because there were reports earlier regarding Apple's 5G modem development being delayed.

As rumoured, it is a $1 billion purchase. Intel continues to make modems for PCs and other devices.

Thus, Apple has made a decision to acquire Intel's smartphone modem business so as to drastically reduce its dependence on Qualcomm. A legal spat with Qualcomm [QCOM], which Apple accused of exercising predatory pricing over patent royalties, only ended in April, after Apple agreed to pay out at least $4.5bn in compensation and granted Qualcomm multi-year patent licencing and supply agreements.

But the Intel acquisition should vastly accelerate Apple's plans to build its own modems, which is good news for iPhone owners.

The agreement announced Thursday comes three months after Apple ended a long-running dispute with one of Intel's rivals, Qualcomm.

The recent rumor that Apple is buying Intel's smartphone modem business has now been confirmed by Apple.

Apple doesn't want to depend on other companies' licenses. This will mean that the company will be able to develop the modems in house.

SAN FRANCISCO (AP) - Apple is paying Intel $1 billion for the chip maker's smartphone modem division in a deal driven by the upcoming transition to the next generation of wireless technology. Bringing clearly inferior 5G modem technology into Apple doesn't automatically make it great and usable - Apple cares about using what's best, and just paid multiple times the Intel acquisition amount to keep using Qualcomm's modems for the foreseeable future.

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