Published: Fri, June 14, 2019
IT | By Lester Massey

Apple in Talks to Buy Intel's German Modem Assets

The rumour comes courtesy of The Information, which says it got the scoop from no less than four unnamed people who we're told have been briefed on the discussions between Apple and Intel.

Bernstein cites reports of talks for Intel (NASDAQ:INTC) to sell its German smartphone business to Apple (NASDAQ:AAPL) and notes it would be a "reasonably cheap" move for Apple.

If Apple ultimately receives the green light from Intel, Apple will most likely acquire the employment contracts for hundreds of some of the industry's brightest engineering minds. The engineers that ended up in that division previously worked on chips that ended up in the iPhone about a decade ago.

The activities targeted by Apple date back to when Infineon developed the modem business in Germany. Intel had then stated that it received tremendous interest from buyers to acquire it's 5G modem business but refused to mention the name of any company.

We have hired outside advisors to help us assess strategic options for our wireless 5G phone business.

However, as with other technologies like mobile graphics and CPUs, it's clear that Apple will want to build its own tech, hence the potential acquisition. The iPhones started using Infineon/Intel's chips again in 2016 with the iPhone 7 and 7 Plus following the disputes with Qualcomm. The enthusiasts were hoping that the 2019 iPhone, coming this September will have 5G support but unfortunately, that is not going to happen. To Apple's distress, Intel's plan regarding their 5G modems went to drain, and Apple had to look for another chipmaker for their 5G modem. Intel and Apple shares are down 0.5%. The staff from Infineon was absorbed in Intel's German arm. As such, Apple already has a level of familiarity with Intel's modem operations. "It took Huawei and Samsung eight to 10 years to create competitive smartphone modems, but I believe if Apple acquired Intel's smartphone modem assets, it could shave a few years off that time".

The iPhone maker is seeking to develop its own modem in order to reduce its reliance on external suppliers such as Qualcomm.

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