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Why is Apple buying Intel mobile modem business: Let the experts explain – The Indian Express


Apple confirmed that it was acquiring Intel’s mobile modem business for billion. The deal gives Apple access to patents and intellectual property from Intel, along with around 2,200 employees.

Apple’s acquisition of Intel’s mobile modem business is a step towards its goals to make its “own integrated baseband processor” and be less dependent on third-party suppliers, experts suggested.

“This deal will accelerate Apple’s long-existing plans to shift from its own SoC (system-on-a-chip) that includes its discrete application processor and a third party’s discrete cellular baseband processor to an integrated baseband processor in its SoC,” Phil Solis, Research Director, for Connectivity and Smartphone Semiconductors at IDC (International Data Corporation) said in an email correspondence with indianexpress.com.

On Thursday, Apple confirmed that it was acquiring Intel’s mobile modem business for $1 billion. The deal gives Apple access to patents and intellectual property from Intel, along with around 2,200 employees.

The acquisition comes at a time when Apple is behind the competition on 5G-ready phones. Apple’s 2019 iPhones, expected to be revealed early September, might not have a 5G version. In contrast, Samsung announced a 5G version of its flagship device last year.

According to Solis, one of Apple’s long-term goals has been to make its “own integrated baseband processor”. A baseband processor is a part of the device or the chip which manages all radio functions, all functions that require an antenna. Apple, Solis explained, “tried unsuccessfully to license cellular baseband IP from Qualcomm to make its own integrated baseband processor”. Apple has been “hiring more engineers to develop its own baseband processor for integration”, he added.

Earlier reports from Bloomberg have shown that Apple has been testing its own modem technology for the past couple of years. It has also set up “development centers” in San Diego and other parts for its 5G goals.

Solis believes the acquisition was a natural fit for Apple considering the two worked closely for baseband processor, and the iPhone-maker was also influential in Intel’s design and roadmap.

Annette Zimmermann, Research VP at Gartner, Germany, says the Intel acquisition is part of Apple’s strategy to develop more of it its own technology. “This is also to provide better integration of different components which help especially around leveraging AI,” she wrote in a reply to indianexpress.com’s queries. She said the benefits of the acquisition need to be seen as a long-term investment rather than a move to quicken the pace for Apple’s 5G ambitions.

Analysts expect that Apple’s own 5G modems could take some time. This April, Apple and Qualcomm settled their legal battle and now have a six-year global patent licensing agreement, which could be extended for another two years.

The deal, according to Solis, should give an inkling on when one can expect Apple’s own integrated baseband processor. “The two companies are in a “multi-year” deal – likely two years – for Qualcomm to supply Apple with discrete baseband processors. Apple is in a patent licensing deal with Qualcomm for six years. This difference shows when Apple expected to be able to make its own integrated baseband processor,” he explained.

“Details of that deal showed that Qualcomm would be selling modems – discrete baseband processors and transceivers – to Apple for a shorter timeframe while licensing its patents to Apple for a longer timeframe,” he added.

But the Intel deal could also give Apple a better bargaining chip against Qualcomm. “This is a blow to Qualcomm, but the impact of it is more long-term than short-term. Apple’s acquisition of Intel’s model business does give it better negotiating power at the table, and in the long-term, Qualcomm will find it harder to dictate terms while selling chips to Apple,” explained Rushabh Doshi, Research Manager at Canalys’ global mobility market research.

“It remains to be seen what Apple will do longer term for mmWave 5G RF modules. Fall 2020 iPhones will use Qualcomm’s mmWave RF modules, but in the meantime, there will be other vendors making these and Apple will be working on its own modules,” wrote Solis. According to Doshi, going forward, it will be critical for Apple to have its own 5G and future wireless intellectual property.



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