As soon as Apple patched things up with Qualcomm, Intel let the world know that they were getting out of the modem business. That is probably for the best since it looks like they were years away from catching up to the top players in the industry. Apple was the only thing keeping them in the game and they have now wisely moved on.
According to the Wall Street Journal, Intel was negotiating with Apple to sell their modem business before the latter settled with Qualcomm. The negotiations reportedly started last Summer which makes sense, as Apple’s legal battles with Qualcomm really started heating up around that time. This also dovetails nicely with rumors that Apple was ramping up their efforts to design their own 5G modem. Buying up Intel’s patent holdings and infrastructure would have been a great way for them to move forward even faster.
However, Apple’s deal with Qualcomm changes the equation. According to reports since then, Apple didn’t just settle with Qualcomm and rebuild their business relationship. They also licensed Qualcomm’s technology. It doesn’t take a leap of logic to see that Apple will be using that tech as the foundation for their future customized 5G chips. Not only did they buy time by regaining Qualcomm’s 5G chips for the next two iPhones, but they got the best path forward for their own chips after that. This means it is no longer as necessary for Apple to buy Intel’s modem business
Does this automatically rule Apple out as a potential buyer? Not necessarily. Since the two companies had a very close relationship over the last two years, Apple knows exactly what Intel has to offer. If there is something that they feel would move them forward in their own 5G efforts, they could still get involved. However, I don’t think they will make a move unless the price is right.
The WSJ article points out that Intel isn’t waiting around at the altar. They will be pursuing other offers for their modem business with Goldman Sachs handling the negotiations. The report says there are other interested parties since Apple pushed back from the table, but no specifics were given. They also estimated a deal to be worth “a few billion dollars.”
Apple isn’t known for dropping billions at a time on acquisitions, with Beats being the only one bigger than that in recent memory. However, if Intel doesn’t find a suitor and the asking price starts to go down. don’t be surprised if Apple gets back into the mix here. I’m not making any predictions, but I am saying that it’s still a possibility.