On Thursday, Apple Inc said that it would buy the majority of Intel Corp's smartphone modem business for $1 billion. The acquisition comes months after the chip-maker announced its plans to exit the 5G modem chip business.
As per the deal, around 2,200 of Intel employees will join Apple and the iPhone maker will acquire Intel's IP, over 17,000 wireless technology patents and equipment as well. The transaction is expected to be completed by the end of this year.
Intel will continue to develop modems for PCs, Internet of Things (IoT) devices, autonomous vehicles and other products but will be moving out of production for smartphones entirely to focus on developing other 5G technologies, the company said.
In the past year, Intel had become the sole source of iPhone modem chips after Apple got into a prolonged legal fight with its previous supplier Qualcomm Inc. In April, however, Apple made a surprise settlement with Qualcomm by re-initiating use of its modem chips, leading to Intel's decision to quit the business.
Experts suggest that the acquisition of Intel's production will mean that Apple will be able to produce its own 5G modems for its smartphones in a few years, reducing reliance on Qualcomm.