In a $1 Billion Deal, Apple and Intel Divide the 5G World

July 30, 2019 by Gary Elinoff

Apple has offered $1 billion to Intel for a majority share of its modem chip business.

Apple has offered $1 billion to Intel for a majority share of its modem chip business.

As detailed in almost identical press releases from the two tech giants, Apple has acquired the lion’s share of Intel’s smartphone modem business. The monumental deal, valued at $1 billion, sees Apple acquiring 2,200 of Intel’s top engineers and a motherload of Intel IP.


A Once and Future 5G Smartphone Modem

Intel's work on 5G hardware has been ongoing—and never quite a promise fulfilled. In November of 2018, they canceled their Intel XMM 8060 5G modem, mere days after they announced the acceleration of a new modem's release, the XMM 8160, by more than six months. This means that Intel had been intending to release the new modem in the second half of 2019. 

Fast forward to April 2019, when Intel announced that they were moving out of the smartphone modem space entirely and looking to expand their footprint in modems for PCs, IoT devices, and "other data-centric devices." With this chain of events, it's not too surprising to see another company step in to take up their modem business.

The hardware, itself—with an announced time of death of April 16th, 2019—focused on 5G NR NSA and SA protocols. 


Intel's latest 5G modem, the XMM 8160. Image from Intel


The promise of the XMM 8160, according to Intel, was that it would "support peak speeds up to 6 gigabits per second, making it three to six times faster than the latest LTE modems available today."

The multi-mode XMM 8160's features included:

  • A single-mode RF transceiver for mmW 
  • A seven-mode RF transceiver for sub-6 Ghz
  • A single-mode baseband for 5G

The single-mode version also includes additional components for LTE and 2G/3G modes.


Features of the Intel XMM 8160. Image from Intel


Now it seems that, while Intel will still have a hand in the modem business, Apple will be the ones moving forward with the groundwork laid by the XMM 8160. How much they change about the chip is yet to be seen—or not seen, as Apple is more likely to keep their proprietary chip information out of the public eye.

Apple Gets Smartphones, Intel Gets the IoT

If all goes to plan, this acquisition will leave Apple in possession of 17,000 wireless technology patents covering protocols for cellular standards, modem architecture, modem operation, and more. Intel, meanwhile, will be free to turn its full attention to developing modems for non-smartphone applications, such as PCs, internet-of-things devices, and autonomous vehicles.

According to Intel CEO Bob Swan, “This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created.” He goes on to state that “We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.”

Intel and Apple have, in effect, divided the 5G world in half, in a manner reminiscent of the Treaty of Tordesillas, which, 500 years ago, divided the literal world in half. Of course, the present agreement, which may attract the attention of US regulators, won’t require sanction by The Vatican.

Vertical Integration for Apple (for Better or Worse)

In a Q&A with Bill Shope at 2013's Goldman Sachs Technology and Internet Conference, Apple CEO Tim Cook laid out Apple's ethos for vertical integration: “The real magic happens at the intersection of software, hardware, and services, and we have the ability to innovate and create magic there. For many years, this idea of "vertical integration" was out of favor. People thought it was kind of crazy, but we never did and we continued to build.”

Compared to IBM, Intel, and Microsoft, Apple has never lost touch with developing its own hardware. The strategy started paying off so well with the iPhone, iPod, and iPad that even “Microsoft and Google have recently reversed and jumped into hardware.”

While vertical integration waxes and wanes elsewhere, it seems to be deeply buried in Apple’s very DNA.

Of course, that tactic didn't work out so well when it came to wireless charging, as demonstrated when the Apple AirPower program was unceremoniously canceled in April. As a power engineer, my opinion is that power engineering is an area of electronics that is often underestimated by non-specialists.

On the other hand, modems are part of the heart and soul of smart devices, not an obscure sub-specialty. 5G, then, appears to be Apple's for the taking.


Have you been part of a 5G project? Share your experiences in the comments below.


Featured image used courtesy of Intel.