Apple has confirmed the purchase of business Intel by 5G modems

Finally, the Cupertino giant will become independent in terms of equipping its smartphones with modems

mobile communications.The parties plan to complete all procedures for the transaction by the end of this year. The conditions for Apple turned out to be very sweet - the company receives more than 17 thousand various patents relating to wireless technologies, as well as equipment based on these technologies. The Cupertino team has already begun to create a specialized office on the Californian coast (San Diego), which is designed to accommodate about one and a half thousand employees. In fact, more people will move to Apple, and are already moving, but for the rest there will be places in other divisions and offices

Stay, stay

Intel's leading chip maker does not leaveFully business modems, the company will continue to produce them for computers, as well as for autopilot systems for cars and the Internet of things. According to Intel itself, this agreement will allow the company to better focus on the development of the fifth generation network technology itself, while retaining important intellectual property, part of the patents and technologies that were previously created by company employees. And in general, this business is too pulling the company down, experts estimate the annual loss of Intel in the modem business at $ 1 billion. So, the sale of this division is not just an inflow of additional amount, it is a powerful savings, cutting off the unprofitable sector.

Qualcomm needle

Apple bought for its smartphonesQualcomm has modems, but two years ago there was a conflict between the companies, and the Cupertino team replaced them with Intel. And the conflict arose because of Qualcomm’s pricing policy; being a monopolist, the chipmaker began to inflate prices for its products, taking advantage of the fact that there was no one to replace it at that time. For Intel, the Cupertino team became the only client, and bought modems for fourth-generation cellular networks at reasonable prices, in addition, they could now connect their users to Verizon, as well as AT&T.

In the spring of this year, the conflict betweenCupertino and Qualcomm has been exhausted, and for smartphones modems will again supply the old partner. Modems are 4G for now, but 5G will also buy Apple for their iPhones. The contract has been extended for the next six years. Meanwhile, Intel announced that it is rolling out its modem business for mobile devices.

Analysts say this deal will help Appleget rid of the risks of non-compliance with partners schedules or prices. It is always more profitable to have our own production of modems, rather than buying them from third-party companies, whose pricing policy is constantly in a state of fluctuations. Now the company will have to quickly set up everything, and if everything is normal, then iPhone’s own modems will appear in 2022. Apple is well able to calculate the risks, and they will not tolerate a repeat of the situation with Qualcomm. In the future, the company will come to a full production cycle of its devices at its own facilities.

Currently the biggest purchase for Appleis Beats Electronics, which was acquired five years ago for $ 3 billion. In fact, for Cupertino, who now have about 110 billion free capital, acquiring an important business for just 1 billion is a very good deal.