Finally, the Cupertinov giant will become independent in terms of equipping its smartphones with modems
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.
Apple has bought for their smartphonesQualcomm has modems, but two years ago there was a conflict between the companies, and the Cupertino team changed them to Intel. And the conflict occurred due to the pricing policy of Qualcomm, being a monopolist, the chip maker began to inflate prices for his products, taking advantage of the fact that there was no one to replace him then. For Intel, the Cupertins were the only customer, and they 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.